6 opportunities to optimize American enterprise innovation with 5G

Instead of focusing on industry-specific vertical use cases, our new report Connecting American enterprises to the 5G innovation platform highlights horizontal opportunities with broad applicability across industries. An attractive way to optimize 5G is to understand the advantages and disadvantages of 4G, and take these learnings to help us maximize the next level of mobile networks. This way, we can gradually embrace 5G for advanced use cases.

American enterprises were big winners in the 4G arena

The American 4G arena was vibrant in the past decade. CTIA and Recon Analytics found USD250 billion in economic value was created by 4G usage through devices, mobile advertising, apps and content generated in America [1]. This success was enabled by early access to nationwide 4G infrastructure on home turf, which unlocked and scaled new innovations and eventually expanded to global success. 

When it comes to 5G in America, BCG and CTIA have estimated the financial potential to be USD1.5 trillion this decade [2]. American enterprise innovations on top of 5G play a central role in achieving these numbers at home first and then expanding into a significant global opportunity. Major differences for the 5G cycle are the 180 networks service launches in 72 countries, the large national agendas for economic growth built around 5G, and stiff global competition.  

American enterprise innovations can build on top of cellular connectivity

A fundamental driver for American enterprises to embrace 5G early comes from an innovation agenda affecting their own offerings and cost structures. McKinsey estimated in 2020, approximately one-third of 5G potential was coupled to revenue growth, and two-thirds to cost savings [3]. Additionally, the innovation opportunity for 5G is different from 4G, as it is shaped by various disruptive technology shifts, not just 5G by itself. 

4G represented a clear landscape centered around one universal device (smartphones), universal connectivity (4G with Wi-Fi offload), and apps in centralized public and private cloud data centers. The monetization of 4G opportunities focused on volume-based traffic charges for connectivity, a revenue share between app developers and app stores, and mobile advertising supporting freemium services. 

5G represents an innovation platform, the largest in history, but it is not 5G alone that makes it exciting. It is 5G’s connectivity potential to a portfolio of disruptive technologies. 

5G devices are already expanding beyond smartphones and fixed wireless access terminals to new segments in-vehicle and IoT use cases. Centralized cloud capabilities are being pushed to the edges of the internet and CSP and customer networks. Data is generated and captured in devices on one side of the 5G network and processed by AI on the other side. The metaverse will be enhanced, as virtual, augmented, mixed and extended realities are untethered from nearby desktop computers and processed at the edge.  

In this report, we take a deeper look into the innovation landscape defining 5G and how enterprises can take advantage of the innovation potential. 

When is the time right to embrace 5G, and where do we start?

Few argue about the potential, but many are less sure about when and where to start. This hesitation stems from a combination of the broad potential and the initial hurdles that prevent opportunities at scale. 

Three common hurdles that have held back enterprises from adopting 5G at scale in 2021 include:

• Mid-band spectrum, which consistently delivers faster speeds, was recently made available. Users have seen inconsistent 5G experiences through low-band spectrum (travels the furthest) offering coverage over long distances and high-band spectrum (enables blazing fast speeds) witrh availability limited to specific use places. With mid-band spectrum a consistent 5G experience is just now being enabled.  
• The search for the perfect use case and associated business cases have resulted in extended periods with pilot cases in sandboxes – a learning journey where the first applications and devices are getting ready to scale.
• Lack of enterprise-class data plans, that are flat rate or no-downshift or overage plans, plus maturity of new business models for private networks and network slicing.

The good news is that help is on the way for all three of these issues. C-band and additional auctions will deliver the needed bandwidth, some data plans are evolving, and the use cases and the enterprise router device ecosystem is starting to catch-up.

A pragmatic approach starts with applying use cases that already effectively work with 4G and elevating them with 5G. To unlock the innovation potential in steps, enterprises should initially focus on mobile broadband and fixed wireless access applications, which three-quarters of all announced 5G devices to date support.

Six opportunities to boost American enterprise innovation 

American enterprises wanting to be the first to benefit from 5G’s advantages can pursue one or several of the following six opportunities – all of which offer the benefit of building experiences with 5G connectivity and layering 5G innovations on top.  

5G-based personal communication for all

Half of all 5G devices announced to date are smartphones [4], a device category expected to dominate the 122 million 5G subscriptions of Ericsson projects which will be in North American by the end of 2022.

5G smartphones offer your staff improved video communication capabilities, where video communication is the new normal even outside the home office. Universal 5G smartphone adoption further allows you to embrace new productivity and back-to-the-office applications early. 

Bringing-your-own-device models and prolonged 4G-only policies could prevent you from taking advantage of 5G for another smartphone refresh cycle, currently 2.52 years for American enterprises, according to Statista [5].

Flexible work outside the fiber footprint

Working from home was pushed on us by the pandemic, and often resulted in limitations like staff members not having fiber access at home. A quarter of all announced 5G devices are fixed wireless terminals or battery-powered pocket routers, and the expansion of 5G in the mid-band spectrum is a game-changer for remote and hybrid work. 

Plan for a future where work is not limited to two endpoints – one office and one home – but rather a flexible hybrid model, where you can work from anywhere, including temporary homes, vacation spots and on the go. Some of your team might already be familiar with this from their 3G pocket router days 15 years ago. But with the availability of in-home routers that take advantage of 5G, working from anywhere without sacrificing security or performance is now an option to support the hybrid work model.

Leaving a portion of your team struggling with poor digital subscriber line (DSL), cable broadband options or waiting for fiber in areas where 5G is available is a pain you can eliminate.  

Ultra-mobile workforce connected with 5G

Thirteen years ago, Lenovo, Ericsson and AT&T introduced laptops with integrated 3G – a pioneering move at the time. But last year, the pandemic pushed cellular-enabled computers into eight-figure volumes for the first time with half of the volume sold in North America [6].

Tablets, laptops and notebooks with integrated 5G are attractive for the ultra-mobile share of the workforce, where the nomadic model in the previous opportunity is not enough. Sales and service professionals, employees without an office and professions like construction workers all belong in this category.

There is also a class of field worker that is vehicle based where they can connect via a 5G router installed in the vehicle and use WiFi to access it (first responders, for example).

Postponing the introduction of integrated WAN capabilities in the personal computing environment affects team members for a hardware complete refresh cycle. Waiting for another three to four years ( a typical refresh cycle) is a long time when you are in transition to a hybrid work model.

5G for wireless branch office connectivity

American enterprises with many branch offices are familiar with hybrid WAN solutions, a primary fiber access and fixed wireless 4G for failover – a market segement defined by Cradlepoint. 

5G for wireless access to branch offices opens new opportunities. For example, increasing video traffic loads can motivate an upgrade from 4G to 5G. A shift to 5G can also bring the performance of the failover access closer to the primary. For some branch offices, both the primary and failover access can be 5G based. 

As more traffic flows within a branch and the primary wired connectivity gets faster (thanks to broadband internet connections), customers need a fast cellular backup link to reduce the speed disparity and minimum reduced application support when on failover.

When the option is to wait for two redundant fibers, many branches are better off with a hybrid WAN (fiber and 5G) or two fixed wireless 5G access links – Day-1 in areas with 5G coverage in mid or high band. 

Unleash 5G innovations at major campuses

Mobile service and technology providers’ 5G labs have hosted the first wave of 5G innovation collaborations. This model will continue, but for many enterprises and research universities, it’s simply not enough. 

Campus-wide 5G networks supercharge your 5G innovation potential. All students or employees can be innovators and digital pioneers of the innovation before a launch – a new opportunity is applicable to enterprise headquarters, major R&D sites and research universities. 

Not having access to 5G networks on campus limits your innovation potential, and each year of delay is a year of lost learnings.  

Introduce 5G for industrial applications

The sixth and final opportunity is the broader Industry 4.0 opportunity. Today, the operations technology side of an enterprise is wired or supported by insufficient wireless capabilities. 5G is a game-changer for mines, factories, warehouses, logistic hubs, and transportation in all steps of the supply chain. 

The Ericsson USA Smart 5G factory, one of the first seven lighthouse factories in America, and represents crucial pioneering work using 4G and 5G in industrial applications. Consider an innovation journey following a three-step model. Start with one pilot factory, warehouse, or hub; scale it to other sites in your company; and embrace use cases piloted by other companies or industries. 

There is an opportunity to build more resilient and sustainable supply chains, where secure, reliable and available 5G connectivity plays a key role. These initiatives enable strong supply chains close to customers.

2022: A 5G moving year for American enterprises 

American service providers are investing USD30 billion annually in cellular infrastructure, and currently reach more than 300 million people in low-band spectrum for coverage and 200 million in mid-band for performance. Furthermore, over 100 city-service provider combinations are served with mmWave technology for ultra-high performance, making powerful 5G use places possible.

In this highly competitive global economy, American enterprises cannot expect to experience the same years of time-to-market advantages against other defining markets that were seen with 4G. 

As outlined in this blog post and our report, 2022 can be a pivotal year (moving year in golfing terms) for American enterprise innovation to benefit from 5G. Not for just one of the described opportunities, but for several. Explore these opportunities to ensure your company is connected to the 5G innovation platform and start the journey at home before scaling globally. We have an exciting year ahead of us.

[1] "The 4G Decade: Quantifying the Benefits.” CTIA. July 2020. 

[2] “5G Promises Massive Job and GDP Growth in the US.” BCG. February 2021. 

[3] "Connected world: An evolution in connectivity beyond the 5G revolution.” McKinsey & Company. February 20, 2020. 

[4] “GSA: 1000th 5G Device Announced.” Global mobile Suppliers Association. October 2021. 

[5] “Average lifespan (replacement cycle length of smartphones in the United States from 2014 to 2025.” Statista. 

[6] Strategy Analytics: Pandemic drove sales of 4G and 5G-enabled PCs to new record in 2020

Want to know more?

Connecting American enterprises to the 5G innovation platform

Read Peter’s previous blog post, Closing all American digital divides this decade.

Here’s our smart factory of the future: let me show you around.

Read more about 5G.