A glimpse into the monetization of new 5G consumer applications
5G is the next big thing, in fact, it’s already here, with deals being announced all the time and commercial networks being launched almost weekly. Ericsson already has 20 publicly announced 5G contracts with 8 live 5G networks, in the US, Switzerland, UAE and South Korea. The 5G era is here and every industry is thinking about how to leverage the many benefits it will bring to the table.
To understand these benefits, Ericsson ConsumerLab recently conducted robust research, based on 35,000 consumer interviews, focus group discussions and over 20 expert interviews with executives from the telecom industry and AR/VR companies. The results were published last month in a paper called 5G consumer potential. My favorite take-away from the report is the 5G consumer use cases roadmap, where we can start to picture how 5G will transform different industries and what kind of use cases will arrive first.
Figure 1: A consumer use case roadmap to 5G. Source: 5G consumer Potential, Ericsson ConsumerLab.
The research shows that consumers are very interested in use cases like autonomous cars, 5G augmented events, VR cloud gaming, 5G smart home services,3D hologram calling and many more, and they believe those will all be mainstream in less than 5 years’ time. Those use cases will quickly add complexity and opportunities to service providers.
Those 5G use cases will require a myriad of connected devices, sensors, cars, fitness trackers, AR/VR sets and many more. Service providers will need to deal with subscriptions including huge numbers of connected things, each with a different need and business model. 5G phones will use gigabits or even terabits of data, connected cars will likely require low latency, sensors and IoT might even have other needs, and all of those might be included in the same package.
That means that service providers will have to evolve their systems to handle millions and millions of connections, while also being flexible in supporting different business models and creating innovative, attractive offers for their customers.
As a sports fan myself, I show just as much excitement on the “diorama” use case as consumers expressed on the research. Diorama is basically a service that allows consumers to watch a game/event as if they had the best sit in the arena. Using an app or AR/VR headsets, one can bring players closer, choose different viewpoints and even get some live stats.
Service providers could then team up with event organizers and offer pay-per-view access to concerts or games, integrating the bill with other services or even bundling it with TV offers, while at the same time providing a network slice to the VR concert package to secure a great experience.
Speaking of VR and AR, headsets will be able to leverage 5G’s capacity and low latency to transfer the processing power to the cloud, making the headsets lighter and more comfortable to use. In this scenario AR/VR headset producers may have agreements with service providers to bring computing power closer to consumers, using low latency and the so-called edge cloud to enhance consumers’ experience with AR/VR.
While service providers have explored business models like selling connectivity to business partners or for business partners, 5G brings many new and exciting opportunities for providers to monetize use cases. Whether it’s supporting new types of devices and new units of measurement, or adapting to new charging models using network slicing, service level agreements and other resource characteristics, the possibilities are vast.
Networks will evolve to offer higher data rates and better spectrum utilization. This evolution will enable many new applications like 4K/8K video streaming or VR and emerging industry 4.0 use cases that require higher bandwidth, lower latency and security. However, the evolution will only be monetized once service providers evolve their BSS systems into an environment that not only supports all those new requirements, but also supports the existing business requirements for 3G, LTE and 4G .
Ericsson is a technology leader when it comes to 5G, and we have leveraged our 5G competence to develop new BSS offerings like the Digital Monetization Platform, which is right now ready to leverage new 5G capabilities.
Read the ConsumerLab report, 5G consumer potential.
Read more about Telecom BSS to explore those discussions further.