The financial potential of 5G is massive despite a challenging start, but it will need the right approach to the business market to really get it going, says Manju Kygonahally at Cognizant
Hype and a complicated rollout may have affected certain perceptions of 5G, but the financial potential of the technology cannot be overstated.
The Centre for Policy Studies recently estimated that if 5G coverage reaches a quarter more of the population than the UK government’s current target of 51 per cent, it will produce
GDP gains of more than £41 billion by 2027 via individuals and businesses gaining access to vital digital connectivity.
This financial benefit of course extends far beyond the direct 5G ecosystem and telecoms providers. However, the cost will need to be covered, leading to the key question: how do we monetise and fully exploit 5G and its enormous potential?
Consumer red herring
The 5G conversation to date has been dominated by the implications for the consumer. However, uptake has remained low and several issues remain in encouraging widespread adoption.
In particular, handset homogeny has led to fewer people upgrading with regularity, while 5G-enabled models remain expensive.
In the UK, people also question the need for a slightly faster mobile service when they are often connected to WiFi anyway.
As a result, providers have held tariffs at their existing levels to try to entice customers onto 5G contracts, making it impossible to recoup the enormous investment in the new infrastructure.
Put simply, the money to cover these costs has to come from somewhere. Focusing on the consumer 5G market, which is unlikely to be profitable in the immediate future, is a red herring from this perspective.
But where the impact of the new technology could be truly revolutionary – and thus highly profitable – is in the business sector.
Getting down to business
Business and vertical uses of 5G, once fully realised, are set to be the real areas of commercial potential for the technology and where the high infrastructure costs can be recouped.
In particular, the retail, finance, utilities and industrial sectors all stand to benefit enormously from 5G, both operationally and financially, if several areas can be fully exploited.
One is mastering data management. This is crucial to all digital transformation within the telecoms sector because it encompasses people, processes and technologies that ensure the accuracy, uniformity and uniqueness of data entities shared by multiple business units within an organisation.
Ensuring the efficiency of all this will only grow in importance as the amount of data increases under 5G.
Optimising the analysis of this data and speed at which it happens will enable communications service providers (CSPs) to accelerate their vision to supply digital services such as IoT and security in the B2B sector, as well as venture into areas such as home automation in the consumer sector.
CSPs have the opportunity to create and enable a digital marketplace, which can become the key differentiating factor in industry.
The 5G marketplace
Another area where CSPs can play a crucial role is in simplifying the decision-making process for capitalising on 5G. This will be needed as the technology drives a proliferation of connected devices, with the number of ways to maximise its capabilities and pieces in the chain required to do so increasing beyond the capacity of many businesses.
Keeping pace with new solutions as the 5G market quickly matures will be essential for businesses, and simplified decision-making will allow companies to tailor device, software, equipment, bandwidth and dynamic network- slicing requirements, to their specific needs.
A further area to focus on is collaboration. The considerations in rolling out 5G vary hugely from region to region and there is a danger of replicating some of the mistakes of 4G, which has still not been fully monetised and does not cover the whole of the UK.
5G instead represents an opportunity to collaborate. By creating partnerships between different operators across industries who can combine resources, expertise and requirements, a quicker and more profitable rollout might be possible.
In turn, not-spots can be reduced to help ensure a truly connected experience for the whole country, allowing the financial potential of 5G technology to be more fully realised.
Winning the race
The Spinal Tap jokes about 5G being ‘one faster’ than 4G are fun but indicate an underlying and potentially widespread misunderstanding about the full opportunities presented by new technology.
In fact, it’s a combination of 5G technology, IoT and data analysis that’s the winning formula. Our strategic partnership with Aston Martin Formula One as the team’s digital transformation partner has a significant focus on trackside through using 5G, IoT and data analysis to help decision- making, including creating a digital twin – or virtual replica – using AI and machine learning for simulations. What 5G brings is real-time data analysis and, fittingly for 200mph race cars, high- speed connectivity.
Now is the time to be making preparations to maximise the future capabilities of 5G and avoid repeating the underwhelming arrival and performance of 4G. Getting this right early will accelerate the technology’s journey to profitability and its lasting game-changing impact on both individuals and industries.