The 5G explosion we’ve been hearing about for many years has started off with more of a mild bang, although the ongoing pandemic has most certainly played a role in that.
Looking to the future, because what difference does one year make in the context of a decade, Ericsson is estimating some lofty numbers as regards the value of the 5G market by 2030.
The Harnessing the 5G Consumer Potential report from Ericsson ConsumerLab sought to, “uncover the 5G consumer revenue opportunity for communications service providers until 2030” and was undertaken with Omdia. The insights were delivered through Ericsson Consumer and IndustryLab.
The report reveals that 5G may be the answer to fixing a stagnant market for communication service providers. Ericsson’s report states that in 16 markets where there was a first-mover period, 50 percent of first-movers saw signs of market share gains.
But being first is not enough, there must be a real value proposition for the customer and that means communications service providers are going to have to be smart about how they launch 5G.
“The transition to 5G provides an opportunity for service providers to strengthen their position in the consumer market, with the focus on 5G quality and availability of new digital service bundles on a 5G plan,” reads the report.
But bundles won’t be enough because, as with most things, COVID-19 has left an indelible mark on the world.
Price, price, price
The COVID-19 pandemic has change how consumers feel about spending.
In May 2019, an Ericsson ConsumerLab survey found consumers would be willing to spend a 20 percent premium for 5G services. A recent study has dropped this premium down to 10 percent and only 33 percent of respondents were willing to pay a 20 percent premium.
However, with more people at home the value of a stable internet connection and next-generation services like cloud gaming and remote digital experiences have increased for consumers.
Should service providers be able to get pricing and experience balanced, they could enjoy a $3.7 trillion share of a $31 trillion market.
“Connectivity accounts for most of those revenues, but digital services will uplift connectivity revenues with service bundling, encouraging consumers to upgrade to higher tariff tiers. By 2030 almost 6 billion 5G subscribers are likely to spend on average $9.61 per month with service providers pursuing a proactive strategy,” Ericsson’s report reads.
There is clearly gold in them there hills, but how much service providers will eek out, hinges on how innovative their offerings are.