Significant changes will occur in our world over the next five years. Consider how far we’ve come in the previous five years, with the creation of highly efficient and powerful batteries, the growing popularity of electric vehicles, the acceptance of new digital ways of interacting, and society’s total digitization. These innovations and developments provide new opportunities for exploration and business.
Looking at the patterns of 5G, we can see that it is gaining traction faster than 4G, which was launched over a decade ago. This is due in part to the abundance of 5G-enabled smartphones on the market. According to our Ericsson Mobility Report from November 2021, we expect 4.4 billion 5G subscriptions by the end of 2027, accounting for over half of all mobile subscriptions worldwide.
We believe that there will be over 660 million 5G subscriptions by the end of this year. Beyond the incremental implementation of nationwide 5G coverage, one current priority area for service providers is to demonstrate and promote the value of 5G to consumers, persuading them to upgrade to 5G devices and 5G data plans. Major service providers in leading 5G regions, such as China and South Korea, are now reporting a positive impact of 5G in terms of boosting ARPU and overall service revenue, which is encouraging.
Capacity, performance, and efficiency are three key characteristics of 5G, all of which help businesses develop and cut costs. Service providers’ mobile networks are seeing an annual traffic increase of more than 50%, and having an efficient and high-performing delivery system is critical to meeting the growing demands. Furthermore, 5G networks give up to 20x faster speeds than 4G networks, guaranteeing that customers get the best experience possible from the new technology.
While the majority of early adopters are pleased with 5G network performance, over 70% are dissatisfied with the level of innovation given by existing 5G plans. More apps and services that add value to their lives are desired by 5G users. The strong demand for mobile services is a good feature of high customer expectations. Of course, meeting these expectations in such a competitive and dynamic environment is a problem. The only way to remain relevant is to act, starting to explore the new possibilities and services associated with 5G.
Service providers must take a proactive strategy to capture the promised 30% revenue growth between 2020 and 2030, focusing not just on network development but also on service innovation and value creation. True digital transformation necessitates the involvement of creative partners, as well as the adoption of new business models and ways of working. It entails working with the broader ecosystem to provide consumer-friendly services in sectors such as gaming, sports, immersive media, education, and communications.
Many 5G services are already in the works, taking use of 5G’s improved performance and capacity. Mobile gaming and Fixed Wireless Access (FWA) are two early 5G use cases that will benefit greatly from the new, upgraded network capabilities.
Gaming now accounts for 26% of all mobile media consumption hours, indicating a lucrative revenue possibility for service providers in the near future. Exciting new use cases like augmented, virtual, and extended reality (AR, VR, XR) will open the doors to new audiences in the long run. According to Ericsson’s survey, 35% of non-gamers are interested in AR gaming. Gaming provides service providers with new potential for service bundling, revenue development, and, not least, increasing the relevance of mobile connectivity in the 5G era.
Consumers can acquire a broadband connection to their home via Fixed Wireless Access, which is a cost-effective, handy, and competitive alternative to fibre. Almost every service provider that has launched 5G has also offered an FWA service. Over 800 million individuals will have broadband access by 2027, thanks to 5G, and to 230 million FWA connections.
Following gaming and FWA, additional exploratory services are anticipated to emerge, which will take more time and effort to build. Consumers will be able to enjoy completely new experiences thanks to the combination of enhanced network capabilities and new device form factors, as well as innovative services that will make our daily lives easier and more fascinating. Ericsson welcomes industry stakeholders to help bring new ideas to life through engagements like Startup 5G and Ericsson D-15:
The launch of the 100th Ericsson-powered 5G network is a significant achievement for our company and the teams responsible for pushing the boundaries of mobile network performance and service development. We’ve been doing this for 140 years and have no intention of stopping anytime soon.
