5G

Forecast for operator service revenues slim compared to 5G-enabled opportunities
Wojciech Bajda, Head of Industry and Society Unit for Region Middle East
Wojciech Bajda, Head of Industry and Society Unit for Region Middle East

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Operators can benefit from an additional  34 per cent revenue from 5G-enabled industry digitalisation market opportunities by 2026, according to findings of Ericsson's latest report. The report is titled “The 5G business potential - Industry digitalisation and the untapped opportunities for operators and it analyses the 5G business opportunity that comes from industrial digitalisation, focusing on eight key global industries. In a media roundtable on 1st May at The Address Marina, Ericsson MENA discussed findings of the report.

The report highlights that the  current average forecast for operator service revenues is expected to increase by 1.5 percent annually from 2016 to 2026 globally. While this offers a steady revenue stream, it is slim when compared to 5G-enabled revenue growth opportunities in industry digitalisation. While operators may still profit from focusing on one of the steps in the value chain, they could achieve much larger growth if they embrace every step. For telecom operators who address industry digitalisation, Ericsson foresees revenue potential of $3.1 billion by 2026 in UAE.

The report shows that manufacturing and energy/utilities sectors represent the biggest opportunity for revenues created or enhanced by 5G. To leverage the power of 5G technologies, operators need to rethink their role and what value to deliver, and what business models to use. Using 5G to solve  the key challenges in digitalisation for industries (such  as manufacturing and automotive for example), operators  can become more than network developers, addressing additional revenue streams by becoming service enablers  or even service creators. 

In 2026, there will be a $582 billion revenue opportunity for telecom operators addressing industry digitalisation with 5G technology; however, of this $582billion, operators' addressable market  as network developer just makes up $193billion, and by becoming service enablers, they can reap $315 billion more. To reap $74 billion more, operators need to create new service models. 

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