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Mobile operators 'risk missing out' on enterprise 5G

(Image credit: Google)

Mobile operators hoping to profit from enterprise demand for 5G-enabled business applications are doomed to fail unless they work with industrial partners and the wider ecosystem, a new study has claimed.

Although 5G networks will allow operators to offer enhanced communications to consumers and reduce operating costs, the real value is believed to be in enterprise services.

Unlike previous generations of mobile connectivity, the ultrafast speeds, superior capacity and ultra-low latency of 5G means mission-critical applications can be powered by cellular technology for the first time. In an era where traditional sources of revenue, such as voice, are falling, it is critical that operators manage to snare some of this emerging market.

5G enterprises

Research from Omida, commissioned by Bearing Point/Beyond, says operators and businesses are united in their belief that 5G can transform operations and open new revenue opportunities.

Manufacturing, logistics, transport, utilities and the public sector have been identified as sectors that stand the most to gain from 5G in the short-term,  with the disruption caused by Covid-19 likely to accelerate adoption as organisations seek to minimise risk in the future.

However the report has found evidence that telcos are missing out on major contracts because they are focusing solely on the connectivity element of 5G projects rather than working with industries to identify business problems and vertical services.

Nearly three quarters of communications service providers (CSPs) believe most of their 5G revenue will come from enterprise use cases. However in two fifths of all 5G deals signed, CSPs are a secondary supplier and only a fifth of projects are being led by CSPs.

Omida cites Deutsche Telekom, Verizon and Telefonica as examples of major operators that have formed industrial partnerships in order to ensure they are privy to the planning stage of major projects.

“CSPs will only realize value from 5G if they can identify, partner, codevelop, implement, and run a proposition with application-specific and industry-specific specialists,” says Evan Kirchheimer, Research Vice President, Service Provider & Communications, Omdia. 

“CSPs that can orchestrate such a complex web of relationships will be capable of capturing a greater share of the market and will not be relegated to being one of many connectivity providers competing solely on price.”