5G will be a greater catalyst for growth than 4G was

In 2011 the wireless industry with 3G contributed $195.5 billion to US GDP. 4G was expected to follow 3G trends and grow to $441.8 billion by 2019, growth of 126% percent. In fact, by 2019 4G had grown to $690.5 billion or well over 200%. I think 5G will have a much larger impact on industry and people than 4G did versus 3G.

I believe 5G opens up even more avenues of opportunity

4G was the catalyst for so much, mobile gaming, usable WiFi hotspots, video, and so much more. Frankly, it’s hard to remember the websites, tools, and performance assumptions we lived with from the 3G era. 4G was so much better it washed away those painful experiences. So, if 4G is so amazing, how could 5G be that much better? The 4G era found ways to leverage what users already knew and make it better, mostly. Certainly, mobile video was almost non-existent prior to 4G, but largely we made using data and sharing things easier and more enjoyable. I consider 4G as an expansion and improvement of known opportunity vs. 5G where I believe a high percentage of opportunity will be generated by net new business models. In other words, making things available that just plain wouldn’t have worked, regardless of our willingness to suffer poor experiences.

The Opportunity Space is Enormous

I know there are still detractors out there on the benefit, timing and or opportunities associated with 5G. However, I’m drawing a line in the proverbial sand and saying that by the end of 2023, 40-50% of the worlds urban population won’t know how they survived without it. When we open spaces to what will seem like limitless data transfer options, combined with low latency, the number and type of new business models we’ll create will make the initial years of app development in the iPhone store, pale in comparison. I’ve come to think about the building of the new edge and certainly the 5G edge as having several orders of opportunity.

First order opportunities: 5G will open up data use and model options across known environments.

Examples:

-      Higher quality data and video options and better experiences in existing high-tech environments (I.e., Stadiums)

-      Real time use of data created on roads, buildings, homes, cars, factories, drones, remote care, etc.

-      Enabling greater automation of traffic (vehicular, human, drone, factory floor, etc)

-      Improved customer experiences while buying or using products and services

Second order opportunities: The beginning of leverage

-      Shared or multi-tenant use cases for IoT data and sensing in general

-      New business models generated by information gleaned from millions of new data sources – Multi-tenant IoT opportunities

-      Experience oriented business models that further abstract the interaction with technology for the average consumer. In other words less technology interaction and more experience.

How are the “orders of opportunity” important here?

The orders of opportunity help provide a perspective, admittedly it’s my perspective, on the potential impact of Jevon’s paradox relative to growth and demand. We dropped the price per MB of data from $.20 in 2011 to $.05 per MB in 2019. This cost efficiency improvement in data is to applications and technology business models what making oil virtually free, would be to the rest of the economy. As a foundational commodity, critical (if hated) to most everything the economy does, making oil free would mean lower prices on everything from Tupperware to gasoline, meaning the population would use much more of both. Data and services consumed via mobile devices is a comparable situation. If over the first few years we can see data prices drop in a similar fashion to where instead of $.05, data costs $.005 per MB, the assumption goes that we’ll create and use a ton more.

Think of the first order as a rough equivalent of 4G vs 3G in benefit and opportunity - taking what 4G started and making it much better. This is a very clear opportunity and likely to justify similar growth and expansion to what 4G saw over 3G in an 8-year period. In the case of the second order, I see the potential for effectively doubling again. So, if we follow the trends of 4G growing by $495 billion in 8 years vs. 3G, then first order growth will likely mean we go from $690 billion in 2019 to $2.1 trillion by EoY 2027 and this is before second order opportunities. My line in the sand for total wireless contribution to US GDP by EoY 2027 is closer to $4 trillion.

This will be an interesting decade

I look forward to future conversations with folks where we discuss the anachronism that was the 30 GB download limit, while trying to remember how we used to interact with technology in order to elevate an experience, versus now (2025) where the experience just happens. 

Data in support of my blog

I’d like to say thanks to the folks who created the recent blog The 4G Decade: Quantifying the Benefits from CTIA. While I realize the report has the potential for skew because of the relationship to the industry, I personally support the majority of its findings.