Press release

16 Feb 2022 London, GB

UK enterprises more defensive on 5G, prioritising real-world benefits over sophisticated use cases

45% of respondents favour process optimisation 5G use cases

  • 45% of respondents favour process optimisation 5G use cases
  • More than half (56%) to invest in 5G within three years, but confidence on implementation stalls
  • Pressure on traditional models: 71% drawn to private networks to support 5G implementation

The third edition of the EY Reimagining industry futures study reveals that enterprises are looking to 5G to help alleviate immediate business pressures brought by the COVID-19 pandemic and related global events. Advanced 5G use cases featuring virtual or augmented reality are cited by just 22% of UK respondents as a key application, compared to 49% who favour process optimisation. 

Defensive approach to 5G

The findings indicate a defensive approach toward 5G, with enterprises seeking to bolster business resilience, meet corporate priorities and respond to stakeholder demands.

A range of external factors underpin this trend. Eighty per cent of respondents say the impact of the global health crisis is driving their interest in 5G, up from 62% in last year’s study. Seventy-nine per cent say supply chain disruption has galvanised their 5G pursuit, while 68% cite the focus on environmental, social and governance (ESG) issues. However, there is some way to go in realising these ambitions: 40% are concerned that 5G and internet of things (IoT) vendors’ current use cases do not meet their business resilience and continuity needs, and 51% do not think their sustainability goals are addressed by today’s use cases.

Praveen Shankar, EY UK and Ireland Technology, Media and Telecoms (TMT) Leader, says:

“While the hype around how 5G low latency could power the metaverse or commercialise augmented reality continues to build, the study shows that the technology has moved out of its infancy, with enterprises’ interest now fuelled by real-world challenges. This should be applauded, with 5G following the same innovation cycle of other transformative technologies. Sophisticated use cases will become important in time. More pressing, however, is the need for 5G providers to adapt their solutions to the practical demands of industry 4.0 today.”  

5G spending intentions are healthy, but confidence stalls

5G leads all other emerging technologies tracked in the study in terms of future spending intentions, with more than half (56%) of UK businesses planning to invest within the next three years. 

However, despite this promising outlook for adoption, enterprises are less confident than before that they can deploy 5G to the best of their ability. Only 18% are very confident that they can successfully implement 5G (down 4% year-on-year). This is compounded by enterprises’ poor understanding of 5G’s relationship to other emerging technologies. Cited by 43% of respondents, it ranks as the biggest internal challenge to 5G perceptions.

Adrian Baschnonga, EY Global Telecommunications Lead Analyst, says:

“There are still fundamental anxieties around how 5G works alongside other emerging technologies. 5G providers should take this on board and adapt their customer discussions accordingly. By educating enterprises on how 5G can be harnessed by other emerging technologies, service providers can boost enterprise confidence in their 5G deployments.”

Growing appeal of private networks as telcos battle credibility gap

The study further finds that UK enterprises are becoming increasingly receptive to 5G solutions delivered through disruptive business models. Seventy-one per cent of enterprises are interested in using private networks to support implementation of 5G and IoT use cases, and 66% are interested in buying 5G through an intermediary. 

Meanwhile telcos face a significant credibility gap. Only 13% of enterprises view them as digital transformation experts, down from 19% the previous year. Conversely, 33% trust network equipment vendors as favoured digital transformation experts – up from 13% last year.

Praveen Shankar says: “Disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure and more agile go-to-market strategies are essential in a 5G-IoT world. Telcos should take steps now to ensure that they can meet enterprise demand for private network deployments.”

Ecosystem collaboration continues to be central to the enterprise growth agenda

Sixty per cent of respondents state that they already collaborate with other organisations as part of a business ecosystem. However, the findings indicate that businesses are being bolder in their approach to partnerships, with 38% seeking vertical partnerships with companies in other sectors (up from 20% last year), and 65% are prioritising suppliers that can offer ecosystem relationships as part of their 5G capabilities. 

At MWC Barcelona 2022, EY will be exploring how connecting industry ecosystems can help support technology-based transformation, build resilience, and create long-term value. Find out more here.