BLOG

Industry survey: Data is now a commodity

November 11, 2020 - Martin Morgan

Martin Morgan, VP Marketing, discusses how the recent telecoms.com survey results point the way for 5G to reverse commodity status of data and open new revenue streams

In 2020 there was a lot we didn’t see coming. But one result from the telecoms.com Annual Industry Survey won’t be a surprise to anyone working in mobile. Data is a now a commodity. When asked when data would reach commodity status over half the respondents said that we’ve already reached this stage. Seen as an annual health-check for the industry, the telecoms.com survey is anonymous and so the survey answers give real insight into what telecoms professional are thinking.

So if data is now a commodity where the only differentiator is price, then raises the obvious question, how are service providers going to increase revenues? Thankfully 5G provides an answer. With 3G and 4G the network was a means of connectivity. Some OTT companies did very well selling digital services over the service providers’ networks and drove a lot of mobile traffic and growth. But at the same time the move towards data commoditisation was getting closer with more GB for less money being the main marketing message for many. The service providers were getting squeezed.

With 5G it’s different. The reason is that in 5G the network is doing more than just providing connectivity. The experience that the 5G network provides is an intrinsic part of 5G offer – such as gaming with no buffering, or home working with no dropped zoom calls, or advanced enterprise use cases such as autonomous transport or smart building management. The good news is that service providers can monetise this experience. 56% of the survey felt that mobile customers would pay a premium for a guaranteed 5G quality of service (QoS) for a range of services such as home working bundles, entertainment packages, smart home services and gaming. In the enterprise market expect this willingness to pay for guaranteed QoS to increase. Last year Capgemini surveyed over 800 industrial companies on 5G. 79% said they’d expect to pay a premium for guaranteed 5G QoS.

People will not pay more for 5G data on its own, but they will pay more for network enabled services that delivers the right level of experience, and that is a fundamental difference between 4G and 5G. With 5G service providers can sell services and use value based pricing to grow revenues, and not be involved in the race to the bottom offering increasing amounts of data for less money.

The survey also highlighted the importance of partnerships. Increasingly companies will see 5G as a delivery channel for their services. This will drive more partnerships, which will result in many new offers from service providers. When asked, “do you think being able to offer wholesale service level agreement for QoS will drive more service companies (e.g., gaming companies like Nintendo) to use 5G as channel to market for their services?”61% said yes.

With regards to the types of 5G offers, which included guaranteed QoS, that would be most attractive to customers the top three were home working offers, gaming and FWA broadband access.

However, in order to take advantage of the move to network enabled services and the new partnership opportunities that 5G presents service providers will need to look at their BSS and OSS stacks. In 5G there’s the need for 5G policy and charging functions to be tightly integrated to service catalogs in existing BSS stacks and also to the 5G network. This enables the creation of a Value Plane that bridges IT & business in a service provider and the 5G network. This is needed because the characteristics of the 5G network are a central part of network enabled services and offers and they need to be easily managed, controlled and monetised. This survey shows that people will pay a premium for network enabled services and that service providers can monetise experience, which will open new revenue streams and place service providers centre stage.

GET TO KNOW THE LATEST

Way Beyond Smartphones

5G is rightly becoming understood more as a catalyst for service change rather than change itself. Massive service diversity and thousands of new use cases are on their way. The role of successful service providers is set to evolve dramatically in 2022.

October 21, 2021

Sky Glass –Hanging on to the cord cutters?

David McGlew, Openet Marketing Director, looks a Sky Uk’s latest innovation and their strategy to reach additional market segments

October 14, 2021

Facebook Outage Reminds Us Why Networks Need Cloud

Julia Hogarty, Product Marketing Manager, talks about the worldwide Facebook outage and the dependency on data centres to juggle network load.

October 5, 2021