How can 5G providers help industries become more resilient?

Authors

Tom Loozen

EY Global Telecommunications Leader

Fascinated by the positive impact of telecoms. Passionate musician. Enjoys educating himself on psychology, wine, sports, technology, arts and much more. Husband and father of three daughters.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.

8 minute read 30 Jul 2020

The COVID-19 pandemic has brought a new urgency to industry transformation. 5G can play a key role in driving resilience and innovation.

According to the EY survey, Maximizing the 5G opportunity for enterprise, sentiments toward the adoption of 5G vary by industry. Some industries are leading the 5G investment curve, while others are at a more elemental stage of their adoption cycle. Each industry has its own specific set of 5G-based IoT use cases in mind, while their attitudes to 5G suppliers and supporting ecosystems also vary substantially. Despite these differences, the crisis brought about by the COVID-19 global pandemic is placing a new emphasis on industry resilience and innovation, now and in the future. 5G can play a vital role in achieving this, but only if 5G providers become more vertical-specific in their interactions with enterprises.

Survey sample split by industry

Key success factors for 5G providers

The investment outlook for 5G is fundamentally positive, yet some industries are lagging the 5G investment curve as they struggle to identify specific 5G benefits. While many sectors already have a range of vertical-specific 5G use cases in mind, IoT rationales tend to favor efficiency gains rather than growth potential. At the same time, enterprises’ collaboration with service providers is at a nascent stage — unless the cooperation matures effectively, this could undermine long-term progress. Looking ahead, we believe there are four key steps 5G providers can take to help industries maximize the 5G opportunity.

1. Provide the right vision for verticals to take advantage of 5G

5G providers should provide a more compelling vision of what 5G can offer specific industries in ways that build on existing demands and address knowledge gaps at the sector level. This will involve focusing on industries where growth imperatives are less prominent in their existing IoT agenda and where 5G’s ability to enhance IoT strategies is less prevalent as a strategic priority.

Such attitudes are more likely to be present in sectors currently lagging the 5G investment curve. For example, only 10% of health care respondents are currently investing in 5G, when compared with 15% of all respondents. At the same time, health care respondents are less likely to view new use cases as a driver of IoT plans, and are less focused on adapting IoT strategies to cater for 5G. 5G suppliers should articulate a more compelling view of how 5G can reconfigure their industry by creating new experiences that build on existing IoT strategies.

5G and IoT attitudes among health care respondents

Other sectors are already considering 5G’s relationship to other emerging technologies. Forty percent of energy respondents cite this as a priority and, with 23% already investing in 5G, they are also leading in terms of 5G investment. 5G providers should adapt their approach for these customers, recognizing that those industries with a more mature view of 5G are already considering how it can be harnessed with other technologies, from artificial intelligence (AI) to edge cloud.

2. Sensitize your 5G offering to a post-COVID-19 world

The COVID-19 pandemic has brought a new urgency to industry transformation. Government and health care are both sectors where resilience and innovation are becoming more important than ever. 5G can play a unique role in delivering this, yet both industries currently lag the 5G investment curve while their levels of trust in telecoms suppliers and confidence in the 5G ecosystem represent areas of some uncertainty.

To improve the credibility and relevance of their offerings, 5G providers should be responsive to their customers’ changing prioritization of use cases in the wake of COVID-19. Ahead of the pandemic, government respondents were already alert to the role 5G could play in improving public safety and emergency response, with more than half singling out these use cases. However, more sophisticated 5G use cases in health care — for example, connected hospitals and ambulances — ranked further down the list of critical 5G-based use cases, cited by less than one in four respondents within that sector. These may now become more pressing needs in the current situation.

5G based IoT use cases for government and health care

Looking ahead, 5G use cases that can help industries cope with crisis scenarios will be top of mind. 5G service providers should double down on these types of use cases at the sector level, adjusting their service portfolios and adapting their value propositions accordingly.

5G use cases that can help industries cope with crisis scenarios will be top of mind.

Beyond sector specifics, COVID-19 is transforming remote working and employee well-being concepts at pace. In this light, all industries may become more engaged in 5G capabilities that enable new forms of customer or employee interaction, such as remote monitoring or virtual reality. At the same time, growing corporate focus on sustainability will likely impact the existing IoT agendas. 5G providers should take care to reflect these evolving organizational imperatives in their service offerings and customer dialogues.

3. Increase your 5G mindshare with vertical customers

Enterprises are keen for service providers to support them on their 5G journeys, and supplier attributes — such as service cocreation or customization — are becoming more important for some industries. For example, 34% of energy respondents view customization capabilities as a key vendor attribute in the future, up from 21% who consider it critical now.

However, 5G providers need to increase their mindshare with industry customers to capitalize on these demands. For example, telcos are generally the most trusted providers of IoT, yet three verticals — consumer products, government and health care — do not view them as the experts in this domain.

5G providers need to increase their mindshare with industry customers. Telcos are generally the most trusted providers of IoT, yet three verticals — consumer products, government and health care — do not view them as the experts in this domain.

IoT supplier trust - the vertical view

Given 5G’s status as more than a connectivity technology, 5G providers’ ability to act as catalysts for digital transformation is also becoming more important. Here too, telcos face challenges. Thirty-five percent of the respondents across sectors trust them as digital transformation experts, below information technology (IT) services companies, which lead with 43%. Technology and health care companies are the least likely to highlight telcos as digital transformation experts.

Ultimately, no single type of supplier has mature competencies in all the domains required by enterprises as they adopt 5G. In this light, 5G solution providers will need to form partnerships among themselves, particularly as end-to-end solutions capability becomes a more important customer need. This can help increase exposure to the enterprise 5G agenda — for example, while 69% of the organizations are currently investing or planning to invest in 5G, only half are currently engaging or planning to engage with telcos on 5G-based IoT.

Maximizing the 5G opportunity for enterprise survey

69%

of organizations are currently investing or planning to invest in 5G, but only half are currently engaging, or planning to engage with telcos on 5G-based IoT.

4. Build greater enterprise trust in collaborative 5G ecosystems

Increasing mindshare with enterprise customers and providing a vision for 5G that is sensitized to industry verticals and a post-COVID-19 world are critical. But the ability to directly collaborate with customers themselves is also becoming more important — our survey points out that 77% of businesses will prioritize vendors that can deliver 5G business outcomes as partners.

Maximizing the 5G opportunity for enterprise survey

77%

of businesses will prioritize vendors that can deliver 5G business outcomes as partners.

However, the fundamentals of a successful collaboration require attention. An analysis of industry verticals’ ecosystem attitudes shows that there is a positive correlation between their openness to ecosystem collaboration and concerns about 5G ecosystems. This tension could be damaging unless addressed.

Industry vertical attitudes to 5G collaboration

Solving it means focusing on those sectors where there is high openness toward collaboration — for example, government and manufacturing — and helping these industries build more understanding of what the 5G partner ecosystem can do for them. At the same time, other industries — for example, consumer products, health care and financial services — have less focus on collaborating externally, which may explain why they under-index on challenges relating to ecosystem engagement.

Explaining the fundamental advantages of 5G collaboration will be more important for these industry groups. Ultimately, open innovation principles will play a central role in the world of 5G-based IoT. 5G suppliers should recognize this and take steps to lead collaboration efforts across industry boundaries.

Summary

The EY study Maximizing the 5G opportunity for enterprise surveyed 1,000 organizations across eight industry verticals — automotive, consumer products, financial services, health care, energy, manufacturing, government and technology. The study explored the changing enterprise needs and attitudes as organizations evaluate the 5G opportunity. There are promising indicators of the critical role 5G will play in the next wave of internet of things (IoT), but optimism is accompanied by anxiety. To know more, take a look at the article, If you don’t trust your 5G vision, how will your customers trust you?

About this article

Authors

Tom Loozen

EY Global Telecommunications Leader

Fascinated by the positive impact of telecoms. Passionate musician. Enjoys educating himself on psychology, wine, sports, technology, arts and much more. Husband and father of three daughters.

Adrian Baschnonga

EY Global Telecommunications Lead Analyst

Lead Analyst with deep sector knowledge in technology, media and telecom, gained in professional services and business intelligence environments.