ericsson.

com/
consumerlab

Harnessing the 5G
consumer potential
The consumer revenue
opportunity uncovered

Ericsson Consumer and Market Insight report

2 Ericsson  |  Harnessing the 5G consumer potential

Contents

03 Key findings Methodology About Ericsson Consumer & IndustryLab

05 5G could help arrest mobile Ericsson, together with Omdia, has Ericsson Consumer & IndustryLab delivers
revenue stagnation undertaken this study to uncover world-class research and insights for
the 5G consumer revenue opportunity innovation and sustainable business
06 5G is an opportunity to gain a for communications service providers development. We explore the future of
competitive advantage until 2030. The study involved building consumers, industries and a sustainable
an extensive revenue forecast model society with regards to connectivity
07 The pandemic and the
which considered various data sources by using scientific methods to provide
consumer demand
and inputs. These included internal strategic unique insights on markets, industries and
08 5G consumer revenue opportunity forecasts from the Ericsson Mobility Report consumer trends. Our knowledge is gained
around 5G subscriber growth, and extensive in global consumer and industry research
09 The trillion-dollar opportunity ConsumerLab insights on 5G early adopter programs, including collaborations with
for service providers behaviors and trends, in addition to renowned industry organizations and
10 Pricing innovation to capture forecasts from Omdia around the potential world-leading universities. Our research
the connectivity opportunity revenue opportunity for core and adjacent programs cover interviews with over
digital services, ranging from cloud gaming 100,000 individuals each year, in more
14 Beyond connectivity and to m-commerce. than 40 countries – statistically
core digital revenues Ericsson ConsumerLab also conducted representing the views of 1.1 billion people.
an online survey among 7,500 smartphone
15 The upside of a proactive approach
users across 17 markets (Australia, Belgium, All reports can be found at:
China, France, Finland, Germany, Ireland, www.ericsson.com/consumerlab
Italy, Romania, South Korea, Sweden,
Switzerland, the UK, the US, the UAE, Qatar
and the Kingdom of Saudi Arabia) in
July 2020, representing the opinions of
750 million consumers. The study was
designed to understand the impact of the
pandemic on 5G adoption and willingness
to pay for devices and plans.

Key definitions
Core digital services revenues: •A
 ugmented/virtual reality: consumer • I n-car entertainment/connectivity:
• Live sports streaming: Consumer spend on mobile AR and VR content share of consumer spend for media,
spend on mainstream sports when delivered over 5G on mobile devices, entertainment and connectivity services
live-streamed via dedicated standalone glasses or headsets. for in-car 5G-connected vehicles.
sports streaming video services. •C
 onsumer IoT services: 5G wearable • In-venue digital services: interactive
• Enhanced video: Video on demand revenues and smart home revenues, entertainment in-venue, such as the
services in 4K/8K and new formats. based on the portion of data usage ability to access multiple camera
• Music: consumer spend for digital which can be directly allocated to 5G angles, on-board view/experience,
music services delivered over 5G. as opposed to fixed broadband. real-time statistics etc.
Based on the portion of data usage • Advanced digital services: futuristic
which can be directly allocated to 5G Adjacent digital services revenues: internet of senses scenarios that are
as opposed to Wi-Fi. Revenues described as “adjacent” very nascent; 3D holographic, future
• Gaming: consumer spend on mobile because they are nascent or peripheral interactive movies and haptic internet
games which are downloaded and to communications service providers. and gaming.
played on a 5G device. •D igital advertising: advertising • M-commerce: Consumer revenues
• Cloud gaming: share of consumer spend for static and moving images generated through payments for
spend for cloud gaming streaming displayed on a screen delivered on physical goods and services which will
services delivered over 5G. the 5G network. run over 5G networks.
3 Ericsson  |  Harnessing the 5G consumer potential

Key findings

Harnessing the 5G potential will require fostering

innovation and collaboration to accelerate and extend
5G deployment and its benefits to consumers.

1. The consumer market already generates a high share of 4. Service providers can directly generate USD 131 billion
wireless service revenues for service providers and will by 2030 from digital service revenues by proactively
continue to grow in importance with 5G. developing and marketing 5G use cases. Key opportunities
lie with enhanced video, advertising, in-car connectivity and
2. Service providers will provide the 5G technology platform extended reality.
that underpins nearly USD 31 trillion in cumulative
consumer revenues for the ICT industry by 2030. Service 5. By being proactive in driving 5G differentiation, service
providers could clinch a cumulative USD 3.7 trillion of these providers could gain a 34 percent higher 5G ARPU by 2030,
5G-enabled consumer revenues by 2030. growing their consumer revenues at a CAGR1 of 2.7 percent up
to 2030 as opposed to flat revenues with a passive approach.
3. The pandemic has impacted consumer willingness to pay
a 20 percent 5G premium, reducing it by half; however,
1 in 3 early adopters globally are still willing to pay a
20 percent premium.

The importance of the consumer Figure 1: Global service provider revenue by type (2017 and 2019)
market for service providers
Consumer services including mobile, fixed
2019
voice, broadband, TV and video services
already accounted for an average of Consumer fixed voice
56 percent of revenues for service
providers globally in 2019; a 2 percentage Consumer mobile voice
point rise in 2 years. The remainder
2017
comprises of business and enterprise Consumer fixed broadband
segments. Gains in operators’ total
Consumer mobile data
revenue share were driven by mobile data
services and, to a lesser extent, by fixed TV and video
broadband, TV and video. In the mobile
market, the consumer business generated Other (incl. enterprise/business revenues)
79 percent of overall mobile broadband
revenues for service providers and this is
expected to increase to 81 percent by 2024,
driven by the impact of 5G. While much
attention has been placed on enterprise
verticals by mobile operators seeking new
revenues that leverage the advanced
network characteristics of 5G, the consumer
market will still generate the majority of
core mobile revenues for service providers.
The success of 5G in the consumer market
will be crucial for service providers,
underpinning the network expansion to
enable them to also target new use cases
for industries and enterprises.
1
CAGR is the compound annual growth rate in the revenue during a specified period
4 Ericsson  |  Harnessing the 5G consumer potential

5G promises to enable a diverse set of use cases

5G and consumer adoption 5G supports diverse consumer use cases

The first commercial network launched Ericsson ConsumerLab research in The digital services referenced in this
in South Korea in April 2019. By the end May 20196 uncovered over 30 use report which will be enhanced by 5G
of the second quarter of 2020, 73 service cases relevant for 5G, which promises can be broadly classified as:
providers had fully launched 5G and were to enhance the experience of existing • Core digital services: enhanced
offering consumer services which had consumer digital services, and also offer video (4K, 8K and formats like
attracted over 80 million subscribers. new and more advanced services. There 360-degree video), live sports
By September 2020, GSA reported over will be opportunities for revenue uplift streaming, music, gaming
100 commercial 5G networks.2 Some as service providers position 5G as a (mobile and cloud), augmented
markets have seen rapid adoption as premium service, leveraging enhanced and virtual reality (AR/VR) and
service providers launched a range of speeds, reliability and lower latency to consumer IoT services. These
attractive tariffs bundled with innovative create specialized services and innovative are described as “core” because
services, with South Korea exceeding tariff structures. Other opportunities will they are either established as
13.2 percent penetration of the mobile arise for proactive service providers who consumer services already offered
market with 9.25 million subscribers would be willing to tap into the consumer by service providers, or present
moving to 5G.3 With attractive bundling revenues that 5G will enable more broadly clear opportunities for 5G service
of services, Chinese service providers sold through bundling a range of digital providers to operate as providers
over 100 million 5G tariffs by the end of services or use cases over a 5G data plan. of their own services or sales
the second quarter of 2020, though only channels for services from
64 million 5G phones are reported as third-party providers.
shipped.4 By the end of 2020 we expect to • Adjacent digital services: Digital
see over 190 million 5G subscriptions.5 advertising, in-car entertainment
As a result, 5G adoption is far more and connectivity, in-venue digital
rapid than previous generations, and is services, and advanced digital
likely to break the 20 percent level for services (such as the internet
share of mobile subscriptions 2 years of senses) which will bring new
faster than 4G. senses online. These are described
as “adjacent” because they are
either very nascent or peripheral
Figure 2: 5G adoption rate compared to previous generations to service providers.
• M-commerce: consumer
3G 4G 5G
revenues generated through
Share of global mobile subscriptions (%)

payments for physical goods

60% and services which will
run over 5G networks. This
opportunity has been difficult
40% for service providers to tap into
but presents a huge market
opportunity if they can carve out
20% a role in this value chain.

0
1 2 3 4 5 6 7 8 9 10
Years

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

2
Global mobile Supplier Association 5
Ericsson Mobility Report (June 2020)
3
According to MSIT, the Korean ICT department (September 2020) 6 
www.ericsson.com/en/reports-and-papers/consumerlab/reports/
4
According to CAICT 5g-consumer-potential
5 Ericsson  |  Harnessing the 5G consumer potential

5G could help arrest mobile

revenue stagnation

The transition to 5G could enable service providers to reverse the

trend of stagnating and declining consumer mobile revenues only if
they take a proactive approach.

Regulatory and competitive pressures As shown in Figure 3, total 5G ARPU Early adopters and first-to-market
have contributed to the long-term trend for using proactive strategies could be up to premium pricing from service providers
stagnating or declining cellular revenues 34 percent higher at USD 9.61 in 2030. inflated 5G ARPU in 2019. The pandemic
and mobile ARPU. As the number of unique Core digital services would directly in 2020 has impacted service providers‘
users grows, ARPU continues to fall, contribute USD 0.21 per user per month ability to charge a 5G premium. However,
with the drop in voice and SMS revenues to this in the proactive scenario. In 5G ARPU subsequently will recover ground,
outpacing growth in mobile data revenues. North America, ARPU from connectivity as the COVID-19 impact lessens and
Taking a proactive approach, by exploring and core digital services will be boosted service providers roll out added 5G-related
and bundling relevant core and adjacent by USD 8.87 (32 percent) in a proactive services, that open new revenue streams
consumer digital services running on the strategy, while in Western Europe the and help upsell 5G to early adopters who
back of mobile data connectivity, offers the additional USD 3.43 in revenue equates to are willing to pay a premium.
best opportunities for service providers to an extra 27 percent in 5G ARPU. Globally,
reverse this decline. more unproven “adjacent digital services”
A passive approach, which is based on revenues come from expanding into areas 5G with a proactive approach
only offering commoditized voice and data outside of core digital services and have delivers 34 percent higher 5G
risks, will miss out on significant revenues. the potential to additionally uplift the ARPU when compared to a passive
global monthly 5G ARPU by another approach by 2030.
USD 0.22 in 2030.

Figure 3: Global blended monthly mobile ARPU (USD) non 5G vs. 5G passive and proactive approach forecast, 2019–2030

Non-5G (3G/4G) 5G proactive 5G passive

16

14

12

10

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis
6 Ericsson  |  Harnessing the 5G consumer potential

5G is an opportunity to gain
a competitive advantage

The movement to 5G presents an opportunity for service providers

to strengthen their position in the consumer market.

Launching new-generation technology Figure 4: Percentage of first movers gaining market share
early and building out quality coverage
has resulted in a sustainable advantage 5G
for service providers in the 3G/4G era.
While many markets have seen 5G 4G
launches occur simultaneously,
in 16 markets where there was a
first-mover period, 50 percent of 3G
first-mover service providers have 0% 10% 20% 30% 40% 50% 60%
already shown indications of market
Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis
share gains.
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. For example, LG U+ in
South Korea, despite its smaller market
share in comparison to KT and SKT,
has had a better development in gross
subscriber additions and a more positive
year on year mobile service revenue
development when compared to its
peers since 5G launch.7
For a long period Telstra has been the
market leader in Australia, and technology
leadership in particular has been a key
pillar of its strategy. The period leading up
to the end of 2018 was one of significant
competitive intensity, with all operators
making aggressive plays for market share.
Despite this, Telstra has continued to
leverage a network leadership strategy,
now carried through into 5G, that has had
the effect of driving its market share to in
excess of 50 percent again.

5G is key to service provider competitiveness in the consumer market

7
Source: Service Provider Financial Reports and www.opensignal.com/reports/2020/06/southkorea/mobile-network-experience-5g
7 Ericsson  |  Harnessing the 5G consumer potential

The pandemic and the

5G consumer demand

Will COVID-19 have an impact on the

progress of 5G and consumer adoption rates?

Consumer awareness around 5G has seen reduction in 5G premium is comparatively

10%
an increase, with 20 percent more users less. This premium erosion could be
now aware of 5G promises when compared short-lived, as 45 percent of respondents
to a previous ConsumerLab survey in across the markets surveyed expect their
May 2019. However, the pandemic has household income to improve over the
caused economic and financial impact on next 12 months. Consumers have valued
consumers’ lives, raising questions and access to resilient connectivity during the COVID-19 has reduced 5G premium
doubts over the timeline for adoption of 5G. pandemic; on average one-third say they to 10 percent but 1 in 3 early adopter
Half of the consumers in the recent will continue to spend more on mobile consumers are still willing to pay a
survey claim their financial situation has broadband connectivity over the next 20 percent premium for a 5G plan.
been impacted by the pandemic. As a 12 months.
result it is expected that consumers will be Across the 17 markets in our survey,
cautious around spending more on 5G plans. 25 percent of consumers say they are likely including video on-demand streaming
In May 2019 consumers were willing to to upgrade to a 5G smartphone. Among subscriptions, high-fidelity music and live
pay on average a 20 percent premium these, 16 percent had not planned to but sport streaming services. More time spent at
for a 5G plan bundled with at least are now considering upgrading. About home during the pandemic has resulted in
three digital services of their choice. half of those who plan to purchase a 5G increased interest in investing in emerging
Due to the pandemic this premium smartphone in the US, Australia, Sweden 5G-enhanced digital services, such as cloud
has been eroded, with consumers on and Switzerland are existing iPhone owners gaming, immersive education (like digital
average willing to pay 10 percent more for looking to upgrade to iPhone 5G models. AR books for kids) or services that offer
their 5G plan. However, one-third of 5G remote digital live event experiences.
early adopters with greater awareness of Consumer spending on digital services Will service providers be able to translate
5G promises are willing to pay a 20 percent The survey suggests that on average this consumer interest in, and demand for,
premium. In certain markets, like the US, one-third of those considering taking up 5G 5G and relevant digital services into actual
South Korea, Australia and Finland, the will continue to spend on core digital services revenues for themselves?

Figure 5: Consumer willingness to upgrade to a 5G device over a 12-month period

60%

Kingdom of In the US, 38 million existing

50% Saudi Arabia smartphone users claim they
% of consumers planning to upgrade

Qatar
United Arab Emirates
will upgrade to the new 5G
40% iPhone over the next 6 months.
to a 5G smartphone

China Finland
30%
United Total Romania
States South Korea
Australia France Ireland
20%
Italy
Germany
Sweden United Kingdom
Switzerland
10% Belgium
Share of consumers willing to pay more for
a 5G smartphone, despite the pandemic
0

3–6 months 6–12 months

Source: Ericsson ConsumerLab, Harnessing the Consumer Potential Study (November 2020)
Base: Smartphone users aged 15–69 in Australia, Belgium, China, France, Finland, Germany, Ireland,
Italy, Romania, South Korea, Sweden, Switzerland, the UK, the US, the UAE, Qatar and KSA
8 Ericsson  |  Harnessing the 5G consumer potential

5G consumer
revenue opportunity

Service providers have an opportunity to capture a sizable share

of consumer revenues which will be transacted over 5G networks.

Service providers will provide the 5G Service providers have the opportunity In the 3G and 4G era the lead use cases
network platform that underpins nearly to tap into more of this ICT revenue of mobile web and video were already
USD 8 trillion in annual consumer revenues flow by pursuing a proactive strategy established while with 5G, the killer use
flowing through to ICT industry. This is for each service segment. A proactive cases are still being explored. Proactive
nearly nine times the combined 2019 strategy will maximize connectivity service providers could play a more
annual revenues of five big technology revenues by embracing innovation in assertive role in the industry value chain
players, Amazon, Facebook, Apple, Google mobile broadband tariffs and supporting innovating and curating digital services
and Microsoft,8 and around eight times alternative connectivity solutions such as independently or together with ecosystem
the total mobile revenues for the telecom 5G fixed wireless access (FWA). Core and players rather than waiting for other
industry.9 The cumulative consumer adjacent digital revenues will help uplift players to come in and grab a bigger share
revenues flowing over the 5G networks revenues as service providers develop of consumer spending. Service providers
over the coming decade will amount to and market digital services by working should not make the same mistakes as
USD 31 trillion. with ecosystem players and developers to seen in the 4G era.
bundle services into their offerings.

Service providers will provide the 5G

technology platform that underpins
nearly USD 31 trillion in cumulative
consumer revenues flowing through
to the ICT industry by 2030.

Figure 6: Global total 5G-enabled consumer revenues addressable market for ICT industry (USD trillion)

M-commerce Adjacent digital services Core digital services Connectivity (incl. voice and SMS)

6
USD 31 trillion cumulative
revenues for ICT players
USD trillion

5
over the decade

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

8
https://www.visualcapitalist.com/how-big-tech-makes-their-billions-2020/
9
https://www.gsma.com/mobileeconomy/wp-content/uploads/2020/03/GSMA_MobileEconomy2020_Global.pdf
9 Ericsson  |  Harnessing the 5G consumer potential

The trillion-dollar opportunity

for service providers

Of the USD 31 trillion addressable consumer market potential, service

providers could earn a cumulative 5G revenue of USD 3.7 trillion by
2030 and an opportunity to grow this share even further.

This will amount to cumulative strategy. 5G mobile connectivity and

revenues of USD 3.7 trillion by 2030 or digital service revenues will reach
USD 712 billion annually. Connectivity USD 659 billion and an additional
accounts for most of those revenues, but USD 53 billion can be generated by
digital services will uplift connectivity delivering FWA to homes through the
revenues with service bundling, 5G network. Thus, a total forecast annual
encouraging consumers to upgrade revenue opportunity of USD 712 billion
to higher tariff tiers. By 2030 almost in 5G-enabled consumer revenues is
6 billion 5G subscribers are likely to spend possible – only if service providers are
on average USD 9.61 per month with proactive with their strategies for the
service providers pursuing a proactive 5G consumer market.

Figure 7: Global, total service provider share of 5G-enabled consumer services revenues

Annual

Cumulative

USD 3.7tr
Service providers could clinch a cumulative
USD 15bn
USD 3.7 trillion in 5G-enabled consumer
2020
revenues by 2030.

USD 14bn

2025 USD 324bn USD 890bn

2030
USD 712bn USD 3,738bn

Digital services will uplift connectivity revenues

10 Ericsson  |  Harnessing the 5G consumer potential

Pricing innovation to capture

the connectivity opportunity

A combination of attractive pricing models and service providers’ promotion

of innovative services could help to facilitate growth in connectivity revenues.

Service providers own the connectivity service providers will also leverage
market and will see their revenues pricing innovation and bundling of core Proactive service providers gain a
transitioning to 5G, as mobile subscribers and adjacent digital services on 5G 30 percent increase in 5G mobile
migrate to the new network. 5G will data plans to encourage consumers to connectivity revenues by bundling
provide capacity to handle growing data pay a premium for 5G enhanced mobile relevant use cases, exploring new
traffic, as well as present opportunities broadband connectivity thus boosting revenue segments and innovative
for service providers to improve their enhanced mobile broadband connectivity pricing models.
consumer business. By 2025, 30 percent revenues by at least 30 percent from
of wireless connections will use 5G, rising USD 461 billion to USD 598 billion in
to 65 percent by 2030. A combination of 2030. There is already some degree of
attractive pricing and service providers’ rethinking around pricing strategies,
efforts to educate and make consumers evident in launches to date, with six clear
aware of innovative digital services will pricing strategies being pursued as shown
help to facilitate the transition. Proactive in Figure 9.

Figure 8: Impact on service provider approach on enhanced mobile broadband (eMBB) consumer revenues

Adjacent digital service revenues Core digital services revenues 5G FWA revenues

Additional eMBB revenue when proactive eMBB revenues when passive Voice and SMS

800

700

600

500
USD billion

400

300

200

100

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis
11 Ericsson  |  Harnessing the 5G consumer potential

Figure 9: Diversity of 5G pricing models

Pricing Description No. of service

model providers
(Q2 2020)
Nothing new for 5G The service providers who made no changes to their 4G tariffs when launching 5G. 16
Data tiers only Tariffs with set amounts of inclusive data but no 5G rich apps bundled. 24
Incremental fee An additional fee is charged to activate access to the 5G network, usually around 5
USD 5–10. Some service providers have delayed fee implementation
due to low network availability or COVID-19.
Speed tiers Only offers different speed levels (usually with unlimited data) 6
but does not bundle 5G rich apps.
Hybrid Combines more than one pricing model (data tiers, speed tiers, 5
do nothing, incremental fee) but does not bundle 5G rich apps.
5G rich plans Plans are bundled with a service that are optimized for 5G networks – 3D AR 17
shopping, VR cloud gaming, enhanced audio and video. These plans are bundled
with other pricing elements (e.g. speed, data, incremental fee). For example, if a telco
offers Speed Tiers and mobile gaming for 5G, it is categorized here.

Service providers need to rethink pricing Bundling in this way will help service the UK with cloud gaming, as well as O2,
models to put content and service benefits providers to differentiate services and in the UK, offering a 5G plan bundled with
at the center of the 5G price plan. There avoid becoming commoditized data pipes. Oculus Go and subscription to the Melody
is an opportunity to drive ARPU uplift In addition to the 5G offerings of service VR service, offering consumers the chance
by pricing for speed, and other network providers in South Korea, mainland China to watch live music events in VR.
characteristics like latency in the long run, and Hong Kong, this strategy has been
but digital services centric pricing models pursued by 17 service providers launching
offer the best opportunities to create 5G to date. This includes, for example, 5G FWA subscriptions to approach
5G differentiation. Vodafone in Italy, Germany, Spain and 130 million with annual revenues of
USD 53 billion

Figure 10: 5G FWA revenues (USD million)

Middle East and Africa Western Europe North Asia Pacific North America

Eastern Europe Rest of Asia Pacific Latin America

60,000

50,000
USD million

40,000

30,000

20,000

10,000

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

FWA an alternative to the limited competition in revenues by 2030, with Asia Pacific and
Fixed wireless subscriptions will also see fixed broadband markets that persists in Europe accounting for 19 percent each.
expansion as the enhanced speeds and lower population density areas. As a result As of September 2020 around 37 service
network capacity make 5G a more viable by 2030 we expect 5G FWA subscriptions providers had launched full FWA services,
wireless alternative to fixed-line networks to approach 130 million with annual though many more are conducting trials and
for more users. Service providers in the US revenues of USD 53 billion. North America moving to tap into the attractive additional
have made it clear they will deploy FWA as will account for 40 percent of fixed wireless 5G home broadband revenue opportunity.
12 Ericsson  |  Harnessing the 5G consumer potential

The value of 5G use cases

Proactive service providers could earn a total cumulative

USD 131 billion in direct revenues from 5G-enabled
digital services/use cases over the decade.

Of these direct revenues, over 40 percent ecosystem players, and whether hard or Enhanced video and live
are expected to be generated by enhanced soft bundling is used. Such an approach sports streaming
video and immersive video formats such delivers additional benefits, such as 5G networks will allow for seamless
as AR, VR and cloud gaming streaming improving user acquisition retention and uninterrupted streaming of
services. These revenues are generated and ARPU. high-quality video content such as UHD,
from charging consumers for digital Service providers can also become 4K, 8K with high frame rates and new
services bundled over a 5G plan or via service creators, developing and offering formats. We refer to such formats as
revenue sharing arrangements with third their own brand services. This strategy has enhanced video services which include
parties. However, service providers can act underpinned significant moves by service all non-sport genre paid OTT video, and
more proactively to maximize their share providers in South Korea, Japan and other AI-based video content and premium
of this revenue that their network enables, Asian markets. Another example is AT&T’s esports streaming. This accounts for
by working as a service creator or enabler acquisition of Time Warner to create a 30 percent of the USD 131 billion total
for the core digital services and tapping vertically integrated business owning both direct digital services generated for
into the new opportunities of adjacent content and distribution. service providers between 2019 and
digital services. Apart from direct revenues from 2030. On the other hand, streaming of
Functioning as service enablers, service digital services, the real value of use live sports will account for 2 percent
providers take a cut of third-party services cases is in boosting the 5G enhanced of digital service revenues for service
by bundling services and managing the mobile broadband connectivity revenues providers. With broadcast integrated
billing relationship. The profitability of that arise from the combination of into 5G, sports will offer opportunities
the model varies, mainly depending on bundling digital services, and using these for serving many subscribers with lower
how service providers engage with the to upsell 5G data plans at a premium. demands on the network. For example,
EE customers in the UK are already
innovating with sports streaming apps
such as BT Sports by offering a more
personalized and immersive match day
experience for sports fans.10
Figure 11: Global service provider share of cumulative 5G-enabled
digital consumer services revenues by type (2019–2030)

Enhanced video Consumer IoT

Total: USD 39.2bn, Share: 29.9%, CAGR: 90% Total: USD 5.2bn, Share: 3.9%, CAGR: 62%

Augmented and virtual reality Music

Total: USD 8.6bn, Share: 6.7%, CAGR: 80% Total: USD 6.7bn, Share: 5.1%, CAGR: 56%
Cloud gaming In-venue digital services

USD 131bn Total: USD 6.9bn, Share: 5.3%, CAGR: 62%

In-car entertainment and connectivity

Total: USD 3.4bn, Share: 2.6%, CAGR: 145%

Live sports streaming

Total: USD 19.1bn, Share: 14.6%, CAGR: 152% Total: USD 2.6bn, Share: 2.0%, CAGR: 113%

Digital advertising Mobile gaming

Total: USD 23.8bn, Share: 18.2%, CAGR: 30% Total: USD 2.4bn, Share: 1.9%, CAGR: 28%

M-commerce Advanced digital services (internet of senses)

Total: USD 12.7bn, Share: 9.7%, CAGR: 77% Total: USD 0.12bn, Share: 0.1%, CAGR: 162%

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

10
https://www.mirror.co.uk/tech/ee-launches-match-day-experience-22851009
 13 Ericsson  |  Harnessing the 5G consumer potential

Figure 12: Global service provider share of 5G-enabled immersive media revenues forecast

Advanced digital services In-venue digital services Cloud gaming Virtual reality Augmented reality
(internet of senses)

4.5

4.0

3.5

3.0
USD billion

2.5

2.0

1.5

1.0

0.5

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

XR as the new video over 5G Sixty-seven percent of gamers also

Extended reality (XR) is an umbrella term claim they will increase their AR usage By 2030, AR alone is likely to
used to describe immersive technologies in the next five years. It is clear AR is generate half of all immersive
such as augmented reality, virtual reality poised to make its mark on society, and media revenues for service providers.
and mixed reality, meaning that nearly all media consumption is going to be a key
forms of technologically supplemented component of immersive experiences
reality fall under the XR umbrella. AR on the augmented road ahead.
use cases alone are likely to generate Service providers in South Korea, has already released its lightweight
good consumer interest and half of China, Taiwan, Japan and other markets smartphone-tethered AR glasses with
overall immersive media revenues for are proactive in developing AR- and LG U+ in South Korea.
service providers when compared with VR-based services, while bundling There is an incentive for service
other digital services like cloud gaming, headsets with 5G tariffs to open up this providers to try to find a new product
VR content, in-venue digital services nascent market. Mobile handset-based category beyond smartphones like
and advanced digital services AR services currently in the market, such smartphone-tethered AR glasses to
(internet of senses). as 1010’s Lens service in Hong Kong,12 eventually untethered AR glasses in
ConsumerLab research11 shows that AR Softbank Japan AR Square app13 and the future that they can drive to the
gaming emerges as the highest ranked AR LG U+’s 3D AR shopping, are a sign of the mass market, in order to restart the
application amongst consumers, and that shift for AR to move beyond gaming. AR whole consumer device purchase and
gaming is likely to be the main initial driver glasses are still somewhat developmental re-purchase cycle. If and when that
for AR. Other application areas for AR, such but rapidly improving and will become a happens, a lot of application/digital
as TV and video viewing, home planning and practical user experience over the forecast service revenue streams will potentially
school and educational usage, will follow. period. XR viewer manufacturer Nreal14 also open up for service providers.

11
https://www.ericsson.com/en/reports-and-papers/consumerlab/reports/ready-steady-game
12
https://www.1010-5g.com/en/5g-ar-lens-campaign.html
13
https://static.multi.vsp.mb.softbank.jp/arsquare/index.html
14
https://www.koreatechtoday.com/lg-uplus-nreal-to-launch-5g-powered-ar-glasses-u-real-glass/
14 Ericsson  |  Harnessing the 5G consumer potential

Beyond connectivity and

core digital revenues

5G is likely to unlock new revenues from adjacent

sectors with key opportunities in automotive, digital
advertising and m-commerce segments.

Commerce and advertising here include in-vehicle Wi-Fi hotspots, Internet of senses beyond 2030
M-commerce makes up the bulk of total passenger/driver media and entertainment, Advanced digital services cover a range
revenues as retail moves online and online and consumer-facing car safety/security of services that are in development and
moves onto mobile and 5G. Competition applications. BMW has already announced will bring new senses to media advancing
from established e-commerce players in that the iNext all-electric SUV will be the concept of the internet of senses into
most markets, and the resultant high cost the first vehicle to carry 5G connectivity reality. This includes holographic mobile
of entry, mean that service providers may when it launches in 2021, while General displays and haptic VR controllers and
only take 0.04 percent of m-commerce Motors plans to launch vehicles capable suits. The growth in this area will emerge
revenues but by 2030 that will amount of 5G connectivity for Chinese consumers starting in 2025 and is expected to grow
to USD 2.3 billion of a USD 6.5 trillion beginning in 2022. Recent ConsumerLab rapidly at the end of the forecast period.
5G-enabled market. However, service research16 asked consumers to rank From 2025 onwards, total 5G-enabled
providers can leverage assets such as 16 mobility service concepts which could consumer revenues generated by internet
insight into user identity and behavior, augment their commuting experience. of senses related services will be up from
trust, retail locations and agent networks, The majority showed high interest in USD 41 million to USD 791 million in 2030
along with billing and payment systems, enhanced assisted drive features supported with a CAGR of 63 percent.
to clinch a higher share of revenues from by connectivity in the car, for example
this segment. An example of this is where information is collected from vehicles
SK Telecom’s launch of a 5G phone that is and sensors, regarding hazards beyond
powered by blockchain technology.15 The the horizon.
phone uses blockchain to protect the users’
identity and secure user data for online and Figure 13: Global 5G-enabled adjacent digital services revenue
offline mobile payments and transactions. and service provider market share
Service providers will also take a
2025 2030 Service provider share of revenues
relatively small 2.1 percent (USD 3.7 billion)
stake in the USD 175 billion digital
10 30%
advertising market. While service
providers had drawn limited success in 24.7%
their forays into the advertising business
26.8% 25%
to date, small gains here will translate to
8
significant revenues as 80 percent of digital
advertising will accrue to mobile. Nascent
Service provider share (%)

services, specifically AR, offer opportunities 20%

for service providers to intermediate in 6
USD billion

advertising and m-commerce. These have

already been explored by LG U+‘s “U+ AR 15%
Shopping“ service, which enables users to 2.1% 0.04%
4
transform the content of two popular TV
6.9%
shopping channels into 3D AR experiences. 10%

Connected cars
2
The greatest revenues in the adjacent 5%
category are expected to come from
consumer spend for in-car services.
Service providers’ ownership of connectivity 0 0
will support revenues around USD 8 billion, In-car connectivity Digital
M-commerce
In-venue Advanced
25 percent of a USD 31 billion opportunity and entertainment advertising digital services digital services
in this segment by 2030. Key use cases Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis

15
https://www.sktelecom.com/en/press/press_detail.do?idx=1459
16
https://www.ericsson.com/en/reports-and-papers/consumerlab/reports/augmenting-the-daily-commute
15 Ericsson  |  Harnessing the 5G consumer potential

The upside of a
proactive approach

By embracing a proactive approach service providers

could see a rise in 5G consumer revenues.

5G networks will enable cumulative broadband), total consumer mobile

consumer revenues of nearly service revenues (2G to 5G) see a CAGR Under a passive approach, total
USD 31 trillion by 2030. Service providers of just 0.03 percent from 2019 to 2030, consumer mobile service revenues see
will take a good share of the total and by while a proactive approach generates a a CAGR of just 0.03 percent from 2019
increasing their share even a small amount CAGR of 2.7 percent. By 2030, a proactive to 2030, while a proactive approach
will make significant differences to their approach will lead to additional monthly generates a CAGR of 2.7 percent.
total revenues and profitability. revenues of 34 percent more than a
The proactive approach includes passive approach, equating to an annual
tapping new connectivity segments by revenue increase of USD 219 billion in plans. The core digital services will
offering FWA, exploring new pricing 2030. This USD 219 billion is attributed generate additional direct revenues
models, enabling and bundling third-party to enhancements to mobile broadband of USD 14.4 billion, while adjacent
services or curating services in-house. revenues from tariff uplift due to bundling consumer services generate an additional
In addition, leveraging both local of core or adjacent digital services USD 14.9 billion in 2030. As a result,
and global ecosystems of application and new revenue streams from FWA. 5G mobile broadband ARPU could see
developers and innovative startups can New revenues from FWA generate USD an uplift of USD 2.42 per month, assisting
make optimal use of new network 53 billion in 2030, while USD 137 billion service providers to capture a higher share
features of 5G. of that value comes from the additional of monthly consumer spend.
Under a passive approach, mobile revenue that will accrue as
where service providers just focus innovative services push consumers into
on connectivity (enhanced mobile greater use and towards higher priced

Figure 14: Consumer wireless revenue growth trajectory by type of 5G approach

adopted by service providers Key recommendations:
• Service providers should establish
Passive Proactive high-quality 5G coverage early. Half
of early-mover 5G carriers have
1,000
increased market share already.
• The consumer market is an attractive
900 CAGR 2.7% 5G revenue opportunity for proactive
service providers. Leverage
800 ecosystem partnerships to capture
an even higher share of
USD 31 trillion addressable
700 consumer revenues that will flow
over 5G networks.
USD billion

600 • Service providers should see use

cases/digital services as a way of
differentiating their 5G offering.
500 CAGR 0.03% • 5G connectivity still remains
the biggest revenue driver. The
400 greatest revenue boost will come
from bundling use cases with
300
5G tariffs to be able to convince
consumers of the value of a 5G
network platform.
200
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Harnessing the Consumer Potential Study, November 2020; Ericsson and Omdia analysis
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