The Power of 5G: Transforming Connectivity, Business, and Customer Experiences

5G, the fifth generation of mobile networks, represents a significant leap forward from current 4G networks. The introduction of 5G technology, plus the opening up of new spectrum bands, is enabling a big increase in the data carrying capacity of our mobile networks. 

5G will also enable new forms of mobile differentiation and monetisation. Initially, 5G will add data capacity to existing 4G networks. Later, further upgrades to fully "standalone" 5G systems will unlock the potential for new use cases such as mobile edge computing and network slicing.

This addresses a critical need in Australia. The potential of 5G to transform mobile broadband and support instantaneous connectivity for numerous devices, will help enhance consumer satisfaction and business productivity. 

Market Penetration & Opportunities

The MVNO market in Australia is robust. Venture Insights estimates that MVNO connections will grow at 8.6% per annum to FY27 as households increasingly seek out telecommunications bargains. We expect revenue to grow even faster, at 11.5%, as ARPUs rise with migration to larger data allowances.

5G will be an enabler of this growth. According to the Australian Communications & Media Commission (ACMA), 36% of all mobile services used 5G by mid-2023. On the network side, about 37% of all mobile sites were 5G enabled in January 2023, up from 28% in January 2022. 

Most 5G sites are currently in major cities, but regional coverage is growing. Optus recently entered into a 4G/5G network sharing arrangement (MOCN) with TPG in regional Australia. The efficiencies gained from this agreement will allow Optus to accelerate its 5G rollout in regional Australia.

The ACMA expects that 5G penetration will increase to 74% by mid-2027, providing faster and more reliable connectivity to a broader consumer base, while extending mobile edge and network slicing to a larger business base. This improved accessibility is expected to facilitate a range of applications and services that were not feasible with previous generations of mobile technology. 

Benefits of 5G for Users

As the rollout of 5G technology progresses, it brings with it opportunities for the telecommunications sector. 

Firstly, 5G technology brings higher data speed. According to Qualcomm, 5G can deliver up to 20 Gigabits-per-second (Gbps) peak data rates and 100+ Megabits-per-second (Mbps) average data rates. This increase in speed is driving higher data consumption. The Australian Competition & Consumer Commission (ACCC) reports that total mobile data downloads rose by 27% from June 2022 to June 2023. 5G will be instrumental in supporting this data consumption. 

And Optus leads for speed: independent tester OpenSignal this October awarded Optus as Australia’s fastest 5G mobile network for download speeds, being the sixth time in a row Optus has won this award. OpenSignal also named Optus a winner in the following categories:  

• Overall Experience category for Video, Live Video and Games Experience; 

• 5G Experience category for 5G Video, 5G Live Video, 5G Games Experience; and 

• Consistency category for Consistent Quality. 

For consumers, the main benefit of 5G is faster speed and more data capacity to support high bandwidth services like video. Faster speeds tend to drive more video consumption, and this can be monetised by upselling to higher mobile data plans. And using 5G to carry data traffic frees up 4G capacity to improve performance there too, improving the experience for customers who have less demanding requirements.

For business users, this higher speed coupled with higher capacity and lower latency will support more real-time data processing and online services. Lower latency is particularly vital for applications requiring instantaneous reactions, such as autonomous vehicles, automated manufacturing, and telemedicine. Through improved responsiveness, 5G can enable more seamless user experiences.

5G networks are also engineered to handle a higher density of connected devices. This is a significant advantage for Internet of Things (IoT) applications, allowing more devices per square kilometre without compromising network performance. 

Benefits of 5G for Service Providers

The challenge for service providers is to monetise user interest in 5G. And this challenge has to be met in a crowded market. In particular, Venture Insights expects white label providers and carrier sub-brands to compete aggressively for mobile customers in the coming years.

This challenge is different for consumer and business segments. In the consumer segment, targeting customers who want higher speeds and more data is crucial. This requires data analytics that can identify customers who are potential customers for the enhanced performance of 5G, and target them with offers that are designed to leverage 5G capabilities. 

Demand for bandwidth, capacity and (in some cases) low latency will increasingly be driven by services like virtual and augmented reality experiences and gaming. Bundled value-adds like video and audio streaming services also become more feasible with 5G, helping to grow revenue and reduce churn. Customers who are interested in any of these services are a potential up-sell.

Another readily available option is to leverage Optus 5G for fixed wireless access (FWA) in competition with other fixed broadband providers. Optus offers 5G FWA as a wholesale product. According to the ACCC’s latest Internet Activity report (June 2023),  

5G’s higher device capacity and low latency can also deliver unique benefits in the business segment, but this is also a more demanding segment to serve. Autonomous vehicles, factory automation, smart cities, and telemedicine are among the B2B applications that stand to gain significantly from real-time connection and enhanced connectivity. 

Service providers can tap into new revenue streams by developing and offering industry-specific solutions tailored to these business customers. The mobile service providers who do this are typically specialists, with detailed knowledge of the details of the industry and the ability to design and/or deploy industry-specific solutions.

Finally, more is in the pipeline. Network slicing – a feature specific to 5G – will allow operators to create multiple virtual networks within a single physical 5G network. Each slice can be tailored to meet the specific needs and performance requirements of different applications, from high-speed mobile broadband to critical IoT services. This means business users will be sure that advanced digital applications get the quality of service they require.   

Ready to explore how mobile services can enhance your business? Whether you’re looking to expand your portfolio or become an Optus Wholesale MVNO, we’re here to help you unlock new opportunities. Speak with us today about adding mobile services to your offering and staying ahead in an increasingly competitive market. Let’s discuss how we can help power your growth and strengthen your brand with the right solutions.

[1] 5G available in selected areas and on select plans. Actual download speeds may vary by area. Check Optus website for coverage. Opensignal Awards – Australia: Mobile Network Experience Report April 2024.