Telcos are making a mess of enterprise 5G, says new research

A new report from Omdia and BearingPoint/Beyond says operators have taken the lead on just a fifth of 5G projects so far.

Iain Morris, International Editor

May 5, 2020

4 Min Read
Telcos are making a mess of enterprise 5G, says new research

Supercharging smartphone connections with higher-speed technology is so passé. What really excites your visionary telco is the opportunity to sell 5G services to business customers. Besides, operators have already lost the consumer to the big beasts of tech. If there is any additional money to be made from 5G, it will have to be in the enterprise sector.

Unfortunately, operators are not doing a first-rate job of appealing to enterprise customers, according to new research carried out by analysts at Omdia, a sister company to Light Reading, and commissioned by BearingPoint//Beyond, a consulting firm and developer of business support solutions. An "innovation tracker" developed by Omdia reveals that most 5G projects in the enterprise market are not being led by communications service providers (CSPs).

Figure 1: Different approaches in Omdia's enterprise 5G innovation tracker Source: Omdia Source: Omdia

It's a "worrying trend," according to the analysts. "The enterprise opportunity is already slipping through the fingers of CSPs," they say. Indeed, a graphic published in the first few pages reveals that only about a fifth of projects are "CSP-led." In the most popular approach, accounting for about 40% of projects, vendors take charge and order CSPs simply to fetch the luggage (provide connectivity). For another one third of projects, the enterprise takes a DIY (do it yourself) approach, according to research. Again, the CSP is assigned the dull, bag-carrying role.

The message that most operators just aren't very enterprising, it should be noted, is one BearingPoint//Beyond has repeatedly pushed. Its software tools are largely designed to help service providers become better "platform" players, offering a range of digital services to business customers. The research findings handily support its narrative.

But that does not invalidate them. The tracker built by Omdia examined numerous 5G deals, and the report is rich with examples of different project types, from a recent Volkswagen RFP (request for proposal) that seems entirely to omit telcos to a mining project in Peru that identifies Telefónica as a "digital provider."

So where are CSPs going wrong? One problem, says Omdia, is a lack of traction with enterprise decision makers in some areas. Your typical enterprise, essentially, would not reach out to a CSP for applications like physical security, asset tracking and industry-specific machinery. For telcos, the answer is to form partnerships with companies that serve those various needs – to be a kind of matchmaker between the enterprise and different application specialists.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

That's not the only issue, though. CSPs tend to be obsessed with 5G technology features such as network slicing, latency and bandwidth, asking what opportunity these can address. A more sensible approach would be to ask the customer about its business problems and then see if 5G can help. Working more effectively with customers is critical, say the Omdia analysts. Sometimes, accepting a secondary role in the ecosystem may be necessary, especially if the alternative is to be overlooked.

It's hard, reading this report, not to think of the CSP as a kind of social misfit, tinkering with his train set in the bedroom. Perhaps we will all end up like that after the COVID-19 pandemic, but a theme running through this report is that deal-making and partnerships are so much more important than sub-ten-millisecond latency and gigabit-speed connectivity. On the technology side, there won't be much to distinguish operators all buying their 5G goodies from the same two or three vendors. The big differences will be cultural.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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