5g business potential from industry digitalization - itu-d · business potential from industry...

Business Potential from Industry Digitalization

ITU Seminar: 5G Implementation in Europe and CIS – Budapest 2-4 July 2018

Silvana Apicella – Southern Europe Network Evolution Lead, Ericsson

2018-06-26 | 5G Business Potential from Industry Digitalization - ITU-D | Commercial in confidence |

SMARTAGRICULTURE

FLEET MANAGEMENT

SMART METER

LOGISTICS

TRACKING

TRAFFIC SAFETY& CONTROL

INDUSTRIAL APPLICATION &

CONTROL

REMOTE TRAINING

REMOTEMANUFACTURING REMOTE

SURGERY

SMARTPHONESHOME

NON-SIM DEVICES

ENTERPRISE

VENUES

MOBILE/WIRELESS/

FIXED

4K/8K UHD

BROADCASTING

VR/AR

Critical MTCMassive MTC

Enhanced Mobile Broadband

Fixed Wireless Access

5G Use Cases

• Very large

# of device

• Very low device

cost/power

• High density

• Wide coverage

• Very low latency

• Very high

reliability and

availability

• Very High Data

Rate

• Very High

Traffic Volumes

• Mobility


Devices /

Local NW

National sitesDistributed sitesAccess sites Global sites

Application cloud

Transport

Management & Monetization

Access, Mobility, Network applicationsMobile

Fixed Cloud infrastructure

Network slices

5G Architecture

NW ENERGY EFFICIENCY

5x

DEVICE COST REDUCTION

Cost

SPECTRAL EFFICIENCY

3x

MOBILE DATA VOLUMES

1000x

END-USER DATA RATES

10-100x

LOWERLATENCY

5x

MOREDEVICES

100x

eMBB FWA mMTC cMTC


With industry digitalization, new fast growing revenue pools emerges

* Digitalization revenues for ICT players from 10 key industriesSource: Ericsson and Arthur D. Little

2016

1.497 1.7361,5%

2026

USDbnCAGR16´-26´

Operator to seize

emerging revenue potential

Challenge: current operator service revenues Opportunity: digitalization revenues*

13,6%

20262016

3.458

968


Network developer: 204

Of the total 5G enabled value in 2026, up to 47% is addressable by operators

Source: Ericsson and Arthur D. Little

38%

Digitalization revenues for ICT players 5G enabled revenues

Operator addressable revenues

47%

3 458 1 307

Service creator: 619

USDbn, 2026

5G enabled digitalization revenues

Digitalisation revenues for ICT players

5G operator addressable revenues

5G enabled digitalization revenues


Operators share of the 5G value created


Note: The total addressable market for operator role Service creator is the total operator addressable market

337

337 79204

204

204Operator addressable market for role Network developer

Operator addressable market for role Service enabler

Operator addressable market for role Service creator

Su

m o

f ad

dre

ssab

le 5

G

rev

en

ue

pe

r op

era

tor ro

le

Total 5G enabled revenue per value chain step

Total 5G enabled revenue

(USDbn, 2026)

89% 52% 18%Operator addressable share

1307 bn

230 bn 646 bn 432 bn

bn

bn

bn

bn

bn bn

bn204

bn541

bn619

Application & service provisioning

Connectivity and Infrastructure Provisioning

Service Enablement


5G revenue potential for operators addressing industry digitalization

USDbn, 2026

1 736

619*415

204

Curr

en

t se

rvic

e r

ev

en

ue

s5

G a

dd

ress

ab

le

B2

B2

X

2026

Service enabler and service creator revenue potential

Network developer revenue potential *Total addressable as Service creator operator role

Adding an addressable

revenue growth potential

36%


Operator opportunity addressing Industry digitalization with 5G

Current & 5G addressable revenues Split per Industry (2026)

113

101

78

76

74

62

48

3029

9

619

USD bn

0

500

1,000

1,500

2,000

2,500

2016 2018 2020 2022 2024 2026

Potential to add 36% growth in

revenies in 2026

>+36%

Ne

w a

dd

ress

ab

le 5

G

en

ab

led

re

ve

nu

es

Cu

rre

nt

op

era

tor

serv

ice

re

ve

nu

es

USD bn



Use Case clusters

Enables shared investments and resource allocation across a larger revenue pool

Increase scalability across industries

Possible to prioritize opportunities depending on investment

Cluster approach

From industries to clusters

From whatto how


32

68

66

51

47

38

53

27

27

2216

Other

77

Augmented reality

Autonomous Robotics

47

Remote operations

19

73

22

3541

14

20

Connected vehicle

Smart Surveillance

24

Hazard and maintenance

sensing

57

69

22

713

Monitoring and tracking

31

Real-time Automation

Enhanced video services

96

101

USDbn, 2026

1 736

619

415

204

Cu

rre

nt

op

era

tor

serv

ice

re

ve

nu

es

5G

en

ab

led

2026

To grow with up to 36% operators can address 9 Use Case clusters


Total addressable as Service creator operator role

X

25

Global market

Service enablement and

service provisioning value

Connectivity and

infrastructure value


Industries and Use Case Clusters


5G Use Case clusters

AutomotiveMedia & Entertainment

Public

transportHealthcare

Financial services

Agriculture RetailEnergy and

utilitiesPublic safety Manufacturing

+200 use cases in 10 industries

Source: Ericsson and Arthur D Little



Real time automation

Smart surveillance

Autonomous robotics

96 73 101 47 35

Hazard and maintenance

sensing

Remote operations

Augmented reality

Connected vehicle

57 24 69 41

Application based cluster methodology

Go-to-market challenges

— Business and monetization

model

— Value chain positioning

— Role in ecosystem

— Partnership development

Deployment challenges

5G— Technical performance criteria

— Role of 5G

— Device, network, computing and

service enablers


Emerging 5G strategies Ambition level steers the ability to capture the value

Go to m

ark

et c

halle

nge

Low

Hig

h

Deployment challengesEasy to deploy Difficult to deploy

Remote operations

Smart SurveillanceAutonomous Robotics

Connected vehicle



Real-time AutomationAugmented reality

Source: Ericsson and Arthur D Little

Hazard and maintenance sensing

Operator opportunity 2026


Use Case deep dive –Structure of the Analysis


Operators in all geographies of the world are embarking on their 5G journey

MarketCluster

North America Europe & Latin America North East Asia Oceania & India

Real time automation

Telefonica-Vivo (Brazil)Smart grid


AT&T (US)Fleet managementsolutions


Telstra (Australia)Connected venues

Hazard and maintenance sensing

Orange (Europe)Remote patient monitoring

China Mob. (China)Condition-based maintenance

Connected vehicle

Verizon (US)Commercial drone solutions

Ericsson (US)Conn. Urban Transport

Telia (Sweden)Connected cars

Case study Source: Ericsson and Arthur D Little


OutputsSteering variables

The Ericsson industry digitalization tool quantifies the 5G cluster opportunity

Key inputs1

Source: Ericsson and Arthur D Little | Note: Other sources used include GDP forecasts, exchange rates, ICT development index … etc.

5G Business tool

Bottom up use case calculations

Top down cluster

calibration

Cluster Region/footprint

Operator role

Currency— +36 industry market

reports

— +400 digitalization use

cases

Main top-down market sizing

Triangula-tionsources

— Proxy business cases

— Market reports sizing use

cases

— ICT company P&L

structure benchmarks

— ADL ICT and industry

expert evaluation

— Selected bottom-up case

study quantification sanity

check

— Industry ICT investment

benchmark

2019 2020 2021 2022 2023 2024 2025 2026

X%

2019 2020 2021 2022 2023 2024 2025 2026

Revenue potential

per cluster

Revenue 2016-2026

Cash flow profileCluster X


Ericsson Studies and Analysis

https://www.ericsson.com/en/networks/trending/insig

hts-and-reports/the-5g-business-potentialhttps://www.ericsson.com/en/5g

https://www.ericsson.com/en/networks/trending/insights-and-reports/the-5g-business-potential

https://www.ericsson.com/en/5g

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