Revenue fell, expenses rose at AT&T
Through actions and words, Ericsson (ERIC) is showing network operators that their future is bright with 5G (fifth-generation) technology. Many network operators around the world are already struggling with tough competition and rising expenses eating into their profits. Ericsson has tried to portray 5G as the potential answer to their struggles.
At AT&T (T), for instance, revenue fell more than 2.0% in 2017, while expenses rose ~0.14% in the year. Verizon (VZ) performed better in terms of its revenue and expenses. Its revenue jumped ~0.5% in 2017, while its expenses fell ~2.3% in the year.
Autonomous driving expanding the market for telecom operators
For carriers struggling to grow revenue, Ericsson sees 5G enabling a $619 billion revenue opportunity in the telecom (telecommunications) sector by 2026. The arrival of 5G is expected to open up new revenue streams for telecom operators in the IoT (Internet of Things) space.
The adoption of home automation systems such as the Amazon (AMZN) Echo smart speaker and the deployment of autonomous vehicles are expected to fuel the expansion of the IoT-installed base and subsequently increase demand for telecom services. Uber, Ford Motor Company (F), and Alphabet’s (GOOGL) Waymo are some of the companies developing autonomous driving systems.
Digitization of industries
Manufacturing, logistics, and energy companies are digitizing their operations to cut costs and lower power consumption. These efforts are creating more demand for telecom services—demand that can be met with the 5G network.