Cantillon: Do users have any appetite for 5G?

Are telcos about to hit a bump in the road? With the advent of 5G, you’d forgive them for throwing their hands in the air and deciding to pass on the new technology. The ink was barely dry on the new contracts for the fourth generation of mobile services before the whispers about 5G started.

Standards are being hammered out for the technology, expected to be rolled out between 2018 and 2020. When it hits the market, 5G is expected to support faster speeds for thousands of users, at several tens of megabits per second.

But Irish networks are still counting the cost of the 4G investment, which netted an initial €855 million for the exchequer in 2012. Many consumers aren’t entirely sure why they need the new technology. Sure, they can stream video on their smartphone for the commute home, or video chat with friends and relatives without having to connect to a more robust wifi network, but are Irish mobile users all that keen on 4G services?

Is it a large enough leap from 3G to significantly impact mobile users’ experience? The number of networks offering free 4G services to customers would indicate that the technology is still struggling to find a market willing to pay extra for it. Three Ireland earlier this year ditched plans to charge users an extra €5 per month for 4G services.

This could be a stumbling block for telcos, who have invested heavily in acquiring 4G spectrum. Average revenue per user is falling as consumers seek better value from their phone plans. There’s more competition in the mobile market – even as O2 Ireland merged with Three – as two new mobile virtual network operators hit the Irish market. The once great revenue driver SMS is under threat from Whatsapp, Viber and even Facebook Messenger. Mobile phone firms are investing in beefing up their infrastructure.

You’d forgive them for asking if there was much point in getting on the 5G bandwagon. If Irish mobile phone operators are slow to implement the new 5G standard, will customers here miss out?