5G a huge greenfield market for communications service providers

27 May 2020 Consultancy.eu

The advent of 5G is likely to change the remit of communications service providers, according to a report from BearingPoint//Beyond and Omdia. With 5G's roll-out, businesses seek more than just a connectivity partner. 

The report by the European consultancy and market research firm demonstrates what many experts across the globe have been highlighting since discussions around 5G intensified. Businesses view 5G as the means to significant digital transformation, and are looking to strategise their adoption and implementation of the new technology.

Where communications service providers (CSPs) traditionally limited their offerings to connectivity solutions, the call is now for these companies to use their knowledge of the new technology to partner with businesses and help develop a technology integration strategy.

This not only can help CSPs unlock opportunities, it also will help them remain relevant in a changing and growingly competitive landscape, said Angus Ward, chief executive of BearingPoint//Beyond, a subsidiary of BearingPoint“What’s deeply concerning is that some of the early 5G deals, such as the ones we see in automotive, cut out CSPs entirely – even connectivity is being provided by other suppliers.”

5G expectations are high

On the reasons for this, Ward said, “Businesses want to buy complete solutions that fit their needs and help them solve business problems, rather than individual technology assets.”

And analysis of 5G deals – only one in five early enterprise 5G deals are CSP-led – shows that “the way CSPs want to sell is at odds with the way in which businesses want to buy,” said Ward.

CSPs that succeed in developing business-specific and industry specific solutions, will be able to join a “multi-billion-dollar opportunity”, but, “CSPs need to address this fast” and it will require them to collaborate with enterprises and small and medium businesses to better understand their competitive edge and position in the value chain.

5G’s promise

The report by BearingPoint//Beyond and Omdia outlines how 5G is breaking the pattern when it comes to tech adoption. Traditionally, high costs and risk aversion create a degree of inertia vis-à-vis new technology in the business environment, but not with 5G. With just a year into the introduction of 5G having passed, more than 70% of businesses now believe in its potential to drive growth.

5G is seen as a B2B opportunity

Perceived benefits include boosts in productivity, smoother transitions to automated technology, better customer experience and a general enhancement of products and services. Given the holistic role businesses have in mind for 5G, it is according to the researchers no surprise that they look beyond CSPs for their implementation needs.

CSPs will need to up their game to capitalise on the opportunity, and the authors report that most are aware of this. Nearly 75% of all CSPs acknowledge that the main 5G opportunity lies in a business-to-business solutions offering, although many are being caught unprepared.

Due to their traditional role as retailers for connectivity options, “CSPs are still unable to offer tailor-made services in a timely, cost-effective, and scalable manner. Communications service providers may be bypassed by other ICT suppliers in a 5G world,” write the authors.

Value attributable to 5G by industry

So speed is of the essence for CSPs. In addition, “CSPs will only be able to realise value from 5G if they can identify, partner, codevelop, implement, and run a proposition with application-specific and industry-specific specialists,” said Evan Kirchheimer, a Research Vice President at Omdia.

The manufacturing and industrial sectors are expected to see the largest windfall in economic value added from 5G, with the segment forecasted to see some $4.5 trillion in value added. While other sectors lag far behind, industries such as information and communications, wholesale, retail, public services and construction also have significant applications for 5G.


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