What CSPs need for 5G success will surprise you: TM Forum

5G
Image credit | Valeria Ushakova

The opening keynotes on Day 1 of Digital Transformation Asia in Kuala Lumpur featured a headliner panel debating the role of 5G in the coming connected society. During the debate, a snap audience poll revealed that almost everyone believes the main monetization opportunity for 5G is in enterprise services, not consumer services.

Herbert Blum, Global Head of the Telecommunications Practice, Bain & Company, remarked that while enterprise does represent a new revenue opportunity, the fact that it’s incremental implies consumers will remain operators’ primary revenue source – and it’s a good idea to keep investing in that.

“You need to reinvigorate your base offering,” he said. “Your existing customer base is actually 99% of your 5G funding. CapEx is not going to explode – we can run the next eight, nine years with your balance sheet and fund all this [5G] stuff with mobile broadband, and then some incremental stuff like B2B.”

Azlan Zainal Abidin, Chief Enterprise Business Officer, Celcom, agreed, noting that in any case the initial 5G market opportunity in Malaysia is going to be faster mobile broadband for consumers.

“The second wave will be massive IoT [internet of things] services like smart cities and food supply management, and the third wave will probably be mission-critical M2M [machine-to-machine] services such as industrial robotic automation, telesurgery and drone surveillance.”

Those second and third waves are where most of the 5G hype is focused, but Blum warned that that the real value proposition of 5G networks is to serve as the “glue” of a vast digital ecosystem of partners – to include other CSPs, which historically have a poor track record of cooperation.

“The degree of cooperation among telco operators has to go way up,” he said. “You can’t just set up something like IoT roaming and pat yourself on the back. That’s like 5% of what you need to do.”

Blum said the telecoms sector needs to get to a point of cooperation where the airline industry is now. “When a plane originating from the Philippines lands in the US, the logistics are all in place to make that work. The point is there’s so much commonality there beyond a SIM card.”

To effectively target the enterprise market, Blum said that demonstrating and implementing use cases for customers to address their specific pain points was helpful, but telcos should also make sure to galvanize around common capabilities, because doing so will make B2B plays easier for everyone.

Shankar Arumugavelu, Senior VP and Global CIO, Verizon Communications, agreed, describing it as a scale issue:

“If you just focus on bespoke solutions, then the business case doesn’ t stand. At the end of the day, we have to make sure that this is a business that we can scale. Step 1 is to really understand what the enterprises need, and then zoom out to figure out what are the common capabilities, because that is something that we can scale.”

This article was first published on TM Forums’ Inform, you can watch the debate here.

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