One of the main themes we sought to investigate with our attendance at the Mobile World Congress 25 show in Barcelona this year was whether the mobile operator industry has made progress in finding new sources of revenue above and beyond bare-bones mobile data. Several themes were evident: first, Fixed Wireless Access (FWA) continues to offer new opportunities; second, network-sliced business opportunities outside of China are emerging; and third, consumer-class add-on services are emerging. We found some encouraging signs of new operator revenues in the weeks leading up to MWC and at the show. We see that when there is tight collaboration between a technology vendor and a mobile operator, new revenue sources can occur more readily, and there are significant regional differences in the opportunities for new revenue generation for mobile operators.
3GPP-based FWA services have surged in the past few years, especially in the US market, driving growth at operators like T-Mobile US and Verizon. Considering the past several years of the 5G era, FWA has been the most significant successful new source of revenue for operators. In fact, in the US market, mid-band spectrum will be running out soon in many locales because of the success of FWA, which is driving operators to seek additional broadband traffic-carrying alternatives, such as fiber broadband networks and mmWave FWA. At the show this week, we learned that Nokia is seeing new opportunities emerge for its mmWave products as operators have nearly expended their mid-band capacity. A relative newcomer to the mobile operator FWA scene, Tarana Wireless started its foray into FWA by offering rooftop and CPE gear to Wireless ISPs. However, the company has set its sights on larger mobile operators, as it had a well-attended booth (its first time at MWC since 2019). Over the past year, Tarana has successfully sold to larger mobile cellular operators.
A couple of weeks before MWC25, T-Mobile US announced numerous emergency wireless services contracts with some very large municipalities, including New York City. We’ve long waited for network slicing to offer new revenue sources for a mobile operator in the US market. Now, we have concrete evidence that slicing can produce new revenue opportunities. At the MWC show this year, we had numerous discussions citing this recent success as a reference for why using 5G SA (stand-alone) can drive new opportunities. Nokia and Ericsson were among the vendors participating in various aspects of T-Mobile US’s slicing-based service. Along the theme of using slicing, we were reminded on a handful of occasions at MWC25 that private slices of public mobile operator networks are being used for shipping ports and similar uses; this means that mobile services from existing towers are being used to offer a high-qualit level of service for doing things like remotely operating cranes.
Speaking of 5G SA, in the Chinese market, SA is very widely deployed and has been used well before it was used in non-Chinese markets. Thus, the market in China has long had the opportunity to showcase new uses for 5G besides just higher speeds. In our visit with Huawei, the company’s wireless RAN (and core) offerings and its broadband (and in-home) offerings were oriented to showcase new services that its operator customers can deliver to add new revenue sources. For wireless operators (most notably China Mobile), Huawei was showing its services offerings it is bringing to market with China Mobile like “VIP Services” that enable higher-paying mobile users to get higher network priority (and the operator, more revenues); additionally, the company shared its vision for enabling mobile operators with the capability to offering AI agentic services to third parties. In most of the wireless cases, the Huawei team cited various 3GPP standards building blocks (including those from 3GPP Release 16, 18 and 20) as its methods to delivering these services today and in the future. For broadband services operators (which primarily meant Passive Optical Network operators), Huawei is offering numerous add-on services to its operator customers like lidar-based fall detection for seniors, AI processing gateways (with agentic services offerings), lower-latency gaming-class throughput, and (AI-based) avatar systems that are an interface to numerous in-home services.
We joined Rakuten for its press event, and its CEO reminded the audience that its 8 million mobile network users are monetized in numerous ways; the typical mobile user also uses at least a few other Rakuten services (like payments, shopping, etc.). Rakuten is an unusual mobile operator because it was a successful e-commerce Internet company before entering the mobile network operator industry.
To conclude, we are seeing some hopeful signs that mobile network operators are having success offering new revenue-generating services based on 5G networks. It is early days but encouraging. To put the three major themes in context, the first two, FWA and emergency services on 5G, could be viewed as new to mobile operators and a decrement to others (like wireline operators). At the same time, the third category might be more aptly viewed as newfound sources of revenue (like agents or gaming-quality services, neither of which exist en masse today). But since the MWC25 show is about mobile operators, we were looking at opportunities for mobile operators. In our visit to the Ericsson booth, we spoke with an Ericsson spokesperson who conducts consumer research. We were told that consumers are interested in paying mobile operators something on the order of 10% more for new, value-added services. This modest uplift would be welcome in the relatively mature mobile service industry.