A recent report revealed that telecom companies will spend about $1.1 billion on 5G networks around the world between 2020 and 2025, but how they’ll get a return on their investment remains somewhat of a mystery, Darshan Naik, Chief Growth and Strategy Officer of Telco, Media and Technology Markets at Capgemini Americas, wrote for Forbes.
Increased interest rates have raised telecom providers’ need for cash flow and left a lot of them looking for ways to monetize 5G for their business, according to Naik.
“Now more than ever, it is evident that telco leaders understand the need for innovation to keep their businesses economically viable—while keeping prices maintainable for consumers,” he said.
Looking to innovative services and applications that are already leveraging 5G’s benefits is perhaps the best ways operators can leverage the fifth generation of wireless connectivity, according to Naik. Leaders must also understand if their market is business-to-business (B2B) or business-to-consumer (B2C) because their go-to market strategies could be very different.
For example, with a B2B target market, it’s critical to find use cases where operators can serve as a strategic partner that can deliver 5G benefits that are tailored to a business’s specific needs.
Industries that are most likely use 5G
There’s no shortage of sectors that can benefit from a 5G network but Naik noted four in particular that telecom operators should look to as they attempt to monetize 5G. The first is self-driving vehicles and smart cities, as 5G can deliver reliable connectivity between the vehicles, traffic infrastructure and the cloud, which can make autonomous driving safer.
Additionally, 5G can support all of the sensors and Internet of Things (IoT) devices that would be placed throughout different cities. These devices would need 5G in order to analyze traffic, air quality, energy consumption in real time as well as support future smart cities.
Telemedicine (virtual appointments, remote patient monitoring), gaming and virtual and augmented reality (virtual real estate tours, immersive gaming and virtual tourist destinations) were the other sectors Naik believes are prime targets for telecom operators that are looking to monetize 5G.
“In a B2C target market, telcos can offer their 5G services directly to consumers,” Naik said. “It will be important for telcos to differentiate themselves from their competitors and prove themselves reliable, secure and valuable to build trust with customers.”
Additionally, hyper-scalers are looking for ways to enhance their services and products with 5G technology. Edge computing, IoT and gaming is where many top providers have put their focus as they look to leverage the 5G surge. Naik suggested telecom companies should try to create strategic partnerships across different sectors to offer specialized solutions to meet industry-specific needs.
5G challenges telcos face
Attempting to monetize 5G is a good solution for telcos looking to offset their investments, but doing so might not be so easy. There are several challenges companies could face as they go on this 5G journey, including high equipment costs.
Naik suggested telcos with local governments and other stakeholders to address zoning and regulatory concerns to help lower deployment costs.
Network security also remains an issue around 5G. The next generation of wireless has plenty of benefits like high speed and reliability, but it still remains vulnerable to cyberattacks. It’s crucial leaders find solutions that have strong security features to ensure user data is kept out of the wrong hands.
“This challenge must be met with strong leadership and a comprehensive roadmap,” Naik said. “Once company decision makers can effectively communicate priorities to their talent pool—as well as provide the necessary education and upskilling—these roadblocks can be addressed and conquered one by one. Success in monetizing 5G will depend on a variety of factors—and can often appear to be a daunting process. However, it is no longer an option for telcos to carry the full financial burden of a 5G rollout.”