Ericsson Mobility Report Business Review Edition: 5G drives revenue growth

New research from the Ericsson Mobility Report team provides encouraging evidence for communications service providers (CSPs) around the world by identifying a correlation between 5G adoption and revenue growth.

Revenue smoothing has been a challenge for service providers in all parts of the world, who have often impacted network investment decisions as part of their business growth strategies, known in the industry as “monetization.”

A special Ericsson Mobility Report edition – called the Business Review Edition – addresses these monetization opportunities related to 5G.

The report highlights a positive revenue growth trend since early 2020 in the top 20* 5G markets – accounting for approximately 85 percent of all 5G subscriptions worldwide – which correlates with increasing 5G subscription penetration in these markets.

The report finds:

Tiered pricing models are essential for service providers, both to effectively address the individual needs of each customer and to continue to drive revenue growth over the long term. The top 20 5G markets have seen a significant improvement in network performance following the introduction of 5G services. After a period of slow or no growth, wireless service revenue curves are pointing upwards in these leading markets. This is consistent with the growth in 5G subscription penetration.

Fredrik Jejdling, Executive Vice President and Head of Networks, Ericsson, said: “Addressing our customers’ challenges is at the heart of our R&D efforts and every resulting product we develop. The correlation between 5G adoption and revenue growth in the top 20 5G markets underscores that 5G is not only a game changer, but early adopters are benefiting. What is particularly encouraging about this is that while 5G is still in a relatively early stage, it is growing rapidly with proven early use cases and a clear path to medium and long term use cases.”

As expected, Enhanced Mobile Broadband (eMBB) is the key early use case for 5G, driven by increasing geographic coverage and differentiated offerings. There are currently more than one billion active 5G subscriptions on some 230 live commercial networks worldwide. 5G eMBB offers the fastest revenue opportunities for 5G as it is an extension of existing service provider businesses and relies on the same business models and processes. Even in the top 20 5G markets, about 80 percent of consumers have yet to move to 5G plans — a clue to the potential for revenue growth.

As highlighted in the November 2022 Ericsson Mobility Report, Fixed Wireless Access (FWA) is the second largest early 5G use case, particularly in regions with unserved or underserved broadband markets. FWA offers attractive revenue growth potential for CSPs as it largely leverages mobile broadband assets. It is predicted that within six years there will be more than 300 million FWA connections.

In addition to consumer subscribers, there are growing opportunities around the world in enterprise and public sector applications.

5G offers significant value to enterprises, with private 5G networks and wireless wide area networks deployed for business and industrial use.

Upgrading existing 4G sites to 5G has the potential to realize capacity increases of 10 times and reduce energy consumption by more than 30 percent, offering the opportunity to grow revenue and reduce costs while addressing sustainability.

Jejdling adds: “Sales growth and sustainability are recurring themes in my conversations with customers. In this special edition of Ericsson Mobility Report, we examined how service providers are exploiting 5G opportunities. We are seeing the first signs of revenue growth in advanced 5G markets with extensive coverage build-outs and differentiated service offerings. An equally crucial aspect of 5G is that it brings cost benefits and helps service providers address the data growth needed to generate future revenues. This could make 5G the growth catalyst the market has been waiting for.”

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