A new report has revealed a correlation between fifth-generation (5G) uptake and revenue growth for communications service providers (CSPs).
A special Ericsson Mobility Report, the Business Review edition, highlights a positive revenue growth trend since the start of 2020 in the top 20 5G markets, which account for about 85% of all 5G subscriptions globally, that correlates with increasing 5G subscription penetration in these markets.
“Flattening revenues have been a challenge for service providers in all parts of the world, often impacting network investment decisions as part of their business growth strategies, known as monetisation in the industry,” the report outlines.
The report, addressing monetisation opportunities as they relate to 5G, found that the top 20 5G markets have seen a significant network performance boost following the introduction of 5G services, with wireless service revenue curves starting to “point upwards” after a period of slow or no growth.
“The link between 5G uptake and revenue growth in the top 20 5G markets underlines that not only is 5G a game changer, but that early adopters benefit,” says Ericsson executive VP and head of networks Fredrik Jejdling.
“What is particularly encouraging about this is that, while 5G is still at a relatively early phase, it is growing fast with proven early use cases and a clear path to medium and long-term use cases.”
According to the report, enhanced mobile broadband (eMBB) is the main early use case for 5G, driven by increasing geographical coverage – more than one-billion 5G subscriptions are currently active across some 230 live commercial networks globally – and differentiated offerings.
5G eMBB offers the fastest revenue opportunities for 5G, as it is an extension of service providers’ existing business, relying on the same business models and processes.
“Even in the top 20 5G markets, about 80% of consumers have yet to move to 5G subscriptions - one pointer to the potential for revenue growth.”
Fixed Wireless Access (FWA) is the second biggest early 5G use case, particularly in regions with unserved or underserved broadband markets, offering attractive revenue growth potential for CSPs as it largely uses mobile broadband assets.
FWA connections are forecast to top 300-million within six years.
“Beyond consumer subscribers, there are growing opportunities in enterprise and public sector applications across the world. 5G enables significant value for enterprises, with private 5G networks and wireless wide area networks being deployed for enterprise and industrial use,” he says.
Upgrading existing fourth-generation sites to 5G has the potential to realise increases of 10 times in capacity and reduce energy consumption by more than 30%, offering the possibility of growing revenue and lowering costs, while addressing sustainability.
“An equally crucial aspect of 5G is that it brings cost advantages and helps service providers handle the data growth needed to drive future revenue. This can make 5G the growth catalyst that the market has been waiting for,” Jejdling concludes.