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5G for business:
a 2030 market
compass
Setting a direction for 5G-powered
B2B opportunities
October 2019
2 Ericsson | 5G for business: a 2030 market compass
The telecoms industry is a huge market We have analyzed this opportunity, and this
in itself and it spurs the digitalization report is an attempt to size and segment 03 Introduction
and growth of many other industries. a range of markets that will open up in the
04 5G fuels digital transformation
However, service revenue growth for mobile coming decade. It updates and extends across industries
communication service providers has been our previous research into the 5G business
declining and is close to flat. potential for service providers. We see 06 Industry trends, drivers and
The combination of 5G and it as a useful tool – or compass – for barriers
digitalization creates new opportunities indicating where the market is heading. 10 Navigating the addressable
for service providers to build and extend This study anticipates that by 2030 up market – where in the value
their businesses beyond connectivity, to USD 700 billion of 5G-enabled, chain to play
and presents a way to break the trend of business-to-business value could be
11 Leveraging the power of
a stagnant market. However, even if the addressed by service providers.
use case clusters
rapidly changing 5G-IoT landscape offers But beyond the big numbers and insights
enormous potential, it is complex and not in this report, one thing remains clear when
without its challenges. Deciding on the best I look at the data: the journey to build 5G
way forward requires a comprehensive business for the future starts now. Methodology
understanding of issues surrounding the In 2019, Ericsson, in partnership
addressable markets, the driving forces and Jan Karlsson with Arthur D. Little, has undertaken
barriers for different industries to adopt Senior Vice President and Head of Business an update of the data sets
5G-enabled use cases. Area Digital Services underpinning the 2018 report ‘The
guide to capturing the 5G industry
digitalization business potential’. The
projection has now been extended
to 2030, but the model and logic for
the analysis has remained intact.
The model does not provide a
sales forecast, but an analysis and
aggregation of relevant revenues that,
combined, constitute a maximum total
addressable market. The methodology
applied is a top-down estimation of
what share of the total ICT industry
digitalization revenues is addressable
by service providers.
Use cases from 10 industries and
9 use case clusters have been closely
reviewed across the world’s different
geographical markets. From these
use cases, more than 200 have been
selected for their characteristics of
being 5G-enabled, meaning either
significantly enhanced, or made at all
possible to realize, by introducing 5G
3GPP technology. Use cases fulfilled
by earlier standards or non-3GPP
technologies have thus not qualified.
As a final step, the addressable
revenue potential has been specified
for the different service provider roles
of network developer, service enabler
and service creator.
The combination of 5G and digitalization is creating new opportunities for service providers
3 Ericsson | 5G for business: a 2030 market compass
Introduction
200
100
0
2020 2022 2024 2026 2028 2030
Source: Ericsson and Arthur D. Little
5 Ericsson | 5G for business: a 2030 market compass
Figure 4: Share and growth rate for global total 5G-enabled B2B opportunity for service providers
4% 2%
Retail +76% Agriculture +85%
5%
Public transport +65% 21%
Healthcare +75%
5%
Financial services +76%
USD
700 19%
10% 700bn
USDbn Manufacturing +76%
Media and entertainment +86% in2030
2030
10% 12%
Public safety +78% Energy and utilities +67%
12%
Automotive +71%
Global service creator, 5G for business addressable market, 2030 share, 2020–2030 CAGR
However, it is not possible for all service Different roles face different challenges, of the expected spend across geographies.
providers to pursue all the opportunities as addressing an industry with primarily As illustrated in Figure 5, most opportunities
across these industries. The market data connectivity solutions cannot be directly for service providers over the coming
presented herein should instead provide compared to addressing the same industry decade will be in North-East Asia, Western
an indication of where the value pools through new services and applications to Europe and North America. This is also
are, and be used as a compass for setting capture a larger part of the industry players’ where we currently find the most activities
the direction for strategic planning and spend. This is further discussed later in this being explored.
activities to capture parts of this opportunity report. Another dimension is the distribution
in the coming years.
Looking at this opportunity from an Figure 5: Regional split of the total service provider
industry perspective gives us further insights 5G-enabled B2B opportunity across 10 industries
into the relationship between the different
200
value pools. In Figure 4, the 5G-enabled 178
183
180
opportunity for service providers is split
161
by industry. Even if some of the industries 160 USD bn in 2030
seemingly have larger shares of the revenue 140
potential, it is far from the only thing that
120
matters for service providers when deciding
100
to address a certain industry. Evaluating
factors, including competition, scope and 80
scale effects, as well as risks and expected 60
returns, is key to estimating the business 41 41
40 33 34
potential. In the following pages, these
20 12 17
industries are examined in more detail to
give a better understanding of the driving 0
Africa India Central and Middle Latin South-East Western North-East North
forces and barriers. In addition, the role in Eastern East America Asia Europe Asia America
the value chain that a service provider tries Europe
Industry trends,
drivers and barriers
Healthcare: Significant opportunity increased efficiencies. With the operator 5G to new technologies than other industries.
with historical barriers addressable market expected to be Regulatory boundaries, traditional
Recent research indicates there has been USD 147 billion in 2030, the first 5G infrastructure and risks connected with
a strong digital healthcare evolution with use cases have already successfully been changing suppliers all present challenges to
new digital solutions being realized every implemented in hospitals. In China, an service providers to succeed in this industry.
year. The industry sees an exploding increasing number of medical institutions
Scope
mHealth market and entire healthcare are collaborating with telecom companies Categories
of study
systems that are becoming digitalized and to seek breakthroughs in telemedicine.
connected. Wider adoption of applications Moreover, in a recent global survey, mHealth
based on wearables now coincides 42 percent of healthcare providers claim to
with increasing decentralization in the have firm plans for 5G deployments. But eHealth
industry, in turn driven by a combination balancing this surge, the healthcare industry
Hospitals
of aging populations and demands for has historically been slower at adapting
Manufacturing: Increased caution and workers in a modular and flexible setting. are typically calculated with a 20-year
industrial production demands Other use cases, such as collaborative lifetime, resulting in long investment
The manufacturing industry presents a robots requiring ultra-low latency for safe cycles for machinery and equipment.
significant service provider addressable human-robot collaboration, AR/VR and Consequently, most industrial 5G use cases
5G-enabled market, estimated to be remote operations through digital twins, are will be implemented in existing industrial
USD 132 billion in 2030 with an impressive also anticipated to drive 5G investments. production sites, increasing the complexity
CAGR of 75 percent over 2020–2030. The Still, investments relating to 5G are now considerably.
industry needs to meet the demand from a expected to come later than previously
globally diverse and demanding customer projected. Initiatives such as Industry 4.0 Scope
Categories
base, while managing increasingly complex now frequently focus on optimization to of study
portfolios. This drives the need for running minimize overall production downtime, Factories
flexible production, to accommodate rapid and there is uncertainty as to what
changes to the production environment. technologies and use cases to bet on. As a Mining
5G offers reliable connectivity without result, cables are often still used to achieve
cumbersome and costly cabling, and stable connections, and there is prolonged Utility
enables a factory set-up with two-way use of Wi-Fi for connectivity. Across
communication between machines and manufacturing, investments in fixed assets
7 Ericsson | 5G for business: a 2030 market compass
The automotive industry is anticipating growth in accordance with previous analysis, with connected and autonomous cars the main drivers of technology
Energy and utilities: Growth expected power distribution grid. Many energy and Scope
in power generation, oil and gas utility companies are therefore reluctant Categories
of study
Energy and utilities include power to test new technologies. Nevertheless,
Power generation
generation and the oil and gas industry, high growth is still expected in the power
but smart buildings and smart city generation, oil and gas sectors. The 5G Oil and gas
infrastructure are now excluded from the service provider addressable market is
5G-enabled industry revenue scope. As projected to be USD 86 billion in 2030 Smart buildings
these areas are becoming increasingly following a 76 percent CAGR over
well-defined by themselves, there is an 2020–2030. Use cases such as smart Smart city infrastructure
awareness that their market structure and meters and smart grids are already being
value chain set-up differ significantly. The deployed, but the main drivers for 5G Mining
result of this redefined scope is a more adoption are real-time operations and
Energy traders
moderate projection, further impacted by monitoring of distributed energy resources
concerns over the ability to have a new (e.g. digital twins), as well as enablement of
5G network to deliver reliable and resilient secure and quality services not achievable
bandwidth and mitigate cyber threats to the by other technologies.
Automotive: Connectivity and the internet, and some manufacturers security are still challenges to be overcome
autonomous solid drivers have announced even more aggressive to fully appreciate the value potential. In
The 5G-enabled potential for the plans.One car manufacturer announced this context, it is recognized that 5G could
automotive industry is expected to reach that 90 percent of their cars sold globally enable the low latency and reliability
an addressable market for service and 100 percent of the cars sold in the US required for safe operations.
providers of up to USD 81 billion in 2030, in 2020 will be connected to the internet.
with a high CAGR of 76 percent from 5G-enabled revenues are expected to grow Scope
2020–2030. The industry is anticipating rapidly with a CAGR of 137 percent over Categories
of study
growth in accordance with previous 2020–2026. Meanwhile, autonomous onnected and
C
analysis. Connected and autonomous cars car commercialization has slowed due to automated cars
are the main drivers of technology. Two recent accidents increasing safety concerns.
In-car entertainment
years ago, it was anticipated that all new Moreover, network coverage limitations and
cars sold in 2025 would be connected to concerns related to data privacy and cyber
Public transport’s adjusted scope results in an attenuated operator 5G revenue potential of USD 32 billion by 2030
Media and entertainment: Streaming last two to three years. For conventional Scope
precedes e-sport and interactive events sports and other entertainment such as Categories
of study
The global media and entertainment concerts, 5G can enable streaming of
Gaming
industry for B2B2X has a significant events uninterrupted to a wide audience
operator revenue potential estimated at and leverage virtual reality to enable new Media
USD 73 billion in 2030 with a CAGR of 64 remote participation experiences. In this
percent over 2020–2030. Growth is driven area, some 5G use case pilots are being Advertising
by enhanced entertainment solutions implemented, e.g. Barcelona's stadium was
using VR and AR, especially in e-sports announced to be the world’s first stadium Venues
which demands responsiveness and high with a dedicated 5G network in
resolution. The e-sports market is growing February 2019. In-car entertainment
rapidly, having doubled in size over the
Business-to-consumers
Financial services: Cyber security and such as investing in blockchain-powered times under two seconds. At the same time,
blockchain stable 5G opportunities exchanges between businesses and other the growing concern of cyber security is
The service provider addressable stakeholders. However, the 5G potential forcing the industry to constantly rethink its
5G-enabled financial services market is mainly within cyber security, which technological investments.
is estimated to maintain its previously reduces the speed of digitalization within
expected momentum and reach financial services, as reliability and trust are Scope
Categories
USD 37 billion in 2030. One driver to essential for all transactions. It is becoming of study
monetize 5G is within the advancements a business priority and increasingly vital Banking
of blockchain due to its use in fast and to act upon. This constitutes a key driver
reliable transaction, clearing and settling for 5G-enabled use cases, where security Insurance
processes. The financial sector accounts is of utmost importance. For instance, as
for about 60 percent of total blockchain latency and quick response are critical Securities
market value, with banks collaborating aspects of fraud detection, there have been
with software companies to develop the developments such as an AI-powered Real estate
technology for reliable financial services, fraud detection service with response
Public transport: Mass transit focus covered in the analysis is limited to public Scope
resets the 5G potential transport including mass transit, excluding Categories
of study
Urbanization continues, contributing private mass transit and the broader area
Public mass transit
to congestion and other environmental of transportation solutions within a smart
challenges. The development of public city. This used to include transportation Private mass transit
transport is driven by an increased climate of goods, directly or partly enabled by
focus. One significant growth area is related investments made in smart city mobility Transport of goods
to interactive passenger information, initiatives. The adjusted scope results in an
such as trip planners and smart screens, attenuated operator 5G revenue potential Airports
while another area of use cases includes of USD 32 billion by 2030.
smart ticketing systems. The current scope Ports and marine
9 Ericsson | 5G for business: a 2030 market compass
Retail: Tracking and analytics and asset tracking and analytics. Retail Scope
followed by mixed reality Financial Integration, personalized Categories
of study
In retail, key value drivers for 5G include marketing, social shopping and AI
eCommerce
various mixed reality applications and applications are all envisioned to improve
enhanced delivery services using drones. shopping experience. Retailers have Physical stores
Neither are expected to reach mass also started to actively experiment with
adoption in the early years of 5G but will experience as a powerful tool to win Hospitality
drive revenue growth over the longer and retain customers, e.g. by
perspective to 2030. However, only a few hyper-personalization. The evolution Restaurants
large retail chains may have the means of these use cases is now deemed to be
to implement such use cases on a large less dependent on 5G technology, thus Travel agencies
scale, thus limiting the market potential. A contributing to a lesser degree to the 2030
wider driver for digitalization is customer revenue potential of USD 28 billion.
Figure 6: Significant potential for operators to expand into the service enablement layer
383
USD bn
in 2030
232
85
Connectivity and
Application and service
infrastructure Service enablement
provisioning
provisioning
Roles in the value chain SIM cards). The addressable market of industries will also address the connectivity
Service providers will address the the network developer role, addressing part. Therefore, the service enabler role also
opportunities that 5G provides across connectivity and infrastructure provisioning, includes the opportunities provided by the
industries in different ways, or roles. can reach up to USD 232 billion globally. network developer role, and the combined
They may do this differently per industry The Service Enabler role shows the addressable market can reach up to
or opportunity and the role descriptions biggest growth opportunity for service USD 615 billion globally.
indicate where in the value chain providers and includes providing digital The Service Creator role encompasses
opportunities reside. Below we describe the platforms on which businesses can configure the creation of new digital services
key traits of each role and the additional and integrate value-enhancing digital and collaborates beyond telecoms
opportunity they address. capabilities into their processes. Included to establish digital value systems, in
The Network Developer role focuses in the assessment of this role are service addition to providing digital platforms and
on implementing and operating network platforms, system integration and content infrastructure services. It includes service
infrastructure, including access, core and management. Sitting between connectivity provisioning, service delivery and
transport, and applies IT enablers to support and applications, service enablement end-user applications. Addressing this is
consumers and businesses with tailored provides the means to free developers likely a stretch for many service providers,
connectivity solutions that maximize the from needing low-level data structure but for certain use cases and industries it
power of digitalization. Service providers information, for the more traditional OSS may still be an opportunity to address, even
will likely see this as critical to success, as it and BSS APIs and also for the emerging if the competition from other ICT players will
is very close to their current core business. Massive IoT APIs. There is a real opportunity be fiercer. The combined opportunity for all
Here we find things like providing the for service providers to use their OSS/BSS three value chain roles is expected to reach
network infrastructure, network operations to extend their reach far beyond traditional USD 700 billion annually by 2030.
and maintenance, as well as provisioning offerings. It is likely that any service provider
of connectivity services (e.g. providing that addresses the enablement part for
11 Ericsson | 5G for business: a 2030 market compass
Figure 7: 5G-enabled industry digitalization addressable opportunity (telco global service creator role)
Significant Explorative
Enhanced video
Real-time automation
Connected vehicle
Autonomous robotics
Remote ops
Smart surveillance
AR
The matrix outlines the global relative ways of mitigating risks must be assessed
addressable revenue potential for the service together, and the way forward is often to Learn more
creator role. Enhanced video services emerge focus on a single or limited set of use case As 5G becomes increasingly integral
as the greatest opportunity, standing at up to clusters. This way, there is a high proportion to industrial businesses, there is a clear
17 percent of the total value and equating to up of reuse towards other vertical segments, rise in service provider opportunities for
to USD 118 billion by 2030. Significant value is and realistic synergies are more new 5G-enabled revenues. To capture
also offered by real-time automation, at up to likely achieved. a share of the 5G business potential,
USD 107 billion, and connected vehicles at up Applying a lens of clusters instills the service providers need to consider what
to USD 89 billion. focus needed to move forward and capture role in the value chain to take, what
However, the size of the revenue a part of the revenue potential. Start your industry or use case cluster to address,
potential is just one key indicator of what journey now, to capture the value of 5G as well as getting the right go-to-market
to address to achieve growth in the 5G for beyond mobile broadband tomorrow. models and organizational adaptation in
business domain. As outlined in the previous place. To learn more, please contact your
sections, the mix of drivers and barriers vary Ericsson representative or visit
across industries. The revenue potential and ericsson.com/5g/5g-for-business
Ericsson enables communications service providers
to capture the full value of connectivity. The company’s
portfolio spans Networks, Digital Services, Managed
Services, and Emerging Business and is designed to
help our customers go digital, increase efficiency and
find new revenue streams. Ericsson’s investments in
innovation have delivered the benefits of telephony
and mobile broadband to billions of people around
the world. The Ericsson stock is listed on Nasdaq
Stockholm and on Nasdaq New York.
www.ericsson.com