Key steps to capitalize on the 5G opportunity
The promise of 5G will give telecom operators a competitive edge over the growing challenges from over the top (OTT) players. To capitalize on the new technology, they need to take essential steps from both business and technical perspectives. The ability to offer customized connectivity to support differentiated services over the more agile and flexible virtualized network, buoyed by network slicing and mobile edge computing, will be transformational. However, that requires the support of substantial fiber, sophisticated cloud and analytics capabilities, and transformed support systems. After all, 5G is a convergence play, and poised to change the industry landscape.
Monetizing 5G requires new business model innovation and cross-sector partnership in the more machine-centric environment. Imitating an OTT model has proven to be unsustainable as operators have different DNA against technology companies. They should instead leverage their strengths to engage in deep service innovation. To a further extent, the need for acquiring non-core assets, technologies or capabilities to offer new and differentiated services such as the IoT will become an important driving force to industry consolidation.
While the outlook is bright, 5G will not completely change and disrupt the telecom landscape or the industries in the short term. Operators should be realistic and learn from history to avoid over-commitment. They have to work out their strategies for 5G and move fast to deploy new services. Capitalizing on their 4G investment is important since LTE is expected to remain dominant in the fast-growing market for the next decade.