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News Every Day |

Five trends defining enterprise 5G in 2022

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Tom Loozen, EY Global Telecoms Leader, looks at some of the key themes defining business use of 5G technology.

The world of industrial 5G faces significant challenges, despite healthy levels of investment and interest in emerging use cases across industries. The latest EY Reimagining Industry Futures study highlights that enterprises are focused on adopting 5G to bolster business resilience and meet corporate priorities, but reveals that only 24% are truly confident that their organization can successfully implement 5G.

It’s therefore more important than ever that 5G providers step up to help enterprises address their critical pain points, solidify ecosystem partnerships, drive positive financial outcomes and implement 5G and related technologies with confidence.

To help them achieve this, here are five key trends for vendors to consider.

  1. Spending intentions are strong but 5G adoption is not guaranteed

Across all emerging technologies considered in the study (including internet of things, blockchain and artificial intelligence), future spending intentions are highest in 5G, with 56% of enterprise respondents planning to invest within three years. In particular, organizations are more interested than before in 5G use cases that can help them meet sustainability goals (68%) and improve supply chain management (65%).

Yet long-term adoption of 5G is not guaranteed and vendors should be cautious not to become complacent. Notably, the number of companies in Asia-Pacific and the Middle East planning to invest in 5G is down nearly by 8% on last year. Technology providers should recognize that, even as 5G becomes more mainstream, some organizations may become less receptive to it.

  1. Enterprises’ 5G vision has become more defensive

A more defensive mindset toward 5G has taken hold — one that prizes efficiency and optimization ahead of entering adjacent markets and driving top-line growth. Nearly half (49%) of respondents are prioritizing process optimization as a key 5G application, while only 28% rate sophisticated 5G use cases featuring virtual reality or augmented reality as a key application.

Meanwhile, 85% say the impact of the global health crisis is driving their interest in 5G, up from 52% in last year’s study; 80% say supply chain disruption has galvanized their 5G pursuit; and 71% cite the focus on environmental, social and governance (ESG) issues. 5G providers should take these attitudes on board and provide a more compelling vision of 5G’s potential to drive top-line growth while ensuring that their use cases meet organizations’ near-term needs.

  1. Enterprises are open to new ways of purchasing and deploying 5G

Enterprises are increasingly exploring 5G solutions that are delivered through disruptive business models. The study reveals that 77% are interested in using private networks to support the implementation of 5G use cases. In addition, 50% of respondents rate the purchase of private network capabilities as an important 5G investment strategy for their business, citing a range of benefits led by greater network control (68%) and improved network reliability (64%).

At the same time, 71% of businesses would consider purchasing 5G through an intermediary such as a mobile virtual network operator (MVNO), and 64% say that directly acquiring 5G spectrum could be important for them. These disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure, and that more agile go-to-market strategies are essential.

  1. 5G’s relationship to other technologies is in focus but cyber risks being overlooked

Businesses indicate that they have a poor understanding of 5G’s relationship to other emerging technologies as their number one internal challenge, up from fifth position in last year’s study. Looking ahead, exploring 5G’s relationship to other technologies is also a top priority. This underlines a desire to exploit a mutually beneficial combination of “frontier” technologies and implies that organizations would benefit from ongoing education around the basics of emerging technologies.

Despite this focus on more advanced tech – which will undoubtedly result in increasing the cybersecurity attack surface – mitigating cyber risk ranks only sixth as a 5G priority. Given the range of potential cybersecurity threats present in Industry 4.0, enterprises should ensure that trust by design principles underpin their 5G deployments to ensure this doesn’t become a dangerous blind spot for businesses.

  1. Telcos lag network vendors as trusted transformation experts

Competitive pricing emerges as the top attribute currently sought by enterprises when looking for technology and telecoms providers to support their 5G journeys, overtaking speed of execution. Looking to the future, enterprises rate suppliers’ ability to co-create and customize solutions as the two most desirable attributes.

This focus on collaboration underlines that enterprises are looking for transformation partners, not just technology suppliers. However, enterprises’ opinions are divided on which suppliers have the digital transformation expertise they need to succeed. Application and platform vendors are perceived as most equipped transformation partners (55%), while network equipment vendors (30%) are gaining ground year-on year. Significantly, telcos lag, with only 19% of enterprises regarding them as digital transformation experts. Improving telcos’ credibility as enablers of positive business outcomes and delivering transformation through new forms of connectivity is essential.

All in all, the study confirms that 5G remains highly relevant to organizations, particularly as they look to build greater resilience as we emerge from the COVID-19 pandemic. Yet, it cautions that businesses may be overlooking opportunities for growth, and they need more support from their suppliers if they are to make the most of Industry 4.0.

 

Tom leads an integrated team of telecommunications professionals working in more than 150 countries, and is responsible for driving the industry growth strategy through innovative solutions across Consulting, Tax, Assurance and Strategy and Transactions. Combining the strength of the broad range of EY services, he leads strategic conversations to address clients’ most complex business challenges, shaping and delivering unique value propositions. The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

 









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