CSPs (communication service providers) are putting all their hopes on driving revenue from 5G enterprise customers, however insights from market research company in India, suggests that they are in danger of missing out on their golden business-to-business 5G opportunity. This is potentially worth billions if not trillions of dollars in the coming decades, unless they innovate their go-to-market strategies.
Industries and enterprises are ready to reap the benefits of 5G in a new report released today by digital business platform and cloud native BSS specialist BearingPoint//Beyond in partnership with Omdia. The report concludes that communication service providers are missing out on playing the lead role in early 5G enterprise service deals and in some cases, not being involved at all.
This is because the enterprises are looking for a more vast package of services and technologies which includes but is not limited to 5G connectivity, as many CSPs are still focusing on delivering 5G connectivity as one isolated service offering because they do not have the collaboration ecosystem in place in order to deliver a broader range of applications and solutions.
Omdia’s enterprise 5G innovation tracker is early evidence of what could possibly be considered a significant setback for 5G operators. This has identified more than 300 5G related contracts awarded by businesses. Of these 300, only 21% will lead by communication service providers however, 32% were being led by an internal team within the enterprise. Some deals did not involve a service provider at all – the automotive sector has been identified as a vertical where CSP‘s are now being sidelined. Other projects are being led by a wide selection of companies. This includes systems integrators and vendors, so it is currently quite a fragmented market.
Dario Talmesio, principle analyst from Omdia says “with 5G B2B, many enterprises are being an orchestrator of their own situations, which include 5G connectivity but do not necessarily include direct involvement from CSP‘s.”
He goes on to say that one of the main challenges for service providers is how they think about engaging with enterprises and that they still believe they can offer everything that enterprises need.
Early this year, BearingPoint//Beyond highlighted research
results found CSPs were already falling short of enterprise user expectations
about what telcos might be able to offer in the world of 5G.
Businesses want to buy 5G, CSPs want to sell 5G. The problem is that CSPs want to just sell connectivity and standardized connectivity with further infrastructure products, while businesses want to buy more sophisticated, complete solutions that better fit their needs and require the integration of multiple technologies from multiple players.
Those businesses are predicted to spend a lot. According to the forecasting team at Omdia, the 5G enterprise service market (comprising connectivity, hard work, solutions/applications), could be worth up to $13.2 trillion within the next 15 years also. That is a lot of business to win but even worse to miss out on.
The manufacturing sector is expected to provide the greatest business opportunity, with the value of 5G services delivered to companies in that sector reported by Omdia at $4.6 trillion between now and 2035.
Michal Harris, Head of Marketing at BearingPoint//Beyond, says the company has been tracking the B2B space for CSPs for some time and is certain that enterprise 5G is where the main revenue growth exists for CSPs, but “the report shows that if CSPs are to benefit from 5G enterprise opportunities, they need to make sure they don’t repeat the same mistakes that were made in 4G [and IoT and cloud]. It all needs to start with what enterprises want – the CSPs need to understand that better. The conversation is still all about technology but it needs to be about the business needs of the enterprises,” she emphasizes.