The 5G Killer App: More Connections 

By Phil Kelley, EVP, Corporate Development & Strategy, Crown Castle 

Note: This blog was produced under WIA’s Innovation and Technology Council (ITC). The ITC is the forum for forecasting the future of the wireless industry. Participants explore developments in the wider wireless industry, from 5G network monetization trends and streamlining infrastructure deployment to future spectrum needs and cell site power issues. The group is publishing a series of thought-leadership pieces throughout 2024.

When we think about 5G monetization, everyone is focused on the “killer app” that will drive people to pay more for wireless service, but carriers don’t monetize their network through people paying more, they monetize it by getting more people to pay. 

If you step back and look at the history of our industry, the average revenue per user (ARPU) has been relatively flat over time. Revenue growth is a function of price times quantity (PxQ), but in wireless, revenue growth has largely been a function of Q: how many people or things are connected. 

In previous generations of wireless, there was a killer app to drive connections: 1G was voice, 2G was text, 3G was email, and 4G was video. 1G, 2G, and 3G drove higher penetration, and 4G expanded the number of connected devices beyond phones to include tablets and watches. 

As we move to 5G, it is not surprising that the first monetization success story is fixed wireless access. FWA equals more connections. 

Many expected 5G to create an inflection upwards in the revenue line of wireless operators. Some of that may be misplaced expectations, but part of it also may be that true, standalone 5G networks are just now getting deployed. Networks need a 5G Core to enable the truly transformational functionality that comes with 5G, which includes efficiently connecting lots and lots of things. 

Connecting Enterprises 

The first place to look for more 5G devices is the enterprise space as 5G is expanding the market from consumers to businesses. That means connecting not only buildings and infrastructure but also the equipment in and around the enterprise – machines, robots and drones to name a few. 

Crown Castle uses drones to create digital twins of our towers. Drone data improves safety (fewer tower climbs), accelerates application processing, and provides better information sharing with customers.  

Those types of efficiencies exist across other infrastructure sectors as well. Utilities are using drones to inspect power and transmission lines. Commercial real estate owners use drones to assess damage to buildings and roofs after storms. Public safety agencies are using drones with thermal cameras to fight fires more safely and effectively by showing firefighters the safest entry point and pinpointing where to direct hoses.  

Then there are untold use cases for applications enabled by 5G wireless connections and artificial intelligence. Simple IoT applications like automatic license plate readers are already taking hold in the real world. Enterprises are now figuring out which applications make sense – and which do not. 

I recently saw a robot shuttling trays from one area to another in an airport lounge. Someone loaded the trays onto the robot, and then the robot was slowly trying to navigate its way through a very crowded lounge to a dishwasher area, where someone would have to unload it. That seems to be a solution looking for a problem. 

On the other hand, there are “walk-in walk-out stores” in many sporting arenas now. When I take my daughter to an Astros game, she always wants to get ice cream. That used to be a time commitment of at least an inning and a half due to long lines. But with the new retail store, I can scan my credit card, walk in, pick up a pint of ice cream to share and walk out. It literally takes seconds.  

That is the kind of application that can and should be applied broadly from a retail perspective. Many retailers now only offer self-checkout, but there isn’t enough room at the checkout stand for your items and the system thinks you are stealing because it doesn’t sense the weight of whatever you just scanned because there is no place to put it. The transaction is stopped, and a supervisor has to come over. It takes forever and it’s a horrible user experience. 

Why not remove the entire checkout process? Walk in, fill your cart, and walk out. That is the kind of technology application that will drive adoption and revenue expansion for wireless. 

Virtuous Data Cycle 

As more 5G connections are made, more data needs to be collected, providing another benefit and potential revenue source for wireless networks.  

For example, a lot of attention is being paid to autonomous vehicles, which require a large number of connected sensors. The value of that data extends beyond autonomous driving, particularly if it is moved to the cloud and can be harvested, analyzed and applied to other applications beyond vehicle operation and safety. Consider that connected vehicles can provide data that would tell a retailer how many people are entering their parking lot at a given time, share the weather in that car’s specific location, and locate potholes that need to be filled. There is a tremendous amount of data that’s going to be captured as an ancillary use to making sure your Tesla does not crash. 

The better data you have, the better AI model you will have. Then, you can use AI to make better decisions and create more value. That leads to even better data and AI models. It is a virtuous cycle that will lead to more use cases, more 5G connections and more wireless revenue. 

Where wireless data demand goes, so goes the infrastructure, the carriers and equipment. We all exist because of this ever-increasing demand for the ultimate product that we supply: data.