Written by Mark Cameron, CEO of W3.Digital, a Digital Transformation focused consultancy.
Across the world, major telecommunications companies are investing significantlyin the infrastructure to deliver 5G. The hype cycle has kicked into overdrive as industry spokespeople have started to wax lyrical about the value 5G will bring.
However, there is an emerging issue. My organization engages with telcos worldwide as well as many enterprise-level and government customers. We have observed a significant gap in understanding and alignment between the telcos and their customers.
Once the conversation gets beyond, “It’s going to be much faster,” the wheels start to fall off. The telco product engineers say, “Tell us what you want 5G to do, and we can build it.” The enterprise customer replies, “Tell us what it can do, and we’ll give you some requirements.” It becomes a stalemate.
So why is there confusion about 5G? What do telcos stand to lose by not addressing the issues holding them back?
What can history tell us?
Looking back, we can now see how transformative 3G and 4G were to how we interact with customers and do business. These wireless connectivity upgrades enabled organizations to access increasingly data-hungry features. In turn, this allowed new business models to be invented and to scale.
5G will have an even more significant impact as a technology enabler. It will bring massive improvements to network speed and the volume of data that can be captured and processed. But it is much more than just that. It is a highly secure and customizable network tailored to suit particular business needs.
Where will the value of 5G be realized?
The value of 5G will be realized by businesses first as customizable 5G slices and as private networks designed and deployed to address systemic, industry-wide issues.
Robotics is a good example. In industries like healthcare (robotic surgery) and logistics (smart-robots in the supply chain), 5G networks can enable robotics to be highly secure, connected to machine learning systems and have certain types of data processed prioritized.
As companies that work with 5G networks realize the first stage benefits, they will innovate. Then, the average consumer will benefit. We don’t know precisely what the consumer-facing 5G powered apps and business models will be. But we’ll know when they get here.
Why aren’t telcos ready?
Most telcos are structured to sell technology products and access to connectivity. The consumer proposition is somewhat simple: a monthly fee for access and incremental revenue improvements for value-added services.
Things get much more complicated in the enterprise and large-scale organization space. Large organizations have precise communication, networking and connectivity requirements. When it comes to 5G, there are significant competitive advantages, but it takes a consultative approach to understand how that may be realized.
This is where telcos run into problems. They are far more focused on selling products than collaborating and exploring uncharted ground. Many of their products are designed to solve yesterday’s problems, not the issues facing a global economy emerging from a pandemic.
Many telcos have also structured their sales teams to be highly account-focused. They often miss the need to identify sector-wide issues that can be addressed through customizing 5G.
If telcos can address these issues to focus on sector-level innovation on the back of 5G, the opportunity is immense. The margin they will be able to extract from sector-specific 5G offerings would far outstrip anything they would do on a customer-by-customer basis.
Suppose they cannot make the shift necessary. In that case, telcos will watch as other technology firms innovate on top of 5G, extract the majority of the value and be in yet another inevitable commodification cycle.
What do they need to do?
With these challenges in mind, here are three ways for telcos to help the market see the value of 5G.
1. Address the engineering speak.
• Most of the current marketing and sales focus on 5G is focused on “it is faster and has low latency.” While that may be important in the future, nobody cares right now.
• Find ways to talk about what experiences and improvements 5G can bring and speak about them in nontechnical terms.
• Work out how to engage with the leaders in the business who don’t have a deep understanding of how technology works, not just the technology buyers.
2. Develop strong thought leadership.
• The best way to do this is to develop and embrace thought leadership. 5G will solve tomorrow’s problems. But they need to be identified and described so businesses can start working on them today.
• If the thought leadership isn’t coming from within, look to engage externally, so there are rich veins of insight being identified all of the time.
• The market often looks to telcos for thought leadership around connectivity and technology. Step into that vacuum.
• Telcos must improve at working with enterprise customers to explore new issues and collaborate on solutions to leverage 5G capability.
• This needs to be much more than getting a product proof of concept up and running. It is about real collaboration and partnerships, even if it means sharing the benefit of the process.
• Telcos need to structure their sales and product organizations to have 5G at the center. 5G is more than just a mobile network now and will impact various areas of their customers’ business, such as replacing fixed network solutions and innovation areas such as edge computing. A new approach to the market is required.
• Telcos are engineering organizations at heart. But they could take a bigger role in innovation. They need to shift their cultures to be less risk-averse and more collaborative. It will take courageous leadership to make it happen, but courage has been required with every other innovative leap in history.
In short, the most impactful changes telcos need to make to realize the 5G opportunity are cultural. Technology plays a role, of course, but it will be how their people see the world, engage with customers and think about options that will make the most significant difference.