• New Ericsson ConsumerLab report shows 'Pacesetters' twice as likely to grow revenue that their rivals… 
• … and three times more likely to retain subscribers whilst growing ARPU
• Pacesetters offer at least three 5G services including cloud gaming, AR and VR and 5G fixed wireless access.
• 5G Pacesetters may not have the biggest market share or be incumbent CSPs

A new report from Ericsson ConsumerLab (“The Voice of the Consumer”), claims to be the first and only study to incorporate a consumer perspective when shedding light on the four stages of 5G maturity and to uncover what sets the most successful service providers apart from the rest of the players in the market. “5G Pacesetters” says CSPs falling under that top heading are twice as likely to grow revenue than their rivals. 

The report identifies four stages of 5G maturity and in so doing will be reminiscent, to many readers of a certain age, of the “Four Stages of the Life Cycle of the Frog” that, once-upon-a-time, was taught in “nature” classes across the English-speaking world. Casting back many decades to drowsy Friday afternoons in a Yorkshire lakeside primary school, I can still remember that first comes the egg, then the tadpole, then the froglet and then the small but perfectly-formed adult frog. And, actually, that early natural history lesson is not a bad analogy for what’s happening with 5G, at least where the consumer is concerned.

Thus, Ericsson identifies “5G Explorers” (those at the start of their 5G journey) “5G Potentials” (those CSPs with satisfied consumers on 4G networks, but that have not yet invested much in 5G), “5G Aspirationals” (CSPs regarded as 5G market challengers aiming high and striving to improve consumer satisfaction) and “5G Pacesetters” (those well-advanced in delivering best in class 5G coverage, performance, and innovation, but also aware that they have room to improve further).

Ericsson ConsumerLab analyses the 5G maturity and differing revenue strategies being followed by 73 CSPs across 22 markets globally based on 105 criteria. Of the four variants, just one-in-five of the CSPs studied are classified as “5G Pacesetters” that will be three times more likely to keep their customers and proactively drive innovation by offering at least three 5G services, including cloud gaming, immersive video via augmented reality (AR) and virtual reality (VR), and 5G fixed wireless access. They will also be twice as likely to grow average revenue per user (ARPU) compared to other CSPs. Interestingly, 5G Pacesetters regarded by consumers to be the market leaders are not necessarily leaders where market share is concerned, nor incumbents in their local markets. Unsurprisingly, the already (in parts) advanced 5G markets of North-East Asia and North America are home to most 5G Pacesetters, but 33 per cent are in Europe. 

In greater detail then, 5G Pacesetters are perceived by 70 per cent of their customers already to be leaders in their field. They are three times more likely to hang on to their customers, with 50 percent more customers expecting to upgrade compared to other CSPs. The result of 5G Pacesetter proactivity and innovation is increased revenues -- threy are twice as likely to grow ARPU by at least one per cent year-on-year compared to other service providers. Furthermore, 75 per cent of 5G Pacesetters monetise 5G through tiers of speed, quality of service, (QoS), fixed mobile convergence and/or inclusive content.

Pacesetter CSPs also provide 5G coverage to 75 per cent of their populations and download speeds of 270 Mbps, while half of the category have already launched 5G fixed wireless access. They are also the most proactive in implementing 5G standalone and multi-access edge computing (MEC) capabilities.

They all share a common commitment to network quality, technology leadership, and service innovation and follow six common strategies for success. These are to achieve cost-efficiency and scale with 5G, to deliver the best smartphone experience with first rate 5G coverage and performance and to extend fixed mobile and convergence plans with 5G. Next comes using 5G to complement and expand fixed broadband footprint, the reimagining of pricing strategy by introducing and upselling premium value tiers, and last, but by no means least, leading with innovative and immersive 5G services.

Other strategies include building extensive coverage, and communicating milestones reached and improving 5G marketing to gain and maintain perception leadership. Also important to attract and retain consumers is extending coverage indoors and improving speed, seeking to offer 5G convergent offerings and – very important this – providing home broadband on 5G.

Jasmeet Singh Sethi, Head of ConsumerLab, Ericsson Research, says: “5G-enabled consumer services can unlock up to US$3.7 trillion in cumulative revenue opportunities for communications service providers by 2030. This report outlines that 5G pacesetters who can demonstrate an ability to adopt new technologies, influence consumer perception and are prepared to invest and focus on 5G service innovation, are already stepping ahead of competitors in the race to new revenue opportunities. By exploring new 5G-enabed opportunities, more CSPs can become 5G pacesetters and grow their revenues at the same rate.”

The generalisations are interesting as far as they go, but what are conspicuous by their absence are the names of the CSPs that fall into each of the Ericsson’s ConsumerLab four categories, That’s what people, comprising the industry and consumers, would really like to know, and it’s what you don’t get from the report. What we do learn is the index for judging membership of each category runs from 1 to 100 points and that of the 73 CSPs covered in the analysis (including the 1 in 5 that are classified as Pacemakers) the top score is 62, which means that even the best still have a lot to do to get to the top of the greasy pole. And as we all know simply by living our daily lives, it is not possible for everyone and all companies to be Pacesetters: If we were, everyone would win every race simultaneously.

The report does namecheck 10 CSPs that are cited as “inspiration,” but get no more mention or any meaningful identification, so we don’t know the category they currently inhabit. The 10 are: Deutsche Telekom; EE/BT Sport; Elisa (of Finland); FET (Taiwan); Singtel; SK Telecom; Swisscom; Telstra; T-Mobile US; and Verizon. Slice and dice them as you will.