Early 5G Birds will Get the Worm, According to Ericsson ConsumerLab

Ericsson ConsumerLab reported that telcos that will become the 5G pacesetters, will be more likely to retain customers and grow ARPU more than the telcos that come after them.

Ericsson ConsumerLab Reflects on 5G Early Market Capture

According to the 5G Pacesetters Report by Ericsson ConsumerLab, the "5G pacesetters", will be 3 times more likely to retain customers, and twice as likely to grow ARPU than the CSPs that come after them.

Ericsson ConsumerLab said that it compiled the report after "assessing the 5G maturity and market revenue strategies of 73 CSPs across 22 markets". In the report, Ericsson ConsumerLab managed to identify four stages of 5G maturity.

First, 5G Explorers; CSPs just starting to explore 5G. Second, 5G Potentials; CSPs with satisfied consumers due to better performing 4G networks but have not invested much on evolving 5G network and offerings. Third, 5G Aspirationals; CSPs perceived as market challengers aiming high with 5G. And last, 5G Pacesetters; who are more advanced in setting the pace on delivering 5G but still have room to improve.

Ericsson ConsumerLab defined 5G Pacesetters as CSPs that are 5G market leaders in their respective markets, and are offering at least 3 5G services. These might include cloud gaming, immersive video (AR/VR), and 5G fixed wireless access (FWA). While advanced 5G markets in North-East Asia and North America account for the largest share of CSPs in the 5G Pacesetter category, one-third are in Europe.

Erik Ekudden, CTO, Ericsson, said, "5G Pacesetters seek new ways of challenging industry conventions to make 5G connectivity more relevant to people, business, and society".

Adding to this, Jasmeet Singh Sethi, Head of ConsumerLab, Ericsson Research, said, “5G-enabled consumer services can unlock up to $3.7 trillion in cumulative revenue opportunities for CSPs by 2030. By exploring new 5G-enabled opportunities, more CSPs can become 5G pacesetters and grow their revenues at the same rate.”

5G Pacesetters - What Do They Gain?

Ericsson ConsumerLab presented a number of key insights regarding the performance and future outlook for the CSPs.

A telco's most important performance metric still remains its ARPU or the Average Revenue Per User. As such, Ericsson ConsumerLab report noted that half of the 5G Pacesetters increased their ARPU by 1% or more Y-o-Y. What's more, 75% of all 5G Pacesetters are offering tiered 5G services to their customers. These tiers are based on speed, quality of service, fixed-mobile convergence (FMC), or bundled content.

5G pacesetters have 70% of their subscribers believing they are the market leaders. Moreover, the Pacesetters cover 75% of the total population, offer average download speeds of 270 Mbps, and average 5G availability of 14% or above.

In terms of technology, half of the pacesetters have already launched 5G FWA; all of them are implementing 5G SA and MEC capabilities.

The India Context

5G trials are underway in India as of now. Therefore, according to Ericsson's 5G maturity levels, the Indian CSPs are at 5G Potentials. With what we have seen so far in the 5G trials, the future looks promising. Reliance Jio has already tested its VoNR; Bharti Airtel and Vodafone Idea have been diversifying their 5G use case portfolio.

However, given the uncertainty around the 5G spectrum, the actual commercial rollout might come as late as 2023. Therefore, any insights that come up from commercial 5G networks worldwide would prove crucial. Indian telcos can look at their global counterparts and take inspiration, or insight.