Ericsson sees regional business opportunities worth $54b in 5G

Dubai

The business opportunities for information and communication technology (ICT) players of leveraging fifth-generation (5G) wireless mobile phone technology to digitalise industries is estimated to be $53.6 billion (Dh196.7 billion) by 2026 in the Middle East and North Africa region, an Ericsson executive said on Monday.

Belgin Caglar, Ericsson’s campaigns and demands generation manager for Middle East and Africa, said that there is a huge opportunity for telecom operators who address digitalisation, and foresee a revenue potential of $25 billion in the region by 2026.

So what exactly is 5G?

It is the evolution of 4G with faster speeds of 10Gbps and a latency of one millisecond compared to 100Mbps speed and a latency of 40 milliseconds with 4G.

The 2G technology was for voice and 3G was for data. 4G is a faster version of 3G.

5G will allow users to download an 8GB high-definition movie in six seconds versus seven minutes over 4G or more than an hour on 3G.

Caglar said that using 5G to solve key challenges in digitisation for industries [such as manufacturing and automotive for example], operators can become the network developers, addressing additional revenue streams by becoming service enablers or even service creators.

Caglar said the current average forecast for operator service revenues is expected to increase by 1.5 per cent annually from 2016 to 2026 globally. While it offers a steady revenue stream, it is slim when compared to 5G-enabled revenue growth opportunities of 13.3 per cent annually in industry digitalisation.

In the region, she said, the current operator service revenues are forecast to grow by 2.3 per cent annually during the same period but 5G-enabled revenue growth is expected to be around 14.5 per cent annually.

“5G will bring a new level of performance and characteristics to the telecom networks enabling new services, new ecosystems and new revenue streams. To leverage the power of 5G technologies, telecom operators need to rethink their role and what value to deliver, and what business models to use,” she said.

5G will be a major technology in growing industrial digitalisation, creating and enhancing industry digitalisation use cases such as immersive gaming, autonomous driving, remote robotic surgery and augmented reality support in maintenance and repair situations.

Manufacturing and energy/utility sectors represent the “biggest opportunity” for revenues created or enhanced by 5G.

Rakesh Lakhani, head of network products solutions at Ericsson MEA, said that 5G business models will be diverse and granular to fit very diverse needs and to enable value extraction from both extreme low cost and high-performance use cases.

“Understanding of a new set of customers and value chains is imperative, and operators need to build their strategy on who they want to serve and how. For operators, traditional methods of revenues are slowing, however, the market for industrial digitalisation is only just beginning,” he said.

Caglar said that the fast-paced change in business ecosystems and disruptive technological advances affect vertical industries to different extents. As the world becomes ever digitally and globally connected, industries are experiencing an ICT-driven transformation.