A new report from Swedish networking and telecom firm Ericsson projects that the emerging fifth-generation (5G) cellular technology can create up to $31 trillion in cumulative consumer revenue in the Information and Communications Technology (ICT) industry globally by 2030.
The tech company estimates that communications service providers (CSPs) across the globe could earn $3.7 trillion of that projected cumulative consumer revenue ($31 trillion) which could only rise further as new adjacent digital services opportunities emerge.
It is estimated that as much as $131 billion in revenue to CSPs will come from digital service revenues alone as the service providers proactively bundle and market 5G use cases.
The report projects that close to 40 percent of this income could be generated from consumer spending on enhanced video, augmented reality (AR), virtual reality (VR) and cloud gaming over 5G networks.
AR is seen as the most likely source which will drive more than half of all consumer spending on immersive media by 2030, starting with gaming and spreading to other areas like education, shopping and remote collaboration.
Ericsson Research’s Head of ConsumerLab, Jasmeet Singh Sethi remarked that “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 revealed that COVID-19 impact on personal finances and financial priorities could have impacted users’ eagerness to pay a premium for 5G subscriptions.
The Ericsson report observes that while the average customer was willing to pay a 20 percent premium for 5G in early 2019, the figure has halved to 10 percent by the end of this year.
It is understood that one in every three early adopters across the globe is still willing to pay a 20 percent premium for the much-coveted 5G service. The report expects these early adopters to boost economic recovery in the sector.
As per the report, CSPs could gain 34 percent higher 5G average revenue per user (ARPU) by 2030 if they engage in proactively driving 5G consumer adoption. This, in turn, 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.
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