Enterprise 5G use cases need to be practical, not sexy, survey says

enterprise 5G use cases
Image by Julia Tim | Bigstockphoto

Business are investing in enterprise 5G, but they’re far more interested in use cases that drive immediate real-world benefits, not cutting-edge services.

That’s according to the third edition of EY’s Reimagining Industry Futures Study, which finds that enterprises are looking to 5G to help alleviate immediate business pressures brought by the COVID-19 pandemic and related global events. In fact, 85% of survey respondents said the impact of the global pandemic is driving their interest in enterprise 5G, up from 52% a year ago. Supply chain disruptions are another 5G driver for 80% of respondents, while 71% cite a focus on environmental, social and governance (ESG) issues.

However, while enterprise 5G is often promoted by operators and suppliers alike as enabling hot vertical use cases like smart factories, hospitals and autonomous fleets, as well as advanced AR/VR tools, only 28% of respondents are interested. A key enterprise 5G app for almost half of respondents is process optimization

The findings indicate enterprises are now focused on bolstering business resilience, meeting corporate priorities and responding to stakeholder demands, says Tom Loozen, EY Global Telecommunications Leader:

“While the hype around how 5G low latency could power the metaverse or commercialize augmented reality continues to intensify, this study indicates that the technology has moved out of its infancy and is now actively being applied to drive real-world benefits. This is to be applauded, with 5G following the same innovation cycle of other transformative technologies. Sophisticated use cases will become important in time. More pressing, however, is the need for 5G providers to tune their solutions to the practical demands of industry leaders today.”  

One caveat is that many businesses still need convincing that enterprise 5G can deliver even that much right now – 37% expressed concern that the current use cases offered by 5G and IoT vendors don’t meet their business resilience and continuity needs, and 47% don’t think their sustainability goals are met by today’s use cases. That’s why in Southeast Asia, it’s mostly governments driving 5G use cases, says Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications (TMT) Leader:

“Use cases for 5G in the private sector will need to be more clearly defined before technology operators are confident enough to take 5G applications to market. For now, governments are the main drivers of investments in 5G infrastructure public sector projects. Closer to home in Singapore, the 5G@Sentosa project provides a testbed for promising public sector use cases that could be rolled out on Singapore’s mainland.” 

Telcos battle credibility gap

While enterprise 5G ambitions are more grounded in immediate practical benefits instead of whiz-bang futuristic promises, many enterprises are becoming increasingly receptive to 5G solutions delivered through disruptive business models.

For example, the EY report says, 77% of respondents are interested in using private networks to support the implementation of 5G and IoT use cases, and 71% are interested in buying 5G through an intermediary rather than directly from a telco.

Obviously that’s bad news for telcos who continue to be faced with a significant credibility gap – less than 20% of respondents consider them to be digital transformation experts (unchanged from last year’s study), while 30% trust network equipment vendors as favored digital transformation experts (up from 19% last year), Loozen says:

“Disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure and more agile go-to-market strategies are essential in a 5G-IoT world. Telcos should take steps now to help ensure that they can meet enterprise demand for private network deployments.”

The full report – which looks at enterprise 5G as part of a broader survey on overlooked Industry 4.0 growth opportunities – is here [PDF].

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