SME market a blind spot in 5G offerings and technologies
Communications service providers are neglecting the needs of small and mid-sized enterprises, and the chance to tap into a market worth hundreds of billions in the process. A new report suggests that the providers of services such as 5G are currently devoting 70% of their resources on just 1% of the enterprise market.
According to recent analysis, 5G technology could be a major benefit to both the UK and global economy. Focusing on Britain alone, the upgrade could help the UK economy as it looks to find its feet in the post-Brexit world. With the nation still reeling from the coronavirus and a deep recession, the roll-out of 5G is linked to an estimated to see a boost of £43 billion to gross domestic product by 2030 thanks to the application of the new technology.
The hype surrounding 5G has proven something of a lifeline for communications service providers (CSPs) during the pandemic, with the roll-out of the technology meaning there is still a bright horizon for them, even amid a deep and dark recession. However, a large portion of 5G’s potential could go unrealised by the sector if CSPs continue to neglect small and mid-sized enterprises (SMEs), new research has found. A study by BearingPoint//Beyond, in collaboration with Omdia, has found that SMEs could be a huge source of revenue for CSPs.
At present, CSPs identify large multinational enterprises as the segment that will drive 5G revenues – with 63% asserting that such enterprises “will generate the most 5G-related revenue” for them. However, many of them are likely to be disappointed in this way – as large enterprises surveyed do not regard CSPs as their primary 5G provider. Instead, according to the BearingPoint//Beyond study, only 28% of such organisations would prefer to work with a service provider that is a CSP – fewer than the 31% of large multinational enterprises would even favour cloud service providers to execute their 5G strategies, or the 34% who favour taking a D.I.Y. approach.
Problematically, CSPs are currently focusing 70% of their resources on this numerically small and disinterested market. According to BearingPoint//Beyond, with SMEs representing 99% of the world’s businesses – including a services market estimated to be worth $433 billion by 2025 – the market segment contains vast and untapped potential. Indeed, SMEs are already much more receptive to this kind of work than top-tier firms, and many SMEs already perceive CSPs as their trusted 5G go-to partner – with 42% prioritising them to execute their 5G strategies.
The researchers suggest that this is a sign that CSPs would do well to stop approaching 5G the same way they approached 4G – with a clear focus on consumer and enterprise. However, 5G opens new opportunities for CSPs and one of them is the SME segment. Digitalisation and Covid-19 have transformed the needs of SMEs, and opened their eyes to the need to embrace new technologies such as 5G, IoT, and AI can have on their business to enhance productivity and efficiency, and boost sales.
Angus Ward, CEO, BearingPoint//Beyond, stated, “On average 73% of global SMEs see 5G as important to their business. However, it’s clear that it’s not 5G technology that they’re after, instead SMEs understand that 5G is one part of a broader technology solution that they need. In fact, 93% of SMEs told us that it’s more important for CSPs to collaborate with an ecosystem of partners to build solutions that better fit their needs than to simply provision 5G services.”
