Pamela MALLETTE: Welcome back to 15 Minutes with 5G, a bi-weekly discussion with the industries’ big brains about the latest developments in 5G, and what they mean for consumers, businesses, and society at large. Joining us by phone today from Sweden, is Monika Byléhn, 5G Marketing Director at Ericsson and an expert on how 5G will contribute to industry digitalization.
Welcome to 15 minutes with 5G, Monika! Thanks for joining us.
Monika BYLÉHN: Thank you very much for having me.
MALLETTE: We are going to talk today a little bit about the 5G Business Potential report. This is a research Ericsson did with Arthur D. Little. We’ve just come out with the second edition of the report. It’s a top-down study to determine the total available market over the next 10 years for 5G enabled industry digitalization. Monika, can you help us understand what’s in there?
BYLÉHN: Absolutely and as you say, Pam, this is a top-down study. So, it’s looking both at the revenue opportunity for ICT players in general, in addressing industry digitalization with 5G. But also, specifically, at the revenue opportunities for telecom operators in addressing industry digitalization. And we have looked at ten key industries that are all digitalizing and transforming.
MALLETTE: Can you tell me a little bit about what we mean by industry digitalization and why that’s important to operators?
BYLÉHN: Sure. Industries – they are moving towards digitalization to basically get better business outcomes. They do it to increase their revenues, increase demand and basically by beating the competition, but also to decrease costs by increasing productivity and efficiency and to reduce risks. But to your second question then, regarding operators and also, in general, all ICT players, we contribute to industry digitalization by adopting and integrating digital technologies and IoT into a specific industry. And for operators, their current service revenue forecast, the outlook, it’s pretty flat. On a global basis, it’s 1.5% annual growth in the coming 10 years and although it is a steady growth, it’s far from the annual growth figures that we saw a decade ago. So, this study looks then at a new opportunity to capture and address these industry needs.
MALLETTE: That sounds exciting. What do we mean by 5G enabled?
BYLÉHN: So, 5G enabled - to capture what part of these revenues are actually connected to 5G - we looked at more than 500 use cases in these 10 industries. We classified these use cases as:
- 5G independent: use cases where you don’t need 5G;
- 5G enhanced: use cases that you can do without the technologies, but they are enhanced if you use 5G, and
- 5G created: use cases where you need 5G.
But let me give you a few examples of these, of what I mean by use cases and this classification. So, if we look at the healthcare industry, one of the ten that we looked at, you have the use cases remote patient monitoring or connected ambulances. These are use cases that you can do today and they don’t need 5G, so 5G independent. Looking maybe one or two years from now, it will be possible to do augmented reality aiding, medical treatment for instance in a surgery situation or in a more general medical situation to locate the vein for instance. This, I would classify as a 5G enhanced use case. But then, more in a 5G future, 5G created use cases would be ambulance drones or remote robotics surgery.
MALLETTE: Well, that really sounds like a good way to think about those opportunities in the categories. As you said before, the report is about revenue opportunities for operators based on 5G that are really above and beyond the services today, and maybe in the hope that that would help specific industries implement some really futuristic or disruptive technology. So, tell us what the report says that might be a little bit different in the second edition.
BYLÉHN: Exactly, as you say this is the second edition and in the first edition we looked at eight key industries, and in the second one we have added two. So, the industries that we looked at, just let me give you the list, so you know what we are talking about. It is: automotive, energy and utilities, media and entertainment, financial services, public transport, public safety, manufacturing, and healthcare. And now in the second edition, we are adding two industries: agriculture and retail.
MALLETTE: That’s interesting. One of the use cases I would have thought would have been important is retail, but agriculture, that’s an interesting one! I can’t wait to read about that.
BYLÉHN: That’s really good. But let me add that by adding these two industries, we feel that we have a very complete view and idea of the revenue pools and the revenue potential out there. We don’t think that there are some huge or large revenue pools that we are missing, so it’s a fairly complete picture that we can show.
MALLETTE: That’s great. That sounds like there is an opportunity to work with partners across lots of industries, so everyone has a little piece of that opportunity, which is exciting. Speaking of piece of the opportunity: how big is the market for 5G enabled digitalization in these industries and which industries seem to be the best ones to go after from what we can tell so far?
BYLÉHN: So, what we have found is that the revenue - we looked at the ten-year perspective and the revenue opportunity in 2026 for operators addressing these ten industries in the digitalization with 5G is $ 619 billion USD. And the largest industries, where the largest opportunities are for operators, it’s: manufacturing, the second is energy and utilities, and then, closely following each other are: public safety, healthcare, and public transport.
So, those are the largest ones and to analyze the operator addressability, to be able to go in to these industries, we have of course looked at the barriers for entry and the competitive landscapes of these industries. Basically, how easy or hard it would be for an operator to address these industries. So, this is the global picture, of course, as an operator of the local market, you need to consider the local industry landscape. I mean if you have offshored your manufacturing industry, that would not be a top choice, or if you don’t have an automotive OAM [Original Equipment Manufacturer] in your country, perhaps that would not be a top choice. But on a global level, manufacturing and energy utilities are the largest revenue opportunities.
MALLETTE: Well, it does sound like we have really thought through the problem and the report has lots of meat in there that operators can sink their teeth into. So that sounds again, really exciting. What do operators need to do now to capitalize on that opportunities? Is there anything you can tell us about what their role is the value chain? Or how they might, again, get their piece of the pie?
BYLÉHN: Absolutely. So, $619 billion USD in 2026, that’s a huge figure and comparing it to operators’ current service revenue and the forecast of that, it’s a 36% revenue opportunity, than in 2026. But to capture this huge opportunity, operators need then to consider what roles to take in the value chain and probably expand and move up in the value chain to be able to capture these opportunities. They need to consider what industries to address, what use cases to do, what is the business model I want to use and start thinking about proof of concepts, what industry players to partner with, etc. As a matter of fact, if you would like to discuss these findings and all of these things in more details, it is just a matter of scheduling a workshop with Ericsson to have this discussion. Just contact your Ericsson sales representative and schedule a workshop.
MALLETTE: That sounds like that would be a fun day, you know, unpacking more of the details here and understanding what is specifically this opportunity is for a particular operator. So, let’s hope that our listeners take advantage of that. What’s the big takeaway really from the study if you had to summarize?
BYLÉHN: So, very short, there is a huge revenue opportunity to address, this industry digitalization with 5G, and importantly, you need to start now to capture this business.
MALLETTE: Well, Monika, thanks again for your time today.It sounds like, honestly, 5G is coming ready or not and there is a lot to do to get ready, so, let’s hope everyone chooses ‘get ready’. Thanks again, Monika.
BYLÉHN: Thank you very much!
MALLETTE: And thanks everyone for listening. If you would like more information, please visit ericsson.com/5g-northamerica. And if you like what you’ve heard, please subscribe to the podcast. Thanks again for listening.