Addressing the 2020 GTI Summit virtually, Ekholm said that the killer 5G app will not be evident until the infrastructure is in place. “We do know that the killer app will be clear once the infrastructure has been built out and that will create multiples of value compared to the infrastructure itself.”
Ekholm pointed out that during the 4G era, many tried to identify the killer app, but no one could envisage that transportation would be arranged through ride-hailing apps, food and clothes ordered through mobile and movies downloaded and played from the palm of your hand. Ekholm said that it will be the same with 5G. As large-scale construction begins and operations mature, the killer app of the 5G era will soon emerge and transform the world.
Next three years critical to 5G landscape
Ekholm said the next three years will be critical in determining the make-up of the 5G landscape. Ericsson research shows that operators who took the lead in launching 4G technology and 4G networks were able to outlast and out-perform those who arrived late to the game.
By analyzing 4G lifecycle data across more than 30 countries, Ericsson discovered that high-quality network leaders consistently delivered both higher output and lower churn. With 5G, quality mobile connectivity will become even more important, as this technological transition will serve as a breakthrough opportunity for service providers to move ahead.
190 million 5G subscribers expected in 2020
The latest Ericsson Mobility Report forecasts 190 million 5G subscribers by the end of 2020, with numbers increasing to 2.8 billion by the end of 2025. This will make 5G the fastest scaling technology ever. It also forecasts 160 million fixed wireless access (FWA) connections by the end of 2025, accounting for approximately 25 percent of all traffic.
Another Ericsson study found that most consumers are willing to pay a 20 percent price premium for 5G, but this is dependent on two factors. First, an enhanced consumer experience, in which the differences between 4G and 5G are clear and noticeable. Secondly, new and unique 5G use cases that are bundled with 5G subscriptions.
Ekholm also said that industry digitization will generate an estimated USD 700 billion market opportunity for service providers by 2030, equivalent to approximately 35 percent of current industry revenue. Moreover, Ericsson found that 70 percent of enterprises are seeking to engage with a non-telecoms service provider, while a third already consider communications service providers as an important partner in their digitization efforts.
The opportunity of private networks
Ekholm highlighted that service providers need to expand beyond traditional mobile network services to capture 5G-enabled revenue. He said that the evolution of cellular IoT and private networks is crucial in establishing momentum for 5G-enabled businesses. Ericsson has established partnerships with multiple tier one operators, such as Telstra, Deutsche Telekom and Telefónica, to provide dedicated cellular connectivity solutions to their customers.
In China, Ericsson is a partner of the top three service providers and is actively working with each to explore 5G applications in different industries. In 2019, Ericsson signed an agreement with China Mobile and Shaoguan Steel Group in Guangdong to jointly build a 5G smart mill and explore 5G industrialization. Ericsson also deployed its Ericsson Dedicated Networks platform to connect more than 10,000sq m, in cooperation with China Mobile.
Ericsson’s factory in Nanjing is one of the most advanced manufacturing facilities of the group and in the world. It has integrated cellular IoT, Industry 4.0 and AI tools into most of its production, setting a leading example for smart manufacturing.
Ekholm said Ericsson is proud to have such a long history in China, one that dates back more than 120 years.
Ekholm says: “Imagine the potential here in the China market, with its hundreds of millions of 5G subscribers. We, at Ericsson, are delivering the right technology to build better 5G, not just for today but also tomorrow.”