5G Business Models: Considerations for Operators

5G Business Models

In the commercial telecom industry, and in the wake of the 4th industrial revolution shaking today’s markets, operators require new avenues of income. Operators have potential to make new money because of new 5G business models and capabilities including huge connectivity, ultra-reliable connections, low latency, and integration with edge services. This is especially true with 5G standalone (SA).

These services will be offered and sold in a different manner than customary offerings. For instance, they may be managed through APIs and consumed on demand. The functionalities made possible by 5G will be valued differently by customers than existing offerings.

Operators will have to experiment with new types of package features and different price structures. Services like unified communications, for instance, might be offered with service level guarantees.

Mobile operators will need to adapt their thinking and make new system investments in order to accommodate the new functionality, delivery, and pricing models. The connectivity-related goods that operators may offer will be able to include 5G-related capabilities, expanding their income potential and bolstering their position in the value chain.

Operators with the necessary resources will integrate 5G technologies into existing cloud, security, UC, and fixed offerings, potentially resulting in a special package of goods. The most ambitious operators will leverage the additional 5G technologies to improve their offerings in industries like healthcare and drones.

The fact that many 5G SA services are still in their theoretical stages may be a drawback in the case for them. The private networks sector, which has experienced significant expansion, already offers many of the capabilities that are being explored for 5G SA. Another area with tight ties to 5G SA networks, edge computing, is being investigated by more than 50 operators. Evidence that the argument for improved 5G networks is not only theoretical includes interest in private 5G networks and edge computing.

Each of these advancements has effects on the existing strategy of an operator. Operators should:

  • Keep an eye on the advancements in edge computing and private networks since they will show where demand will come from and teach us lessons for projects to come.
  • Think about the impact that new features will have on market positioning. This will enable business owners to better execute their present plan and perhaps consider more ambitious, alternative solutions.
  • Try out different pricing strategies for the brand-new services that 5G SA makes possible, and be ready to make investments in the technologies needed to support and provide such services.
  • Think about how to handle new client types, who will need new 5G business models and interaction model.
  • Think about the structure that an operator needs to iterate and experiment with 5G SA quickly. This research looks at how telecom operators can be ready for the 5G opportunities in the enterprise sector.

New Features Enabled by 5G

5G enables carriers to upgrade their mobile offerings with new capabilities. Operators now have choices thanks to 5G, particularly 5G standalone (5G SA), to break the loop of seeking out more connections and data use to offset dropping unit pricing.

The relationship between data quantities and income is weaker thanks to 5G’s additional features:

  • Extremely dependable communications. For earlier network technologies, mobile carriers were unable to provide service-level assurances, but with 5G, they will be able to.
  • Communications with little delay. Time-sensitive applications may communicate at speeds of less than 5 m/s thanks to 5G SA.
  • Massive connectivity: 5G will enable around 1 million connections per square kilometer, which is more simultaneous connections than previous generations, and potentially support IoT applications like dense sensor networks.
  • Combining edge computing integration. Businesses are using edge computing more frequently than they use traditional cloud computing models because it puts the computing stack closer to the end device. Low latency is a major benefit of edge computing. Low-latency services may be supported by 5G in both a private network (usually employing customer edge) and a public network when paired with network edge.
  • Decent coverage Although it’s not necessary for 5G to have extensive coverage, operators will need to provide it if they want to offer new forms of connectivity in various market segments.

New 5G Enabled Business Models

Business users of operators will place varying values on the new functionalities that 5G makes possible. Measures of dependability, latency, integration with other features, or even the ultimate outputs that the network permits will be used to determine the value to consumers rather than just data quantities.

Operators will need to test out various pricing strategies for clients and be open to changing how features are priced and packaged. Possible price ranges include:

  • Usage-based pricing,
  • Service level-based pricing,
  • Time-based pricing,
  • Coverage-based pricing including options for deep interior coverage,
  • Volume- or device-based pricing,
  • API-based pricing

Operators might charge for each of the various 5G connection capabilities separately, provide them as a connectivity and SLAs package, or as a service and SLAs bundle. A unified communication service, for instance, may be marketed with assured SLAs. Bundles might be made specifically for certain kinds of applications.

As an illustration, connection created to enable applications that heavily rely on AI or ML may combine very low latency, high availability, and edge computing capability. There should be no underestimating the difficulty of implementing new models.

Fixed-division telecom operators will have some experience with these models, but even for converged operators, the quantity and variety of features are growing. Many of these capabilities will be novel for mobile-only carriers and need fresh thinking.

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