The potential revenue generated from 5G is yet to be determined, but experts believe it will be substantial in the coming years once the next generation wireless technology has matured and deployment expands beyond just certain points in cities.
Ericsson has released a new report that the 4G consumer market could be worth $31 trillion by 2030. The report said that communications service providers (CSPs) could earn $3.7 trillion of that total and could generate up to $131 billion by 2030 from digital service revenues alone by bundling and marketing 5G use cases.
The core digital services that will generate revenues include:
- Live sports streaming: Spending on mainstream sports when live streamed via dedicated standalone sports streaming video services.
- Enhanced video: Such as video on demand services in 4K/8K and new formats.
- Music: Digital music services delivered over 5G based on the portion of data usage that can be directly allocated to 5G as opposed to Wi-Fi.
- Gaming: Consumer spending on mobile games that are downloaded and played on a 5G service.
- Cloud gaming: Money spent on cloud gaming services delivered over 5G.
- Augmented reality/virtual reality (AR/VR): Spending on mobile AR/VR content via 5G on mobile devices or smart glasses.
- Consumer IoT: 5G wearables and smart home devices where 5G is used instead of fixed broadband.
Ericsson said that about 40% of the revenue projections will come from video, AR/VR and cloud gaming alone. Other revenue generating services include digital advertising, in-car entertainment, in-venue digital services such as multiple camera angles, advanced digital services such as holographic entertainment and M-commerce such as consumer payment services run over 5G.
In its findings, Ericsson said CSPs could gain 34% higher 5G average revenue per user (ARPU) by 2023 and could boost consumer revenues at a compound annual growth rate (CAGR) of 2.7% compared to flat revenue growth of 0.03%.
"This is the first time that Ericsson has presented a revenue forecast for the 5G consumer market, which remains the core business of communications service providers,” said Jasmeet Singh Sethi, head of ConsumerLab at Ericsson Research. “Through our research, we have highlighted the role of use case development, tariff innovation, quality 5G coverage and ecosystem partnerships to unlock the true potential of this market. It is clear that 5G will drive enormous opportunities for CSPs in consumer business over the decade. As this journey is already underway, those CSPs that quickly and proactively evolve their consumer propositions are likely to be bigger winners."
Learn more about Ericsson’s findings with Ericsson’s “Harnessing the 5G consumer potential” report.
