Why only digital service providers will reap the full potential of 5G
Digital leaders like Netflix, Google, Alibaba etc. are setting a new benchmark for how consumers and enterprises engage through digital ways and channels. Digital is becoming the norm and telco’s feel they desperately need to catch up. Today most operators have initiated digital transformation programs to move from a pure connectivity service provider to a digital service provider.
At the same time technology is evolving with early deployments of 5G trials. Enhanced Mobile Broadband (eMBB) and Fixed Wireless Access (FWA) are the first use cases for 5G but we also see big industry potential with 5G that operators can capture.
By studying the ICT spend in 10 industries and over 200 5G enabled use cases, Ericsson’s latest research show that the industry digitalization can be a 619 BUSD opportunity by 2026 for operators with the right strategies in place.
Last week myself and Erwin van Rijssen from Ericsson had the opportunity to discuss this and more during the Mobile World Live webinar in an exclusive interview by GSMA’s Justin Springham. Please take 40 min of your time to watch it on demand here:
5G and digitalization—two parallel transformations
5G and digitalization are two business realities faced by operators today that determines the operators’ CxO agenda. They are both essential to capture the potential that comes with industry digitalization. 5G will be deployed to speed up the network, handle the large traffic growth (in 2023 we will have 8x more traffic in the world. Source: Ericsson Mobility Report) and enable new use cases in need of critical communication.
Digitalization is all about automation in the OSS and the Core networks with introduction of new technologies like virtualization, orchestration, networks slicing as well as digitalization of BSS for the customer journey to meet the needs of the digital consumer and enterprises.
Online, real-time customer experience
Digitalization starts with telecom operators ambition to give their customers a great experience that is online, multi-channel and always realtime. This is a struggle today as many operators are depended on their legacy systems, often unable to support the move towards a digital service provider role.
Our recent research by Ericsson Consumer and Industry Lab show that consumers are frustrated by their interaction with their service provider. On average it takes 2,2 attempts and over 4 days to successfully complete and interaction and this of course has a negative impact on satisfaction.
The same study show that digitalization is lagging behind as consumers feel current digitalization efforts are just a mirror of the analogue world: 46% of smartphone users think their telecom service provider hides behind "bad" technology, such as do-not-reply emails, automated replies and time-consuming and impersonal Contact Us forms.
Looking ahead telecom operators will be much more data driven and proactive with their subscribers. Our bet is also that operators will be much more relevant beyond the consumer segment, with 5G and digital being key enablers. With industry digitalization in sectors like manufacturing, utility & energy, public safety, transportation etc. The business potential that operators can address can be up to 619 BUSD by 2026.
To capture this business potential, telecom operators need to decide where in the value chain they want to play, what investments to make that are relevant cross industries and last but not least; make sure that the 5G and digitalization ambitions gets on the same agenda.
When digital meets 5G, the telecom industry delivers on its full potential.
Watch Mobile World Live webinar in an exclusive interview by GSMA’s Justin Springham with Eva Hedfors and Erwin van Rijssen!