- The pandemic has prompted greater interest in 5G and IoT for 52% of organizations
- 64% of businesses are struggling to identify the right 5G strategy vendor
- 18% of organization respondents see telecoms as digital transformation experts
LONDON, 3 May 2021. Almost three quarters of enterprises (71%) believe that the COVID-19 pandemic has accelerated existing digital transformation plans, with 52% signaling greater interest in 5G and the internet of things (IoT), according to the EY Reimagining Industry Futures Study 2021. The study of more than 1,000 global enterprises finds that 74% of organization respondents across a range of sectors believe 5G will represent an opportunity to reinvent their processes over the next five years.
As organizations continue to build out their transformation plans, 65% of respondents believe that emerging technologies will play a critical role in their business’ recovery from the COVID-19 pandemic. However, most organizations are approaching their deployments with caution, with just 17% of enterprises currently investing in 5G. At the same time, another 73% plan to invest in three years’ time.
Sixty-four percent of enterprise respondents reported that they are struggling to identify the right kind of vendor to address their 5G strategy, while 74% of respondents stated that vendors must provide a more coherent vision of 5G to construct a robust investment case. Priorities stated by respondents when it comes to choosing a 5G vendor include that vendors must deliver business outcomes as partners rather than pure technology benefits (79%), and end-to-end solutions are a preferred supplier attribute (30%).
Telecommunications operators lack digital transformation expertise
The report finds that only 18% of respondents see telecommunications operators as digital transformation experts, a vital competence that must be improved as enterprises increasingly turn to 5G to drive transformation agendas forward. The majority of respondents see IT services and application/platform vendors (51% and 65% respectively) as digital transformation experts.
When asked what their top 5G priority was, 36% stated it was around exploring 5G’s relationship to other emerging technologies; while 5G’s integration with existing technologies and processes was seen as the number one challenge, cited by 38% of business respondents.
Tom Loozen, EY Global Telecommunications Leader, says:
“Organizations understand the importance of 5G, IoT and other emerging technologies; however, the capability gap among suppliers is a key concern. Telecommunications operators should take steps to improve their transformation expertise, recognizing that businesses want suppliers to act as partners that provide end-to-end solutions. For this to happen, operators should explore new ecosystem positions while focusing on the opportunities for business model overhaul that 5G can enable.”
Asia-Pacific pulling ahead in terms of current and future investments
5G investments among organizations in Asia-Pacific are further ahead than the Americas and Europe, with 78% of organizations currently investing or planning to invest within the next two to three years, compared with 71% of organizations in both the Americas and Europe. Meanwhile, 27% of Asia-Pacific organizations signal significantly greater interest in 5G and IoT since the COVID-19 pandemic, compared with 13% and 15% in the Americas and Europe, respectively. Overall, the study finds European enterprises are lagging compared with the other regions in terms of recognizing 5G’s potential: 70% believe that 5G will enter the heart of their business processes, compared to 80% in Asia-Pacific and 75% in the Americas.
Adrian Baschnonga, EY Global Telecommunications Lead Analyst, says:
“There is an obvious hunger and interest in 5G and IoT across all businesses. It is clear that service providers should reposition themselves as collaborators to their customers, but there is no one-size-fits-all solution to unlocking the benefits of 5G. Service providers should take care to educate and inspire enterprises in Europe that may be in an earlier phase of adoption or less aware of the pervasive opportunities represented by 5G and IoT. Meanwhile, organizations that are more focused on 5G’s role in pandemic recovery require a different approach and service providers must be ready to refine their 5G propositions at pace in order to cater for fast-changing use case needs.”
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About the survey
The EY Reimaging Industry Futures Study 2021 was conducted through an online study of 1,012 global enterprises between February and March 2021 and focused on understanding perceptions around 5G. Respondents were from 11 countries: U.S., U.K., France, Germany, India, Australia, China, Japan, Switzerland, U.A.E and Austria, and covered an array of industry markets including technology, consumer, energy and government.
To read the study in full, and for the latest insights from across EY Technology, Media & Entertainment and Telecommunications, visit ey.com/tmt.