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Our latest 5G business potential report: Set your compass now
As part of Ericsson’s promise to “share” important information with our partners, we will highlight a report that may be of interest to regional carriers in each issue of “Regional Connect Magazine.“ For our inaugural issue – and because 5G is such a hot topic – we are focusing on 5G business potential.
Global 5G deployments are well under way. However, many communications service providers have not yet invested in realizing the business potential of 5G. So let’s clarify: The business opportunities for 5G, beyond enhanced mobile broadband, are significant. But how significant? Industry digitalization will generate an estimated $700 billion addressable market opportunity for service providers by 2030, which we cover in-depth in our latest 5G business potential report, 5G for business: a 2030 market compass. Let me introduce you to the key insights and the opportunities.
Ericsson has been researching business opportunities for service providers since 2016, and has evolved its model to provide clear insights into the market outlook. The study is the first of its kind where valuebased studies are concerned, and takes a holistic perspective for service providers by quantifying the value of their potential addressable market across more than 200 use cases, 10 different industries, and a set of 5G-enabled business-to-business (B2B) use case clusters. Here are my top
three findings:
1. Proven significant opportunities for service providers
Industry digitalization is expected to result in a surge for ICT B2B revenues, some of which will be driven by 5G. Ericsson anticipates that of the total 5G-enabled value in 2030, up to 47 percent is addressable by service providers. This is based on the value of the global total addressable “5G for industrial digitalization” revenues across the 10 industries involved. Just as importantly, we now see that 5G-enabled B2B value is ramping up in different ways than we previously expected.
2. The journey to grow 5G business starts now
Service providers have the opportunity to play an important part in shaping industry digitalization and could take up a variety of key roles to help shape the 5G ecosystem, whether it’s through connectivity provisioning, business service delivery or end-user applications, for example. From the combined view of our 10 selected industries, the research identifies a global addressable market opportunity of up to 35 percent by 2030, on top of the value of the offerings currently available from service providers today. Service providers should prepare to cultivate new 5G-enabled enterprises, and shape industry development that truly monetizes 5G. Industry examples we’re already seeing advance to 5G typically build momentum using private networks, such as in Germany with e.Go and Vodafone in automotive, 1 and Deutsche Telekom with campus networks. 2 To move away from the present and ensure future opportunities are captured, it’s essential that service providers build early momentum.
3. Identify opportunities on which to capitalize by use case cluster
synergies needed to be cost-competitive when entering a new market. Instead, grouping use cases with similar attributes together allows us to examine the opportunities also by use case type – or cluster – rather than only by industry. We’ve identified nine use case clusters that cover around 90 percent of the market opportunity for service providers that represent ways to capture economies of scale.
Addressing industries separately and looking at one use case at a time probably isn’t the most optimal way to create the
Jan Karlsson,
Senior Vice President, Head of Business Area Digital Services, Ericsson
Developing deeper insights and taking action
It’s not all smooth sailing, however. The 5G-IoT landscape offers enormous potential but is complex and demands a comprehensive understanding if it’s to be fully leveraged. Another reason for service providers to invest early in 5G, business development, and even organizational changes is that they can be fully prepared to grasp these new and developing business models.
The time is now. Service providers must act and build early momentum if they’re to be fully prepared for the opportunities that are fast approaching. Let’s build the 5G business of the future, together. Set your compass now!
1 “Ericsson, Vodafone and e.GO launch 5G car manufacturing in Germany,” https://www.ericsson.com/en/news/2019/6/5g-car-manufacturng-with-ego-ericsson-and-vodafone
