The number of connected vehicles globally is set to grow from 192 million this year to more than 367 million in 2027, with 5G connectivity set to play a key role in the development of the market, according to a new report from Juniper Research. The company’s new Connected Vehicles research report provides an independent analysis of the future evolution of this fast-paced market and advanced connectivity solutions within the automotive industry. It provides a comprehensive study of the increase in constant connectivity technology features in cars being adopted by automotive original equipment manufacturers, how the rise of 5G is impacting the connected cars market expansion, and the key role mobile network operators have in driving the market forward in order to offer advanced connectivity and an enhanced driving experience.
The analyst firm believes the growth will be driven by improvements in both advanced driver assistance systems (ADAS), the attraction of enhanced in-vehicle infotainment systems, and the transformative potential of 5G’s high-speed and low-latency capabilities. However, maximizing 5G’s potential impact will require “effective collaborations between automotive OEMs and [mobile network] operators,” according to the authors of the report, who believe the 5G connectivity opportunity presented to telcos by the connected vehicle sector will be worth US$3.6bn in 2027.
According to the co-author of the research, Nick Maynard, “5G can allow automotive OEMs [original equipment manufacturers] to upgrade the in-vehicle experience. In a vehicle market transitioning to electric vehicles, improving the user experience is key. Operators hold the critical role in enabling this in a reliable way, making them the partners of choice as their 5G networks rapidly expand.” Connected vehicles utilising 5G will be able to exchange information “between the various elements of the transport system and third-party services.”
|Key Market Statistics|
|Market size in 2023:||192 million vehicles in service|
|Market size in 2027:||367 million vehicles in service|
|2023 – 2027 Market Growth:||91%|
The report is upbeat overall, but notes that commercial use cases are proving more difficult to find and justify than those for ordinary automobile drivers. According to the Juniper Research team, by 2027 commercial vehicles will account for no more than 20% of connected vehicles worldwide, only a slight increase from the 16% that commercial vehicles will account for this year.
The research shows that such slow uptake is because commercial vehicle design is not yet fully exploiting the potential of connectivity beyond simple emergency call features and basic connected infotainment systems. The report recommends that automotive OEMs prioritize integrations with common fleet tracking systems out of the factory to maximise the benefits of connectivity, and to enable commercial fleet owners to maximize efficiency in their processes.
All types of connected vehicle technologies are still ‘works in progress,’ according to Juniper Research.
Various types of connected vehicle technologies are being pursued and improved. Vehicle-to-infrastructure (V2I) connectivity is used mainly to ensure vehicle safety as the vehicle communicates with road infrastructure and shares and receives information, such as traffic flows, road and weather conditions, speed limits, accident reports, and so on. Meanwhile, vehicle-to-vehicle (V2V) connectivity primarily permits the real-time exchange of information between vehicles.
Vehicle-to-cloud (V2C) connectivity is enabled via 4G/LTE networks and is mainly used for downloading over-the-air (OTA) vehicle updates, remote vehicle diagnostics or to connect with internet of things (IoT) devices. Vehicle-to-pedestrian (V2P) connectivity is a newer safety technology that uses sensors to detect pedestrians and other ‘obstacles’ and provides collision warning and avoidance guidance. Lastly, vehicle-to-everything (V2X) connectivity is exactly what it says it is – the combination of all the above connectivity systems and methods.
Of course, connected vehicle technology is not solely concerned with conventional automobiles. Self-driving vehicles will also exploit connection technologies to communicate with the road infrastructure and cloud platforms, but as incidents of crashes, injuries and deaths proliferate, self-driving vehicles are getting some bad press and would-be user enthusiasm is waning. Again, much stock is again being placed on the ability of 5G to help make self-driving vehicles not only safer but much more intelligent and responsive – it is very much a work in progress.
Global telco revenues from 5G Fixed Wireless Access (FWA) will rise from $515 million in 2022 to $2.5 billion next year, according to a new report from Juniper Research. FWA includes services that provide high-speed Internet connectivity through cellular‑enabled CPE (Customer Premises Equipment) for uses including broadband and IoT networks.
The research predicts that operators’ 5G FWA revenue will reach $24 billion globally by 2027. It identified the consumer market as the sector generating the highest revenue for network operators, representing 96% of global 5G FWA revenue. However, it warns that operators must provide a compelling user proposition for FWA solutions through the bundling of services such as video streaming, gaming and smart home security to enrich user experience and gain competitive advantage against incumbent high‑speed connectivity technologies, such as FTTP (Fibre‑to‑the‑Premises).
|Key Market Statistics|
|Market size in 2022:||$515m|
|Market size in 2023:||$2.5bn|
|2022 – 2027 Market Growth:||480%|
Juniper Research author Elisha Sudlow-Poole remarked: “The benefits of FWA are now comparable with services using fibre-based networks. Operators have an immediate opportunity to generate revenue from broadband subscriptions directly to end users by providing last-mile solutions underpinned by their existing 5G infrastructure.”
Juniper Research notes that the increase in 5G subscribers will be driven mainly by “the accelerating migration of cellular subscriptions to 5G networks, owing to operator strategies that minimize or remove any premium over existing 4G subscription offerings,” and that 600 million additional 5G subscriptions are expected be created next year, “despite the anticipated economic downturn in 2023.”
The report predicts that the growth of 5G networks will continue, and over 80% of global operator‑billed revenue will be attributable to 5G connections by 2027. The telecommunications industry demonstrated its robustness against the impact of the COVID-19 pandemic, and the report forecasts that the growth of 5G will also be resilient against this economic downturn due to the vital importance of mobile Internet connectivity today.
Juniper Research co-author Olivia Williams noted: “Despite the growth of the Internet of Things, revenue from consumer connections will continue to be the cornerstone of 5G operator revenue increase. Over 95% of global 5G connections in 2027 will be connected personal devices such as smartphones, tablets and mobile broadband routers.”
Private 5G Networks Represent a Key Opportunity for Operators:
In addition, the report predicts that the ability of standalone 5G networks to offer ‘network slicing’ will act as the ideal platform for the growth of 5G private network revenue. 5G Standalone (SA) uses 5G core networks supporting network slicing technology, which can be used to take a ‘slice’ of public 5G infrastructure and provide it to private network users. In turn, this helps mitigate the cost of private 5G network hardware and increase its overall value proposition, all against a background of deteriorating macro-economic conditions.
The report recommends that operators use 5G FWA to facilitate the last mile-solution by treating the relationship between FWA and fibre networks as wholly collaborative to maximize network performance and return on investment.
A new study from Juniper Research has found that the global value of the cellular IoT market will reach $61 billion by 2026; rising from $31 billion in 2022. It identified the growth of 5G and cellular LPWA (Low-power Wide Area) technologies as key to this 95% increase over the next four years.
The new study, Cellular IoT: Strategies, Opportunities & Market Forecasts 2022-2026, predicts that, LPWA solutions, such as NB-IoT and LTE-M, will be the fastest-growing cellular IoT technologies over the next four years. It anticipated that the low cost of both connectivity and hardware will drive adoption for remote monitoring in key verticals, such as agriculture, smart cities and manufacturing. In turn, LPWA connections are expected to grow 1,200% over the next four years.
The report urged operators to migrate IoT connections on legacy networks to networks that support LPWA technologies. It anticipated that demand from enterprises for low-cost monitoring technologies, enabled by LPWA networks, will increase as these legacy networks are shut off over the next four years.
Research co-author Charles Bowman commented: “Operators must educate users on the suitability of LPWA as a replacement technology for legacy networks. However, many IoT networks cannot solely rely on LPWA technologies. More comprehensive technologies, such as 5G, must underpin IoT network architectures and work in tandem with LPWA technologies to maximize the value of IoT services.”
5G to Generate $9 Billion for the IoT Market by 2026 (???):
The report predicted that 5G IoT services [1.] will generate $9 billion of revenue by 2026; rising from $800 million in 2021. This represents a growth of 1,000% over the next five years as 5G coverage expands and operators benefit from the increased number of 5G IoT connections. To capitalise on this growth, it recommended operators offer value-added services, such as network slicing and edge computing, to IoT users to maximise the value of 5G adoption.
Note 1. We believe that premium 5G-based IoT services must use the ultra-reliable low-latency communication (URLLC) 5G use case for which the 3GPP spec URLLC in the RAN has yet to be completed. Mission critical apps need ultra high reliability while real time control of IoT devices require ultra low latency. That won’t happen till the spec is complete, performance tested and implemented widely. URLLC will also required a 5G SA core network to prioritize URLLC traffic ahead of eMBB data flows.
Premium 5G URLLC services are expected to command a higher price and therefore generate proportionally more revenue per connection. However, they will likely still be in the early stages of deployment and uptake in 2026.
In contrast to Juniper’s bullish cellular IoT forecast, others have forecast non cellular LPWAs to be the big IoT connectivity winners.
- Ericsson predicted in a November 2020 Mobility Report that by 2026, cellular will account for 5.9 billion of the expected 26.9 billion IoT connections.
- Transforma Insights’ most recent forecast is for 19.9 billion IoT connections by 2026, with 3.2 billion of those being cellular connections. That implies the majority of LPWAs will not be cellular based, e.g. LoRA WAN, Sigfox, others.
We agree with Nick Wood’s of telecom.com who concluded, “Juniper’s forecast implies that 5G is not about to make a meaningful contribution to operators’ IoT revenues any time soon.”
A new study from Juniper Research has found that total network operator spending on AI solutions will exceed $15 billion by 2024; rising from $3 billion in 2020. The research identifies network optimisation and fraud mitigation solutions as the most highly sought-after AI based services over the next 4 years. AI-based solutions automate network functionalities including routing, traffic management and predictive maintenance solutions.
For more insights, download our free whitepaper, How AI Analytics will Boost Operators’ Revenue.
Network Optimisation & Fraud Prevention Driving Adoption in Developed Markets
The new research, AI Strategies for Network Operators: Key Use Cases & Monetisation Models 2020-2024, found that operators in developed regions, such as North America and Europe, would account for over 40% of AI spend by 2024, despite only accounting for less than 20% of global subscribers. It predicts that growing demand for operational efficiencies will drive operators in these regions to increase their overall investment into AI over the next 4 years.
The research urges operators to embrace a holistic approach to AI implementation across service operations, rather than applying separate AI strategies to individual use cases. It suggests network operators leverage AI to unify internal data resources and encourage cross-functional insight sharing into network efficiencies to maximise the benefits of collaboration across internal teams.
The research predicts that AI spend by Emerging Markets operators will exceed $5 billion by 2024, rising from only $900 million in 2020. It found that this growth will be driven largely by operators exploring early use cases of AI before expanding the presence of AI in their networks to include more comprehensive services.
The report forecasts that Indian Subcontinent and Africa & Middle East will experience the highest growth in spend on AI services, with operator spend in both regions forecast to grow over 550% over the next 4 years. It anticipates that operators in these regions will initially invest in AI-based CRM (Customer Relationship Management) solutions that yield immediate benefits.
A new study from Juniper Research has found that mobile operator voice revenue will drop to $208 billion by 2024 from $381 billion in 2019, as users continue to prefer more flexible and free OTT (Over-the-Top) services.
The new research, Mobile Voice: Emerging Opportunities for Operators & Vendors 2019-2024, forecasts that third-party OTT voice services will continue to grow; nearing 4.5 billion users by 2024. The study found that while this trend will contribute to declining voice revenue for operators, 5G proliferation will propel a number of nascent mobile voice and video services; generating fresh revenue streams for service providers.
Operator Voice Revenue Falls, as OTT managed VoIP Users Continue to Grow
The research forecasts that operator voice revenue will decline by 45% by 2024, in the face of an increase of 88% in the total number of third-party OTT mVoIP users over the next five years. The study urges operators to invest in AI-enabled communications platforms that facilitate competitive voice service delivery.
However, the research anticipates that improved 4G coverage and a growing number of capable devices will boost the number of mobile video call users; partially offsetting voice revenue losses. The study forecasts that ViLTE (Video over LTE) operator revenue will exceed $33 billion by 2024.
RTI (Real-Time-Interaction) and Vo5G (Voice Over 5G)
The report anticipates that 5G proliferation will generate new revenue streams for operators by enabling innovative use cases for VoLTE and ViLTE. The study notes that high data throughput and low latency will propel emerging services such as RTI, remote control and Vo5G, which will find wide application across a range of industries.
Additionally, the research prompts operators to accelerate VoLTE launches, in order to benefit from emerging Vo5G services. The study notes that establishing a 5G-enabled IMS (IP Multimedia Subsystem) infrastructure for VoLTE will provide a pivotal foundation for future voice services rollouts, which operators can monetise in upcoming years.
For more insights on mobile voice, download the free whitepaper: How Will 5G Evolve Mobile Voice in an AI-driven World.
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Mobile carriers in Japan and South Korea are way ahead of wireless telcos in US and China in near future “5G deployments, according a new study from Juniper Research. In its new report, 5G Market Strategies: Consumer & Enterprise Opportunities & Forecasts 2018-2025, the research firm ranked NTT Docomo, SK Telecom, LG U+, KTand SoftBank as the world’s top five “most promising 5G network operators.”
Comment: What’s so interesting about Juniper’s ranking is that there is no standard for 5G radio access network/radio interface technologies and there won’t be till the end of 2020 when IMT 2020 will be completed.
Japan’s NTT Docomo topped the list as No. 1, overtaking the top spot from SKT, which was the leader in the same study last year. SKT slipped into second place in 2018.
The research firm said it assessed over 50 global operators for the study and evaluated them based on results of 5G testing and trials, the extent and range of partnerships in the ecosystem and the level of technology innovation.
Japan, South Korea will account for 43% of 5G connections in 2019:
Japan and South Korea have established themselves as clear leaders in the development of 5G, says Juniper Research. In a white paper, Operators Need to Secure 5G ROI ~ Here’s How, accompanying the study, the research firm predicts that 43% of global 5G connections in 2019 will be in Japan and South Korea.
Juniper Research also forecasts that first commercial 5G network launches are expected in 2019 and that the first networks with 5G services will be in the Far East, China and North America. These regions are expected to account for all of the predicted 1.05 million 5G active connections by the end of 2019.
However, the research cautioned that operators faced significant challenges both to deploy and most effectively configure 5G networks. It claimed that the need to deploy dense small cell networks, operators would need far greater access to sites to upgrade and share equipment. Furthermore, it urged operators to invest in virtualized networks to enable both more efficient traffic management and improve security in the network perimeter.
“Over the past 2 years, operators and network vendors have been actively trialing their 5G solutions, including antennas, core networks and beam forming. Since 3GPP standards have been finalized for 5G NRs (3GPP spec New Radios) many of these trials have focused on interoperability between devices and 5G networks,” the research firm said.
“As a result, leading operators are now aiming for a launch date in 2019. Indeed, many operators have begun rolling out antennas and backhaul infrastructure to provide a 5G service. Initial 5G coverage will be in urban areas.”
220M 5G broadband connections forecast by 2025:
The research firm also forecasts that 5G based fixed wireless broadband (there is no such thing as it’s not even a use case for IMT2020!) will be among the first services to launch over 5G (e.g. Verizon’s proprietary spec). Its suitability as a last mile solution will drive adoption to over 220 million connections by 2025. However, the challenge for operators will be to demonstrate tangible benefits, to enterprises and consumers, over existing fiber-based solutions, warns Juniper Research author Sam Baker.
“Operators must carefully consider pricing strategies for 5G broadband,” Baker said. “Pricing must address both the anticipated large traffic generated, whilst remaining price competitive against incumbent broadband suppliers.”
He also cautions that operators faced significant challenges both to deploy and most effectively configure 5G networks.
“With the need to deploy dense small cell networks, operators would need far greater access to sites to upgrade and share equipment. Furthermore, we would urge operators to invest in virtualized networks to enable both more efficient traffic management and improve security in the network perimeter.”
Current Market Status:
5G, the next iteration of wireless cellular technologies, is currently reaching its final stages of development and commercialization by MNOs and industry stakeholders. Previous iterations of technologies (3G and 4G) were developed with a consumer-oriented focus. However, 5G will have further-reaching impacts, enabling a large number of use cases in IoT (Internet of Things) sectors such as healthcare, automotive industries, smart cities and mobile broadband. 5G networks will deliver high-bandwidth and low latency that support services such as UHD (Ultra High Definition) video streaming.
Juniper Research anticipates that the first commercial network launches will occur in 2019; the first networks to provide 5G services will be located in Far East & China and North America. Meanwhile, network operators in Europe have mostly adopted a ‘wait-and-see’ approach, closely following the progress of operators in these 2 regions.
Over the past 2 years, operators and network vendors have been actively trialing their 5G solutions, including antennas, core networks and beam forming. Since 3GPP Release 15 specs have been finalized for 5G NRs (New Radios) many of these trials have focused on interoperability between devices and 5G networks.
As a result, leading operators are now aiming for a launch date in 2019. Indeed, many operators have begun rolling out antennas and backhaul infrastructure to provide a 5G service. Initial 5G coverage will be in urban areas.
Operator Monetization Strategies for 5G:
As noted in our previous edition, ARPU (Average Revenue per User) has been considered the benchmark metric for measuring operator success in terms of billed revenue. The new services discussed in the previous sections are expected to be heavily dependent on a favorable operator service model.
There is both a need and a desire to solve the ARPU problem that network operators are facing; carriers are considering different service scenarios that they could deploy to garner payback from their network licence investments. However, the challenge here is that as 5G expected to drive a number of connected devices, systems and sensor networks, is ARPU going to be the right factor for measuring 5G? For example, consider M2M verticals: