5G – Monetising the Enterprise Opportunity
June 3, 2020 - Tony Gillick
How to expand enterprise offers and open new revenue streams
5G deployment is a lengthy and expensive process, with operators globally looking for that killer use case to monetise the latest generation of mobile technology. Mobile operators have long known that the enterprise is one of the key areas for 5G ROI. According to Omdia, nearly 80% of enterprises plan to increase their IT spend in 2020, and in the same survey, 36% of enterprises expect 5G to play a major role in their organisation’s digital transformation.
Despite this, there are uncertainties regarding just how operators make the most of the enterprise market and more importantly how they monetise it. Operators need to prove to enterprises that they are essential to the delivery of enterprise 5G services—or risk them taking on the task themselves and operators missing out on an important revenue opportunity.
There are several obstacles standing in operators’ way of the 5G enterprise opportunity; from slow cultural transformation of operator organisations, to not being able to roll out services quickly enough. So, how can these be overcome to see operators monetise the enterprise?
Leaving doubt behind
A key obstacle for operators entering the enterprise space is their own perceived lack of industry and vertical knowledge. Enterprise networks will see operators offer services in all kinds of vertical industries—from manufacturing and agriculture, all the way to medicine and automotive. Some industries and market sectors will be niche and for many operators, they’ll be unknown territory. But operators need not be industry experts for every market they serve—it would be impossible to expect that. Instead, operators should adopt a B2B2X model whereby they serve as the industry enablers.
By combining the skills and assets that operators already possess—for example, being able to manage a large subscriber base and handling large volumes of data—with the capabilities of 5G (high speed, low latency and network slicing) operators can become the centerpiece of cross-industry services without needing to gain significant vertical-specific knowledge. And while operators will be offering services to audiences that are perhaps new to them, the services offered should draw on operator’s expertise and experience; for example, providing white-labelled billing services or device management, or perhaps providing customer data insights.
These services form the core of operators’ operations What’s more, the ability to cater to many industries and verticals at any one time means operators can significantly increase how much money they make from these enterprise managed services.
Need for speed
Adopting a new B2B2X model is just one part of the equation—operators also need to ensure they can deliver on it. For many years, operators have been lumbered with the reputation of being too slow to move and inflexible. Thanks to digital transformation, this perception is finally shifting but operators must ensure they are continuing to adopt the right tools and approaches to deliver new services quickly. Enterprises won’t wait around for operators to deliver the 5G services they need, and as we’ve seen in recent months, large corporations such as Bosch and Ford are taking the necessary steps to build and own proprietary private 5G networks. Operators must therefore be able to act fast, not only to deploy the 5G infrastructure, but to ensure they can offer the correct services that run on top of said network.
Critically, legacy systems won’t support the requirements of 5G networks and so operators must make significant efforts to upgrade or overhaul existing IT systems. This will see them consolidate existing IT systems and remove or reduce IT silos to enhance overall IT agility, and move IT systems to the cloud. In fact, cloud migration will play a key role in giving operators the flexibility and scalability they need to monetise enterprise services. But moving to the cloud is no easy feat, and operators must think strategically about which systems should be moved as a priority. This should be done according to how much impact the move will have on operators’ ability to monetise 5G. Operators should then asses where the chosen systems are in their lifecycle, this will help them decide whether migrating to the cloud is the right step, or whether said system should be replaced or retired. The migration to cloud should also present an opportunity for operators to increase their agility and scalability by leveraging cloud-native features such as microservices, containers and auto-scaling where possible. These cloud-native features tend to be more cost-effective and so will also prove to be an important part of reducing capex and opex during operators’ journey towards 5G ROI.
In addition, operators will need to ensure their IT systems also work with and support 5G business models. This will mean being able to not only launch new services quickly but be able to monetise them quickly, too. Monetisation systems should provide operators with scalability and flexibility to support large volumes of billing traffic. These systems should also be upgraded to offer operators the ability to support different monetisation models—subscription based versus billing on first use, for example.
There’s no doubt that some operators have some work to do before they can properly monetise enterprise 5G. What we’re seeing is many operators using 5G as a catalyst to modernise their IT systems. The advantages of this are two-fold. Firstly they’ll be ready for new 5G opportunities such as the enterprise market. Secondly – they will make massive savings, thus providing the internal business case to upgrade their systems for 5G.