The first four generations of wireless have been very consumer centric so the diffusion process was easier to understand. One had to just figure out the unit economics of revenue growth and then focus the energy on optimizing this metric every quarter and that’s what defined the competitive landscape domestically and globally. However, 5G’s diffusion process requires a more nuanced approach in studying the growth curves to formulate thesis on what works and what remains challenging. The 5G density is not entirely dependent on consumer adoption as we have seen many countries haven’t been able to reap any benefits of 5G deployment – their ARPUs and net revenue have stayed flat or declined despite the billions in investment.
Operators in Europe saw the LTE cycle decimate their marketcap in more than half and they are at the weakest point in their 4-decade history. We have seen the US continue its dominance in the market cap and revenue generation on the back of its consumer economy. However, China has emerged as a new leader in the wireless industry honing its 4th Wave strategy over the course of the last five years and laying a solid foundation for 5G Advanced and 6G. It did this primarily due to its relentless focus on the industrial sector. For the first four generations, India was barely mentioned as an interesting market to understand but now both Jio and Airtel are in the top 7 operators by marketcap and have seen their ARPU jump the most in the first half of the 5G cycle.
All three major markets – China, India, and the US have attained scale in their own way, they have different revenue generation trajectories, and their diffusion and density of 5G holds valuable lessons for all markets. Policy makers and industry leaders must understand this dynamic to better prepare for the second innings and yes, eventually, 6G.
We propose a more nuanced but holistic theory of diffusion to better understand what is transpiring on the ground. Traditional diffusion analysis is often one dimensional and is generally based only on consumer adoption numbers. The industrial technology diffusion works quite differently and is influenced by a multitude of factors. Diffusion shapes economic competitiveness, it nurtures the next generation of technologies, it accelerates the synchronous S-curves to push each technology adoption, vertically. The industrial diffusion also needs to be managed through regulatory, and policy means vs. the organic growth of the consumer diffusion of any technology.
Further, historically, nations who have led in innovation also stay ahead in diffusion. However, we are seeing new dynamics appear in the marketplace. The countries who excel in the adoption of technology with higher diffusion rates are the ones who truly reap the benefits across leading sectors of the economy. A new network feature is of little use if the developers aren’t using it. Thus, industries and governments must institute deliberate policies that are catalyst to the diffusion process across consumer and industrial sectors. Without a consciously urgent approach, the diffusion process will lag in the industrial sector and the realization of the true potential of synchronous S-curves technologies like 5G, AI, and Autonomous will be delayed. Countries will lose their competitive advantage. Innovation alone won’t be enough.
By separating out the consumer and industrial 5G diffusion, density, and scale, we are better able to grasp the different growth trajectories seen in the marketplace. This paper provides a comprehensive analysis of the current global 5G landscape, examining the progress in deployment and adoption, the performance and strategies of key companies within the ecosystem, the crucial lessons learned during the rollout, and the anticipated future directions of 5G.
