In their 2017 report 5G business potential, Ericsson and Arthur D. Little predict that 5G will drive 13.6% annual revenue growth for CSPs from 2016 to 2026 for a total opportunity of around $1.6 trillion. This is an optimistic view and many CSPs would be delighted with growth amounting to just a third of that prediction, as the global market for communications services is currently running at around 1.5%. However, the work is useful because it provides a starting point to break down the 5G revenue opportunity and start building businesses cases.
5G use case discussions are framed by three main scenarios:
Sizing the opportunity
The Ericsson report breaks out fixed wireless access (FWA) from eMBB to create a fourth category and combines mMTC and uRLLC for revenue sizing purposes.
To many CSPs this is positive news because they understand the business cases for FWA and improving mobile broadband. Both have a precedent in 4G, which provides a level of certainty for CSPs and their investors. Similarly, the data to build an FWA business case is relatively easy to find, especially for triple- and quad-play operators.
For all other applications, however, there are far more questions than answers, and CSPs have referred to building business cases in quicksand. As the technology lead for one global service provider explains:
“It’s really hard to monetize massive MTC and ultra-reliable and low latency use cases. If operators cannot monetize use cases, they will not invest in this sector.”
The state of play
5G is an increasingly important part of CSPs’ strategic planning. In a 2017 Trend Analysis report 5G: Is platform the killer use case?, no respondents were actively deploying 5G. This was expected as the standards hadn’t been agreed, but less predictable were the 6% of mobile operators that had no plans to deploy 5G. Today that number has fallen to 4%, and nearly 10% of respondents said their companies are actively deploying 5G technology.
Perhaps more meaningfully, 44% of CSPs surveyed intend to launch 5G in within the next two years, but these responses demonstrate that while 5G momentum and expectations are building, it still has a long way to go before it is close to mainstream.