The 5G consumer market could be worth USD 31 trillion by 2030 globally, according to the new Harnessing the 5G Consumer Potential report from Ericsson ConsumerLab. The report estimates that communications service providers (CSPs) could earn USD 3.7 trillion of that total – a figure that could increase further as new adjacent digital services opportunities arise.
The report also estimates that CSPs globally could generate up to USD 131 billion by 2030 from digital service revenues alone, by proactively bundling and marketing 5G use cases. About 40 percent of these revenue projections are attributed to consumer spending on enhanced video, augmented reality (AR), virtual reality (VR) and cloud gaming over 5G networks. The report projects that AR is likely to drive more than half of all consumer spending on immersive media by 2030 – starting with gaming and extending to other areas like shopping, education and remote collaboration.
Key findings also highlight how the impact of the COVID-19 pandemic on personal finances and financial priorities may have affected consumers’ willingness to pay a premium for 5G subscriptions. In early 2019, the average consumer was willing to pay a 20 percent premium for 5G. As 2020 draws to an end, that figure has dropped to 10 percent. However, one in three early adopters globally are still willing to pay a 20 percent premium. Such high levels of early adopter take-up could help drive economic recovery, according to the report.
The report also projects that by proactively driving 5G consumer adoption, CSPs could gain 34 percent higher 5G average revenue per user (ARPU) by 2030. This could boost consumer revenues at a compound annual growth rate (CAGR) of 2.7 percent compared to flat revenue growth of 0.03 percent by taking a passive approach across the decade.
Jasmeet Singh Sethi, Head of ConsumerLab at Ericsson Research says, “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. 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.”
The report also highlights the enabling role technologies such as edge computing and network slicing will play in helping service providers to secure 5G-enabled consumer revenue. This could come from core digital services like cloud gaming and augmented reality applications, or adjacent digital services, such as in-car connectivity and associated safety features.
In South East Asia and Oceania, communication service providers could earn USD 297 billion in 5G-enabled consumer revenues by 2030. 5G broadband services market will be worth nearly USD 229 billion by 2030. While eMBB will make up 91% of 5G broadband revenue by 2030 growing at a CAGR of 134%, the 5G-FWA market will be worth over USD 5.4 billion by 2030 with 89 million subscriptions by 2030. 79% of the total service provider 5G digital services revenue, estimated at USD 7.5 billion by 2030 will be driven by enhanced video and HiFi music. 5G digital services include video, music, gaming, augmented/virtual reality and consumer IoT services.
David Hagerbro, Head of Malaysia, Sri Lanka and Bangladesh at Ericsson states, “The success of 5G in the consumer market will be important for communication service providers and will spur the momentum towards developing new use cases for industries and enterprises. To realize the 5G consumer potential in Malaysia once 5G is launched in the country, the telecom industry needs to innovate and collaborate to introduce Malaysian customers to the full benefits of 5G”.
In May 2019, Ericsson ConsumerLab released a report that measured consumer interest across more than 30 use cases and their willingness to pay for them. The new 5G Consumer Potential report builds on those insights through business potential forecasts, both for service providers and the larger ICT ecosystem.