Want to Maximise the Potential of 5G? It’s Time to Take a Look at Your Commerce Systems
It has been clear for a while that to a degree, 5G is here. We need not look far to see that various launches have taken place in several countries around the world – and the pace is picking up, as we head into the tail end of 2019. And the early signs are that there is money to be made from 5G – a good thing. But – and this doesn’t come as much of a surprise – that money is currently flowing from communications service providers to vendors.
In the midst of all the recent Q2 announcements, the leading infrastructure vendors – you know the ones – were all quick to point out strength in their networks’ businesses driven by 5G-related investments. On the other hand, the CSPs showed business-as-usual, with the impact of 5G restricted to increased spending on infrastructure and marketing costs, for those who have launched services so far.
Of course, this is the joy of being in an infrastructure-based industry: networks always have to be built before you can generate revenue from them. There are also limits to the revenue that can come from 5G – including a finite pool of customers ready to upgrade to ’the next big thing’ in the absence of demonstrable benefits.
The prevailing trend thus far is that 5G is currently being used to deliver services that are an evolution of what is already available – better mobile broadband services and fixed wireless access. While there may be some potential for a revenue increase from this, it won’t be very much and it probably won’t be for very long. Some operators have already indicated that consumer 5G mobile broadband will not carry a premium.
The current forms of 5G are very much a stepping stone to the promised land of industry-transforming applications and amazing consumer experiences, which have been the promise of a multitude of PowerPoint slides.
But once networks become available using the next version of the 5G standard – think mid-2020 onward – things really start to get interesting. Enterprise use-cases piloted in 4G will become ready for prime-time, while AR and VR will power new consumer experiences, underpinned by the availability of high-quality connectivity and lower latency. CSPs will start to see new opportunities to create revenue, rather than trying to squeeze more out of what they already have.
Here at Hansen, our focus is on empowering service providers to bring new products and services to market quickly, in order to generate new revenue. What we know about 5G is that there are numerous unknown factors for service providers.
We currently have two major studies in the pipeline which will be published in the coming weeks: an in-depth look at the demands 5G will make on business and operations support systems, as well as the follow-up to last year’s Create-Sell-Deliver Outlook, where we take an in-depth look at CSP priorities for the launch, monetisation and delivery of new services, 5G and otherwise.
Two key messages are coming through loud-and-clear. First, service providers are looking for systems which will give them the flexibility to launch new products and services quickly and easily in the 5G world, reducing time-to-market in order to effectively meet customer demand. Second, automation will be the key tool to address inefficiency, as both the products sold and the infrastructure used to deliver them get more complex.
CSPs are coming to recognise that though they will be presented with a whole new set of opportunities powered by 5G, they risk missing out and being left behind if they are not able to effectively adapt and respond. And if a service provider isn’t able to act, you can be sure that someone else, somewhere, will.
The writing is on the wall and our key message for CSPs, informed by what CSPs are telling us, is that now is the time to ensure that operational and business systems, not just networks, are in place to deliver on the commercial potential of truly next-generation 5G services, in whatever form they may take. The worst possible outcome will be for service providers to be unable to act, quickly and efficiently, when opportunity comes knocking on the door.
Product Marketing Manager