With the maturity and stability of 4G, the industry has placed its future growth expectations on 5G, believing that 5G will be a gold mine with huge potential. On October 1st, Verizon took the lead in commercial 5G, marking that operators have officially begun to dig 5G gold mines.

Although the 5G gold mine is attractive, it is not easy for operators. In fact, the complexity of operating 5G is greater than that of 3G and 4G in the past. Because 5G mainly works in the mid-to-high frequency bands, the investment cost has increased significantly, so operators must plan the pace of network construction; and "4G changes life, 5G changes society", after the arrival of 5G, operators need to go deep into all walks of life, so hundreds of Which of the thousands of industries can be explored first, and what application scenarios can they provide?

In order to help operators successfully tap the 5G gold mine, Ericsson recently joined hands with Arthur D. Little to determine the operators' 5G market opportunities from the perspective of use cases, and help operators formulate the most cost-effective and effective network construction and operation plans through the method of clustering and grouping.

Ericsson joins hands with Arthur D. Little to help operators successfully tap 5G gold mines

204 billion-916 billion US dollars in additional revenue

The commercial progress of 5G on a global scale is accelerating. Currently, 154 operators have devoted themselves to 5G, and they plan to conduct 5G commercial use, technology demonstrations, laboratory tests, and field trials in 66 countries.

In terms of geographical distribution, North America, Europe, and Asia are the leaders among them. Among them, in addition to Verizon, AT&T in North America also announced that it will commercialize "mobile" 5G in 12 cities at the end of 2018; T-Mobile plans to commercialize 5G and FWA in the first half of 2019, and start nationwide 5G deployment in 2020; Spint plans to next year In the first half of the year, 5G was commercialized at 2.6GHz (NSA). In Asia, China’s three major operators have formulated plans for official commercial use in 2020; South Korea’s SK Telecom completed the selection of manufacturers by the end of September this year and commercialized 5G by the end of 2018; Japan plans to realize 5G commercial use before the 2020 Tokyo Olympics. In Europe, Vodafone, Swisscom, etc. have also rushed to compete to be the first place in 5G commercial use in Europe.

Major operators are going all-out toward the new era of 5G, mainly because they value the huge business opportunities of 5G. The industry believes that 5G is the engine and new engine of economic growth. Regarding the specific opportunities that 5G can bring, Ericsson’s report "5G Business Opportunities" predicts: benefiting from new 5G technologies, the entire ICT industry will receive 3,458 billion US dollars in digital economic revenue by 2026; 38 of these 3,548 billion US dollars % Is the revenue of 5G-related industries, and the specific figure is US$1307.0 billion; and for operators, it can be allocated US$204 billion to US$619 billion, and the proportion of US$1307.0 billion is 12%-36%.

204 billion-916 billion US dollars is the additional revenue that operators can obtain from the 5G industry's digital market opportunities by 2060.

There is a floating value of US$700 billion from 2040 to 9160. Operators can only get the lower limit of revenue, or whether they can reach the upper limit depends on their position in the value chain, whether they are network developers, service enablers, or services Creator?

There is no doubt that operators need to transform from the role of basic network provider to the upstream of the value chain. This involves the integration with specific vertical industries in the 5G era. So what are operators doing in the new industry and how do they actually land? Experts in the industry believe that 5G investment will increase significantly compared to the 4G era, so how can operators reduce costs and increase efficiency to build networks economically and effectively?

All in all, although gold mines are attractive, how to mine them is still a question mark. Ericsson has recently built a "shovel" for operators through research on use cases.

Use case grouping method to provide "shovel" for mining gold mines

According to Zhang Zhiwei, Chief Marketing Officer of Ericsson Northeast Asia, Ericsson and Arthur D. Little have chosen to determine the 5G market opportunities for operators from the perspective of use cases. In order to maximize the return on investment, Ericsson divides the use cases into different groups. By referring to the use case group, operators can start to explore the opportunities brought by 5G Internet of Things and industrial digitization, determine their own networks and capabilities, and finally grasp the full business potential through experimentation and learning.

It is reported that in order to deeply study the commercial potential of 5G, Ericsson has conducted research on more than 400 use cases in 10 vertical industries. Among these use cases, more than 200 use cases that 5G will play an important role have been identified; 9 Use case groups covering almost 90% of potential 5G business opportunities. These 9 use case groups are real-time automation, enhanced video services, monitoring and tracking, connected vehicles, hazard and maintenance sensing, intelligent monitoring, remote operation, automated robots, Augmented Reality.

Before choosing to implement or respond to a specific use case group, it needs to be re-examined from an industry perspective, that is, which use cases are specifically required for each industry (manufacturing, automotive, retail, public safety, healthcare, etc.). This is The latter step provides a basis for network capability indicators. In this link, operators also need to consider the industrial structure of their domestic market from the perspective of leading industries and income opportunities for different use case groups.

In the next step, Ericsson predicts the future evolution of the use case group. For example, monitoring and tracking are mainly monitoring in the current state, and real-time monitoring occurs when evolving to 5G. The future experience in the 5G era is end-to-end life cycle management. Different evolution stages require different technologies. Ericsson provides the technical requirements for each stage to help operators allocate investment and resources reasonably, set reasonable network capability indicators, and adjust services and models to obtain maximum value.

Of course, all use case groups will face a series of challenges. For example, operators face the challenges of throughput and delay, reliability and availability, local area or wide area network selection in terms of network deployment, and product launches face ecosystem cooperation systems, customer stakeholders, regulations, etc. In terms of complexity, business models also need to be constantly explored. In response to specific challenges, operators can improve and enhance network capabilities based on their current conditions.

With the development of industry digitization, operators are also facing the opportunity of a rapidly growing new revenue pool. For the management, how to grasp this development opportunity is the top priority. In this regard, Ericsson guides operators to grasp industry pain points, establish value propositions, determine investment deployment capabilities, and tap greater opportunity value by setting up questions.

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