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Ericsson (ERIC) Sees Global 5G Consumer Market at $31T by 2030

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According to the latest Harnessing the 5G Consumer Potential report from Ericsson (ERIC - Free Report) , the worldwide 5G consumer market is expected to be worth $31 trillion by 2030. 5G, which has become a household name, is poised to drive massive opportunities for communications service providers (CSPs) in consumer business over the decade.

Ericsson, in collaboration with Omdia (a global technology research powerhouse), has undertaken this study to find out the 5G consumer revenue opportunity for CSPs until 2030. Ericsson Consumer & IndustryLab provides world-class research and insights for innovation and sustainable business development.

This is the first time that Ericsson has come out with revenue forecast for the 5G consumer market, which remains the core business of CSPs. In May 2019, Ericsson ConsumerLab issued a report that assessed consumer interest across more than 30 use cases and their willingness to pay for them.

The latest report builds on those insights through business forecasts for service providers and the broader Information and Communications Technology industry. The consumer market already generates a high share of wireless service revenues for service providers and will continue to grow with 5G. The report estimates that service providers could secure a cumulative $3.7 trillion of 5G-enabled consumer revenues by 2030.

Furthermore, it says that they can directly generate $131 billion in revenues by 2030 from digital services by developing and marketing 5G use cases. Almost 40% of these revenue projections are attributed to consumer spending on enhanced video, augmented and virtual reality and cloud gaming over 5G networks.

The report includes the impact of the COVID-19 pandemic on consumers’ personal finances and their willingness to pay a premium for 5G subscriptions. In early 2019, the average consumer was willing to pay a 20% premium for 5G. As 2020 comes to an end, that figure has declined to 10%.

Nevertheless, one in three early adopters globally is still willing to pay a 20% premium, which should help drive economic recovery. By being proactive in driving 5G differentiation, service providers can potentially gain 34% higher 5G average revenue per user by 2030.

Ericsson is confident in delivering on the 2020 Group target. Investments in research and development have established it as a leader in 5G. The company currently has 70 live 5G networks in 36 countries and 116 commercial 5G agreements with operators. The Sweden-based telecom equipment provider is positive on the long-term outlook.

Ericsson has a long-term (three to five years) earnings growth expectation of 28.9% compared with 14% of the industry. The stock has gained 32.3% compared with the industry’s growth of 34.4% in the past year.

Ericsson currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Plantronics, Inc. , United States Cellular Corporation (USM - Free Report) and NIC Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.

U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.

NIC delivered a trailing four-quarter positive earnings surprise of 27.5%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.

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