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75% of enterprises willing to pay more for 5G

10-08-2017 | Global Updates
Three quarters of IT and business leaders at end-user organizations are willing to pay more for 5G, recent research from Gartner indicates.

A survey indicates that 31% of organizations are willing to pay up to 10% higher for 5G than 4G, 22% are willing to pay 10-20% more and 14% are willing to pay 20-30% more. But just 8% are willing to pay a premium of 30% or above.

Willingness to pay a premium varies by industry, with respondents in the telecom industry more prepared to pay more for 5G for their internal use than those in other sectors, such as manufacturing, services and government.

Despite the willingness to pay more for 5G, only 8% of respondents expect the technology to deliver cost savings or increase revenues. Instead 5G is mainly seen as a network evolution (59%) and only secondarily seen as an enabler of digital business (37%).

Respondents from the telecoms sector are also less likely than those in other industries to believe that 5G will be a revenue enhancer. “They tend to see 5G migration as a matter of gradual and inevitable infrastructural change, rather than as an opportunity to generate new revenue," Gartner research director Sylvain Fabre said.

Across industries, the majority of respondents (57%) believe that their organization's main use for 5G will be for IoT communications.

“This finding is surprising, as the number of deployed 'things' that need cellular connectivity won't exceed the capacity of existing cellular IoT technologies before 2023 in most regions," Fabre said.

"Even once fully implemented, 5G will suit only a narrow subset of IoT use cases that require a combination of very high data rates and very low latency. In addition, 5G won't be ready to support massive machine-type communications, or ultra-reliable and low-latency communications, until early 2020."

Fabre said this result may demonstrate that there is confusion about 5G's applicability given the lower-cost alternatives available for wireless IoT connectivity.

Another area of confusion involves the fact that 84% of respondents believe that 5G will be widely available soon after it is standardized - by 2020 - while operators' plans indicate that wide availability may not be achieved before 2022 .

Gartner instead predicts that by 2020 only 3% of the world's mobile network operators will have launched 5G network commercially.