Enterprises take time to embrace new technologies, but 5G appears to have captured their attention at an early stage.
Even though 5G was only introduced to the market for the first time in April 2019, 36% of enterprises already believe 5G networks will be transformational, according to the Omdia ICT Enterprise Insights 2019/20 survey.
Though 5G for enterprises is at an embryonic stage, the potential of 5G is
substantial: businesses expect the technology to lead to productivity gains, enable automation, reshape customer experience, and facilitate product enhancements.
The B2B Impact
72.8 percent of telcos believe that most 5G revenues will be derived from B2B, B2B2C, or government and smart city opportunities. The overriding them here is that “don’t think 5G first, think business first”.
Communication service providers (CSPs) will only realize value from 5G if they can identify, partner, co-develop, implement and run a proposition with application-specific and industry specific specialists.
The New Reality
In other words, the CSPs will need to adapt to a new reality of solving problems and being applications first and ecosystem-centrist. As an enabler of business solutions, 5G’s value will be realized through industry specific
processes, supply chains, partnerships, and applications.
Globally, the economic value of 5G will account for $13.2tn, or 5% of global output. Omdia’s Enterprise 5G Innovation has revealed that in this early stage of 5G development, manufacturing, transport, utilities and energy/mining account for nearly 80% of enterprise deals. As illustrated in the previous chapter, CSPs are not necessarily taking a central role in this deal-making.
The Challenges
Going into 2020, the challenge for CSPs will be to turn 5G into a tool to enhance employee’s efficiency. Relevant use cases and vertical solutions will be important in realizing these opportunities, but most of these 5G-boosted tools will only be co-created and delivered in partnerships.
When it comes to the Internet of Things, CSPs tend to focus too much on connectivity while also insisting they own the value chain. It is therefore imperative that they do not repeat the same mistakes in 5G. An ecosystem of partners is crucial to deliver the full value of 5G connectivity.
The Key To Success
Acting fast is key. A prime example is Deutsche Telekom, for example, has signed a strategic partnership with Ericsson to deploy its enterprise solutions into German industrial companies, with vendors such as Bosch Rexroth or Siemens in multi-sided partnerships.
On the vendor side, Ericsson is pursuing a strategy of marketing to enterprises through a partner channel including both CSPs and key industrial service providers such as Ambra Solutions of Canada. Nokia, for example, has global strategic agreements with Microsoft Azure to cross-promote Nokia’s private 5G and SD-WAN products. CSPs like Verizon and Vodafone are founding partners for Amazon’s Web Services Wavelength edge computing product too.
A New Model Emerges
Ukkoverkot of Finland specializes in designing, building, and operating private LTE and 5G networks for industrial and government customers. These include ports, airports, and the Finnish Defence Forces as well as Kone Cranes, port-automation vendor Kalmar, and Swedish mining equipment maker Sandvik. The increasing availability of local-use spectrum for enterprises around the world is likely to create more opportunities for players like this, as a new focus on close partnerships with the enterprise themselves.
In short, to take full advantage of the opportunity 5G presents, CSPs need to make a cultural shift. By 2022, 5G will be expected to reach viable functional maturity and enterprise will not be waiting. Ultimately, as they always say, fortune favors the bold.
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First published on: Asia Blockchain Review
