Mobile operators are still struggling to create ARPU uplift from network upgrades as mobile data revenue fell below US$1 per Gigabyte for the first time in Q4 2020. According to the latest report from Strategy Analytics, “Mobile Data Revenue per Gigabyte Falls Below US$1 as 5G Ramps Up”, weak service revenue growth in the strong 5G markets of South Korea and China paint a challenging picture for consumer 5G value creation across the globe in 2021.

Weak service revenue growth in the strong 5G markets of South Korea and China paint a challenging picture for consumer 5G value creation across the globe in 2021.

Global cellular data traffic increased 35 percent in Q4 2020. Mobile service revenue increased just 0.6 percent in Q4.

Key findings from the report include:

• Subscriptions used on 5G networks increased from 2.1% in September 2020 to 3.0% in December 2020, with China accounting for 80% of global totals;
• China and India have a significant volume influence on global revenue per Gigabyte, averaging just US$0.55 and US$0.10 respectively in Q4;
• Speed-based tiered unlimited data plans in Finland have helped lift average revenue per user (ARPU) 17% over the last five years, compared with a 15% decline across Western Europe.

“Volume-based data pricing is going to cause a headache for many mobile operators conditioned to utility-based revenue or cost per unit thinking. Operators need more for more pricing that offers revenue uplift through better experiences and richer content rather than through more data,” Phil Kendall, Director, Service Provider Group, said.

“With many consumers picking price plans that fit their budget first and their data usage requirements second, operators need to educate users away from high-volume low-cost plans and the idea that 150GB is meaningfully better than 100GB,” Josie Sephton, Director, Teligen, said.

According to data provided by Omdia, the world added 385.5 million 5G subscribers between Q4 2019 and Q4 2020 to reach 401 million 5G connections globally. The number of 5G connections is expected to reach 619 million globally by the end of 2021.

Omdia projects global 5G connections will reach 3.4 billion in 2025. The number of 5G connections is forecast to reach 451 million in North America and 167 million in the Caribbean and Latin America by the end of 2025.

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