5G and 4th Wave – An Update

“4th Wave has forced people to think about what’s next”
– CEO & President, AT&T Mobility


“I came across Chetan’s 4th Wave thesis a few years ago and thought it was the perfect framework for understanding the transformation that wireless operators are (or should be!) undergoing.”
– Vice President, CTIA


By the end of 2022, the global 5G subscriptions are likely to surpass 1 billion. It took 4G 38 quarters or 9.5 years to reach the milestone that 5G will achieve in less than 4 years. The torrid pace of network deployment and device introduction was not slowed by the pandemic, global economic woes, or supply-chain issues that have gripped much of the economy. By all accounts, LTE has been the most successful industry cycle topping a trillion dollar every year in operator revenues, creating more than $4 trillion worth of new economic activity, and helping institute fundamental disruptions across industries.

The 4G cycle did something very interesting that changed the ecosystem dynamics for ever – it introduced the vibrant and disruptive 4th Wave of revenue streams. Its surge and transformative impact have been forecasted and documented in our 4th Wave series of papers starting with 2012 paper “Operator’s Dilemma (and Opportunities): The 4th Wave” which outlined how the wireless industry is likely to evolve over the next decade. In the subsequent years, the 4th Wave thesis shaped operator strategies around the globe. It has been one of the most remarkable periods of disruption and innovation. The impact of 4th Wave has been far and wide.

In the paper, we wrote,

It is inevitable that the 4th growth curve for the wireless industry is going to bring in disruption in the industry structure, technologies used, revenue models, and at some point, the regulatory framework itself. An operator’s ability to recognize the importance of the 4th Wave in its long-term survival plans will define their role in the ecosystem. Many will fail and get assimilated by the tides of consolidation. But some will move and adapt, either forced by the financial climate or the desire to innovate and launch new services that fuels their growth for the next decade. Indeed, their future will be defined by how they react to the 4th wave of mobile.

As we get past the initial 5G deployment phase into the growth cycle of disruption and new innovative startups coming up novel ways to take advantage of the synchronous S-curves including 5G, 4th Wave remains front and center to the ecosystem narrative. There is a resurgence of finding the new revenue streams from the incumbents and creating new markets by the startups. Industry has had a decade of experience with the 4th Wave. Some operators invested heavily, many initiatives didn’t scale or ran into trouble but several of the strategies did work. Some of the 4th Wave strategies were abandoned by the operators not because they didn’t get traction but rather their core business faced the headwinds and their lack of story-telling expertise so non-core projects suffered.

Some of the leading operators have doubled down on the 4th Wave initiatives for they know the 5G cycle will be defined by it. Access is table stakes, but the market will only reward them if they become proficient in executing on the 4th Wave. How does the second innings of the 4th Wave cycle look like? How is it different from the first one? Will it shape the 5G revenue cycles the same way it did during the 4G decade? These are the questions dominating the board meetings.

It is clear that the 4th Wave will continue to define the mobile industry. Operator’s (5G) destiny over the next decade is inextricably tied to the 4th Wave. By benchmarking the various revenue streams, we can learn where the puck is going and help shape the ecosystem investment strategies. If Operators don’t succeed on the 4th Wave, their position in the ecosystem will become tenuous. However, by building a sustainable 4th Wave business can deliver growth and new revenue.

This paper takes a detailed look at the operator initiatives on the 4th Wave and what industry segments are emerging that are critical to the 4th Wave growth during the 5G era.

Table of Contents

  • Introduction
  • 4th Wave – Thesis Recap
  • Reshaping of the Ecosystem and Revenue Streams
  • 5G Impact on Service Revenues
  • Expected 5G Revenue Cycle
  • Mobile Operators 4th Wave Revenue Benchmarking
  • Operator 5G 4th Wave Strategy Case Studies
    • KDDI
    • NTT DoCoMo
    • Verizon
    • China Mobile
    • China Telecom
    • Other Examples
  • Conclusions

Editorial Notes:

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