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Traditional service provider revenue sources are slowing. But significant revenue potential exists as consumers and enterprises embrace digital and global connectivity that powers enterprise, B2B and B2B2X digital services. 

Despite high growth in mobile subscriptions and data traffic, overall mobile service revenue has flattened. This revenue stream is small relative to 5G-enabled revenue growth opportunities in industry digitalization. Digital technologies such as 5G, virtualization, network slicing, Internet of Things (IoT), and cloud provide supporting infrastructure for a wide range of new digital services. The market for adopting and integrating digital technologies into specific industries is just beginning.

How to capture digital services opportunities

Digital transformation is driving innovation in services, as well as business and revenue models. Service providers don’t always know how to best prepare but continuing with the traditional “hard-coded” approach that requires substantial redevelopment for service changes is not an option. To catch the digitalization wave, service providers need to combine a digital operating model with an IT platform to gain: 

  • The ability to quickly onboard new ecosystem partners and create new services and offerings
  • A flexible monetization engine that supports any business and revenue models, with any transaction volume or size
  • Superior analytics to understand and extract value from the massive amount of IoT data generated and processed
  • Data security and integrity across a distributed cloud

5G-enabled industry digitalization

Ericsson, in its “The 5G business potential” report, has identified a major opportunity for telecom operators that address industry digitalization, and foresees a revenue potential of USD 582 billion by 2026. In fact, operators can benefit from 34 percent additional revenue from 5G-enabled market opportunities by 2026.

Capturing this market potential requires business development, changing go-to-market models and organizational adaptation. To leverage the power of 5G technologies, operators need to rethink how to deliver value and determine what business models are sustainable.

IoT and technologies such as Gigabit LTE, network slicing and distributed cloud are enabling new services and revenue streams as the journey to 5G begins. 5G will enable industry digitalization use cases like autonomous driving, remote robotic surgery and augmented reality support for maintenance and repair situations. The largest opportunities are expected to be in the energy and utilities industry, closely followed by the manufacturing and public safety sectors. 

Three high-level use case scenarios and applications that service providers should evaluate include: 

  • High volume, low latency. Massive machine-type communications require connectivity for millions of devices, typically transmitting a relatively low volume of non-delay-sensitive data (low bandwidth and not latency-critical) via low-cost devices with extended battery life. Examples are utility meter-reading and agricultural sensors.
  • Real-time, reliable. Critical machine-type communications for ultra-reliable, resilient, instantaneous connectivity, with stringent requirements for throughput, latency and availability, such as required by autonomous car and eHealth.
  • Enhanced mobile broadband. Mass mobile connectivity to support increasing demand for mobile broadband, such as high definition video and Facebook Live videos.

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