CSPs recognise potential of 5G enterprise partnerships

20 July 2021 Consultancy.uk 3 min. read
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Communications service providers recognise the need for a multi-technology, omni-partner, solution-oriented approach for 5G enterprise – but there is still work to be done. According to a new study, the number of 5G projects led by communications providers fell by 5 percentage points over the last year.

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. In the UK alone, 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 – and according to new research, CSPs are finally taking notice of that potential.

According to analysis by BearingPoint and Omdia, the number of 5G projects currently being undertaken to develop new projects making the most of 5G’s capacity has boomed in the last year. Since the launch of local-use spectrum in Germany and the US, there has been a surge of testing and trials activity as a wide range of enterprises, CSPs, technology vendors, and others flocked to access free radio spectrum. This had already picked up by 2020, however in the last year it has doubled again as more countries open up local-use spectrum.

No. of 5G projects in the market 2020 vs. 2021 comparison

But while CSPs are undoubtedly more convinced of the opportunities, they seem less committed to leading projects than before. Only 16% of the projects currently in play are CSP led – down from 21% in 2020. While CSPs understand the opportunity for providing private networks and 5G solutions to the enterprise, they are still slow to act on it – with the analysts suggesting this is because of internal issues, and a continuing focus on “consumer first” as most CSP’s 5G strategy.

If CSPs do not shift from this position, there is a chance they could forfeit significant market share to alternative service providers (ASPs). The fastest-growing 5G provider model, jumping from 7% to 27%, ASPs are often local or specialist players, whose main business is delivering private networks to local enterprises and whose strength resides in quickly adapting and shifting resources to target new opportunities. Without a broader “consumer first” approach, ASPs can adapt to what particular customers need.

Value attributable to 5G by industry

The 5G enterprise game is far from over though. The researchers also found that CSPs are well positioned to use partnerships to offer new services to enterprise. The paper added that CSPs are working “to build 5G enterprise propositions and bringing partners together to create and validate new solutions,” with Orange, Vodafone, Verizon, Telia, Telefónica, and TIM are a few examples of CSPs to have formed 5G labs.

These partnerships could help CSPs to tap into some of the most lucrative markets for 5G enterprise. For example, manufacturing could see a value attributable of $4.6 billion for CSPs. An example of how this is already being tapped by CSPs is with video-based quality control in Asian manufacturing. The application needs high uplink performances which cannot be delivered by competing technologies, so enterprise 5G has been deployed by a partnership of Huawei, China Mobile, and Haier.