Displaying items by tag: Communications Service Providers

75 percent of end-user organizations would be willing to pay more for 5G mobile capabilities, according to a Gartner study in which over 200 IT and business leaders from the Gartner Research Circle participated in a survey conducted in the second quarter of 2017. The objective of the survey was to understand how demand for 5G is growing and to learn about adoption plans for the technology. 

“Those in the telecom industry are more likely to be prepared to pay more than those in other industries,” said Sylvain Fabre, research director at Gartner. “End-user organizations in the manufacturing, services and government sectors, for example, are less likely to be willing to pay a premium for 5G than telecom companies, which are willing to pay a 5G premium for their internal use.”

In addition to offering better prices for industries in which users are less convinced of the business benefits of 5G, communications service providers (CSPs) must create value propositions that entice customers to start 5G migration projects sooner, Gartner said.

Although most of the respondents think their organizations would be prepared to pay more for 5G, few (8 percent) expect 5G to deliver cost savings or increase revenues, the study found. 5G is seen principally as a network evolution (59 percent), and only secondarily as an enabler of digital business (37 percent).

The survey also found that respondents from the telecom sector are less persuaded than those in other industries that 5G will be a revenue enhancer. “They tend to see 5G migration as a matter of gradual and inevitable infrastructural change, rather than as an opportunity to generate new revenue,” said Mr. Fabre.

The survey found that almost half the respondents intend to use 5G to access videos and fixed wireless capabilities. More interestingly, though, the majority respondents (57 percent) believe that their organization’s main intention is to use 5G to drive Internet of Things (IoT) communication.

"This finding is surprising, as the number of deployed 'things' that need cellular connectivity won't exceed the capacity of existing cellular IoT technologies before 2023 in most regions," said Mr. Fabre. "And even once fully implemented, 5G will suit only a narrow subset of IoT use cases that require a combination of very high data rates and very low latency. In addition, 5G won't be ready to support massive machine-type communications, or ultra-reliable and low-latency communications, until early 2020."

This finding may also be a sign of confusion about 5G's applicability, as many proven and less expensive alternatives already exist for wireless IoT connectivity — use of Wi-Fi, ZigBee or Bluetooth, for example, would avoid the cost and complexity associated with cellular communications, Gartner said.

A degree of misunderstanding is probably also apparent in the expressed belief by a large majority of the respondents (84 percent) that 5G will be widely available by 2020. By contrast, CSPs' plans indicate that wide availability may not be achieved before 2022, the research firm added. 

Gartner predicts that, by 2020, only 3 percent of the world's network-owning mobile CSPs will have launched 5G networks commercially. "Although standards-compliant commercial network equipment could be available by 2019, commercial rollouts of 5G networks and services by CSPs before 2019 are likely to use pre-standard equipment," added Mr. Fabre.

CSPs' marketing organizations need realistic roadmaps for 5G coverage and typical performance, so that they communicate with customers accurately, Gartner said. They also need to publish clear 5G rollout plans for the years 2019 to 2021 to help innovators understand when and where 5G will be available for IoT applications.

Speaking at the 2016 Telecom Review Summit, Gary Heffernan, senior managing director for Communications, Media & Technology, Europe, Middle East, Africa and Latin America at Accenture, gave a thoughtful keynote speech about disruption within the Communications industry. He said: “There is no doubt that with the disruption and change that is going on around the industry, consumers have different and changing expectations of Communications Service Providers (CSPs).”

“I think the proliferation and explosion of devices, the explosion of consumption, and the explosion of experiences, creates a massive business upside for them, but only if they start to scale capabilities that will change their game on their customer experience,” said Mr. Heffernan.

“I believe in the need to inject new DNA – being digital capability - in CSPs’ organizations - a change that is absolutely critical as we think about the next generation of telecommunications,” Mr. Heffernan told delegates at the Summit. He added that there is “great opportunity” in what he calls “B2B 2.0”. Around the world, industries are crying out for innovation, and CSPs have the opportunity to empower enterprises with connectivity as the IoT starts becoming reality, he said.

According to Heffernan, the Communications, Media and Technology industries are providing the majority of game-changing technology and innovation. If we’re going to seize the “B2B 2.0” opportunity, he explained – whether that’s in SME’s or large corporates – we need more of the thinking that was highlighted at the Summit.

This includes collaboration with governments, creating the right investment climate, and becoming more pro-active in orchestrating the eco-system, whether that’s with start-ups or whether that’s with new innovators. These factors are “crucial” said Heffernan.

“In relation to the ongoing changes in the Communications industry, you can see that some European CSPs now believe that they’re going to be in the banking business,” Heffernan explained. “You look at companies like Orange, who have announced their intention to be a key player in mobile banking: they have already established “Orange Money” in the Middle East & Africa and now want to take what they’ve done there to other parts of the world.

“I think what’s happening with VOD and OTT is worrying for these industries, but I think CSPs need to be very thoughtful in what areas they’re going to play – and making sure they’ve got the vertical capabilities, the security capabilities, and the aggregator capabilities to be successful in whatever bets they choose.”

Discussing Dubai’s smart city transformation, Heffernan noted that there is clearly a “lot of vision” in the region – particularly with Dubai’s ability to attract talent. Right now, he said, the Communications industry needs leaders, not administrators: “Leaders that are going to have a vision and have the courage to try new things, and the courage to really transform their capabilities.” The capabilities of the last 20-30 years will “not be enough to transform any telecoms operator into a digital visionary.”

It’s absolutely crucial, Heffernan said, for CSPs to make the right investments in training and capability, and create the right environment for investment. “I truly believe that the key driver between success and failure will be talent,” said Heffernan. He also emphasized, “the ability to nurture, retain and unleash talent, even if it means challenging all the fundamental assumptions in your organization.”