5G is here but telcos are missing the opportunity – again

5G here
Image credit | Tom Merton

5G is here. Even blowing away the hype surrounding this ‘transformative’ technology, 5G is here and being deployed.

You would be forgiven for thinking that this time, telcos would be in the driving seat, that this time they would not allow others to take the lion’s share of the revenue.

Yet, according to a new report from BearingPoint//Beyond and Omdia, telcos are losing out.

The frustration is that 5G – so far – is not about cool consumer apps, it is about enterprise and business solutions. Almost 73% of telcos believe that the 5G opportunity lies in the enterprise world and yet in 40% of early enterprise deals the telco was the secondary supplier, while 32% were led by the enterprise and only 21% were led by a telco.

More alarming is that, in a small number of cases, the telco was left out of the deal altogether.

What this proves, according to BearingPoint//Beyond CEO Angus Ward, is that “the way CSPs want to sell is at odds with the way in which businesses want to buy. Businesses want to buy complete solutions that fit their needs and help them solve business problems.” And, whether we like it or not, telcos still haven’t got away from their built-in engineering instinct to sell connectivity.

This failure is all the more frustrating because industry observers were beginning to believe that telcos had not only grasped the fundamental truth that the only sensible path to success lies in partnerships but examples were beginning to emerge.

In the consumer world, it would be more or less understandable – and no less frustrating. The reality is that telcos do not have the traction with decisions makers in some industries and they will continue to lose out if they do not partner to produce real solutions to business problems.

The opportunity itself cannot be underplayed. The global economic impact of 5G is estimated at $13.2 trillion, equating to 5% of global output and many claim that 5G will have a transformational impact on a range of industries.

The opportunity now that 5G is here is not simply about processes but about people too. 5G has the potential to provide sets of digital tools to employees that will transform the way they work and therefore transform efficiency and output. Designing and implementing these tools can only be done in partnership with industry specialists.

The recommendation from BearingPoint//Beyond, backed up by Omdia, is to stop thinking like a telco. To stop asking ‘what is the opportunity for 5G?’ Instead, telcos should think about how they can help industries complete their own digital transformations.

The same is true in the Internet of Things, where, again telcos are thinking about connectivity and not much else.

We have been saying for some time that 5G and the IoT do not, in the main, need each other and telcos must concentrate of solving business problems. The problem is made worse because most enterprises do not look upon telcos as partners who can solve problems but as connectivity providers – that is all. In fact, delivering business solutions is likely to involve service platforms, management tools and data-centric applications.

In short, 5G is here but the telcos are yet to join the team.

The recommendation from the report is that telcos ‘need to be brave and act now, to partner quickly and intelligently.’

And probably roll out new marketing campaigns to educate enterprises away from the belief that all they sell is connectivity.

There are, of course, bright spots and the report (which can be downloaded here) presents interesting success stories, some telco led.

But, by and large, the 5G opportunity is being taken up by others.

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