Study: modern technology fails to deliver high returns for telecoms companies



Omdia has published a study claiming that telcos' subscribers are not willing to pay more for 5G tariffs. Thus 5G technology has failed to justify investors and telecom operators' revenues could fall by as much as 5% by 2027.

Study: modern technology fails to deliver high returns for telecoms companies

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Researchers reported that ARPU (Average revenue per user) has been declining among major telcos over the past year. Omdia expects total broadband service revenue to increase by 14% to €1.2 trillion by 2027. However, the monthly average revenue per user has already begun to decline and could fall from €7.48 to €7.16 by 2027.

However, experts believe that the decline cannot be compensated by the widespread development of 5G. The whole point is that subscribers are not willing to pay more for 5G and are willing to continue using 4G.

Study: modern technology fails to deliver high returns for telecoms companies

That said, the fixed broadband market has performed better since the move to Fibre Channel. The whole point is that the new technology and the transition to it offer a tangible improvement in connectivity, which is especially important during a pandemic. But it is important to note that once a significant proportion of subscribers have migrated, operators are again starting to record a drop in ARPU. The reason for this is that companies do not know how to monetise FOCL subscribers.

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Omdia experts predict that by 2027 there will be 5.9 billion 5G subscribers globally, representing 70.9% population-wide penetration. The number of fibre-based fixed broadband users will exceed 1 billion, accounting for 41.9% of distribution across all households. Also, experts argue that the user never pays for the technology, but pays for the emotion, experience and convenience that the technology provides. Therefore, telecom companies should come up with ways to monetise based on this judgement.

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