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From Network Provider to Ecosystem Enabler

June 21, 2022 - Julia Hogarty

The evolution of the telco landscapes has redefined the role of some in the industry - whereby the shift from a service to provider to solution enabler has become the new norm.

From one network generation to the next, operators have redefined the value they deliver to their customers. To date, this has usually meant an extension to the variety of services they can offer. The introduction of data with 2G and 3G, for example, was a catapult forward from the rudimentary call and text functionality offered up until then. However, with the evolution to 5G and beyond, there is a more fundamental change afoot. It is not only the value that the network provides that is being redefined, but also the role of the network provider itself.

Over the last few years, tech companies across the board have been burgeoning at the idea of ecosystem enablement. Spurred on by the pandemic, the need for cross-sectoral digital platforms that allow for diverse, multi-component services to be fulfilled became more apparent. This, combined with the need to generate new revenues from 5G, has meant that operators are re-evaluating how they play in this new landscape of shifting value chains. McKinsey estimates that digital ecosystems have the potential to add up to $60 trillion to the global economy by 2025.

So, what can be expected next? Network providers have acknowledged the need to move beyond offering connectivity alone as a novel service and this is evident as we see an evolution towards differentiating on the provision of experience offerings with XR, cloud-gaming and metaverse type packages. Although beyond the consumer, operators need to start looking to enterprises if they want to unlock the big-ticket revenue opportunities made possible by 5G. This means opening the network to the creation of new value and repositioning the operator as an ecosystem host that can facilitate other companies to tap value from the network and build new lucrative value chains.

Hyperscalers have been enthusiastically proving out how these new ecosystems of interconnected value chains will be hosted in the cloud efficiently and at scale. Partnering with tech companies of all shapes and sizes, Hyperscalers have impressively established significant momentum and identified themselves as standard-bearers for the ecosystem cause. They have the objectivity that comes with sitting outside traditional industry silos and were able to see the potential in collaborative digital ecosystems long before the individual industries themselves clocked onto the play. Now, operators are looking to partner with Hyperscalers to begin to build out their own ecosystems where enterprises can co-innovate and co-create new solutions for the digital advancement of a multitude of industry verticals.

Network providers are in a prime position to not only provide the connectivity framework for these ecosystems to prosper, but to also enable partners to interact with and generate value from their new 5G investments. As these ecosystems become established, the B2B market will garner significant momentum and arguably will become the bastion of 5G profit over the next number of years.

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