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5G and the New Revenue Opportunities Available to CSPs

As the world goes through change that is unprecedented in modern times, the role of the communications industry has rarely been so well appreciated. Whether helping families stay connected across the globe or enabling businesses to change to a world of remote work, all of this is underpinned by the availability of affordable, high quality connectivity.

As we adapt to this new world, there is one thing that is clear: evolutions in network technology are providing communications service providers (CSPs) with a raft of ways to create new revenue. But it’s also a truism that nothing good comes without a price, and in this case that means meeting the needs of ever more empowered customers, giving them the flexibility and choice they are accustomed to from the best digitally-driven customer experiences. 

Most lucrative 

For CSPs, probably the most lucrative opportunity comes from advanced B2B services. That isn’t to say that there isn’t more money to be made from the consumer segment, but the emergence of advanced 5G network capabilities – network slicing, low latency and ultra-reliable connectivity – creates the potential for new revenue opportunities in the enterprise segment. 

“For CSPs, probably the most lucrative opportunity comes from advanced B2B services.”

Take enterprise IoT as an example. According to GSMA Intelligence, revenue from IoT will more than triple from $381 billion in 2020 to $906 billion in 2025, even taking into account the impact of the Covid-19 pandemic, which has slowed growth in certain sectors. Taking a less optimistic, glass half-empty perspective of the market, connectivity will make up just 5% of this revenue, indicating just how important it is for CSPs to expand their presence beyond connectivity. 

Inevitably this places different demands on the software platforms CSPs rely on to do business. While it is difficult to pin this down to a single attribute, a theme that runs throughout is flexibility – without a killer app for enterprise services, the key to success lies in supporting a diverse set of them, efficiently and with agility. 

Looking again at IoT, CSPs will need to support an immense number of business models. At one end of the scale, providing connectivity for IoT devices could bring in new revenue per device per year, with the value coming from volume – meaning full automation will be needed to deliver services profitably. At the other end, IoT connections which require specific connectivity attributes and quality of service will be much higher value, which CSPs will need to configure on a case-by-case basis. 

Power of 5G partners 

Another key factor in 5G and IoT services will also be the effective sale and delivery of partner-led or partner-enabled services. As the GSMA Intelligence numbers show, there is an awful lot of value to unlock beyond connectivity, and CSPs are well placed to bring this together and create marketplaces for IoT solutions including hardware, software and services.  

To do this successfully, CSPs must be able to: manage partner products in a way that is aligned with how they manage their own; sell consistently across channels; and orchestrate seamless fulfillment to meet customers’ expectations. 

“To become a trusted partner in the digitalization of industries, CSPs must change the way they interact with customers to become more like partners than vendors.” 

Of course, when it comes to capitalizing on the potential of next-generation services much of the challenge comes from the changing dynamics between customer and supplier in the enterprise market. To become a trusted partner in the digitalization of industries, CSPs must change the way they interact with customers to become more like partners than vendors. This has to be supported by a flexible business support system (BSS) platform to accommodate the wide range of services and business models needed in the new world, and to meet demand – whatever form it comes in.

Glenn Gibson

Chief Marketing Officer

Originally published here by TM Forum