Beyond consumer-facing 5G services like fixed wireless access and step-changes in subscription plans—which are certainly making operators new service revenue—so far 5G monetization has fallen a bit short of the world-changing, trillion(s)-dollar hype around the sweeping digital transformation of industries.
Based on a panel discussion at the 5G Monetization Forum on how to create win-win scenarios for operators, their partners and their customers, experts see a path forward where 5G facilitates new applications and business models, but it relies heavily on a strong focus on use case development, the right network beyond the just the RAN, and perhaps a bit more abstractly, a little bit of optimism.
Going beyond B2C to B2B2X
As mentioned, operators are making new service revenue off of 5G-enabled fixed wireless access serving home broadband. In the U.S., T-Mobile US and Verizon are facing-off in this market. The two-fold goal here is to acquire and bundle new customers, while putting pressure on the cable companies that have traditionally dominated home broadband.
“Fixed wireless access is deeply unsexy and unexciting,” Volt Active Data Head of Product Marketing David Rolfe said in response to a question from moderator Eugina Jordan, the Telecom Infra Project’s CMO. “Nobody gets in front of 80-foot-wide screens at conferences and gets cheers for shouting about FWA,” Rolfe continued. “But around a third of the world are only getting access to proper broadband internet now because of it. And that’s a big deal…Don’t underestimate the importance of FWA, and also don’t underestimate the importance of weird, evolving use cases that nobody ever thought about.”
For more on 5G FWA, read “How can operators monetize FWA? It requires ‘surgical precision,” and “eMBB and FWA lead operators’ 5G monetization efforts.”
Appledore Research Consulting Analyst Rahul Atri, formerly of Rakuten Mobile, suggested operators ask themselves who the consumers are to understand the how of 5G monetization. “Do we need to explore opportunities beyond B2C, go into B2B2X. And probably the models of engagement would change. The partnership ecosystem..might change. The way we have to create solutions, it might change.”
He continued, giving the example of Airbnb generating revenue from landlords and tenants by providing an intermediary platform. “I think telcos need to reinvent to make the most out of 5G. It might be a platform, it might be services, it might be use cases, but I think more than connectivity. The time is right now for selling use cases…[But] challenges do come with opportunities.”
While Rolfe emphasized the importance of simplistic use cases like FWA and left the door open for innovative moonshots, he did acknowledge the reality of 5G monetization today. “I also do empathize with anybody who’s investing in 5G and wondering where the revenue’s going to come from…Eventually the bandwidth will get used. I’ve never seen a case where it didn’t. It’s just what it gets used for—the miraculous use case hasn’t sprung into being…but I’m apparently optimist about it. I am hopeful for the future.”
Technology is the easy part; it’s about people and use cases
There’s a refrain around 5G for enterprise; it hits notes around hiding technological complexity and selling business outcomes that solve real-world problems. Going another layer into that business/tech dynamic, it’s also important to consider the people involved—an enterprise probably isn’t going to materially invest in a technology stack that it’s un- or underprepared to fully use.
Atri said, “Technology is the easiest thing to solve, gets solved by itself. People are the most complex. They need to be upskilled and look at all these things with a little more broadness. Ultimately every telco, probably every service provider, needs to think about a platform which brings collectiveness and collaboration, so that you don’t buy pieces of a solution and then combine them through APIs and say this was transformation and automation.”
In the context of 5G monetization, he described the right approach as including the right people, platform and processes with an eye on the flexibility needed to be future-ready. “Wait for the right opportunities. Even go out and say, ‘I have a platform which can support you tomorrow.’”
Rolfe touched on 5G monetization efforts that arise when operators are able to offer on-demand network slicing capabilities, and also characterized security as an increasingly important differentiator. Reiterating his point on how unexpected use cases are making a commercial impact, Rolfe discussed the broadly-applicable deployment of automated guided vehicles being monitored and controlled by 5G-connected cameras.
“This is why I made my comment about being optimistic,” he said. “We did not foresee that one of the big things we’d be hearing about…was a use where CCTV is driving robots which can’t see around a factory floor…Nobody here anticipated that. And that’s my point—that these things are emergent…Normally, you know, you laugh at people who say, ‘Well, if you built, they will come,’ but this may well be a case where we built it and they started to come.”
So what does this degree of (relatively) rapid technological and business change mean from an operator’s perspective? Looking at the road ahead, Telenor Vice President and Head of Asia Strategy Danny Han Seng Foong segmented CSPs into three buckets:
- “They are actually more of a lean-operating telco…Operators are clearly taking a network 5G leadership position or fixed/mobile convergence approach in this. It’s a traditional approach on data monetization but, I think, in certain sectors and also the ecosystems of certain countries, it makes sense.”
- From lean telco to digital telco; “this is where they position with partners in the local scene, on a regional level working with them to offer services beyond connectivity.”
- After being a digital telco, the move is to a platform play. “This is a little bit more bigger, and I’ve seen some fo the bigger telcos, for example in India Reliance Jio, is taking this position…You do see that being reflected in terms of not just monetization but also valuation in terms of some of these digital assets they bring to the table.”
5G is just one part of the equation
Back to the refrain about solving business problems and simplifying telco solutions for enterprises without telco expertise, back to thinking about use cases and understanding that 5G is one part of larger technology set that needs to be developed and managed by people, and back to this idea of telco reinvention—not selling connectivity but selling a platform for innovation.
“I think the crus of the matter is it’s not the whole or it’s not the SIM card or a connectivity play anymore,” Atri said. “It’s about the use cases…Telcos are obviously onto the path of creating platforms, but obviously they cannot create all the things they need. [They need] partners.”
Another important vector of 5G monetization that also intersects the goal of enterprise digital transformation is private 4G and 5G networks. Foong cited figures showing a concentration of private 4G/5G in the China, Germany, the U.K. and U.S., the first of which has tight cohesion between operators, industries and government, and the last three of which have dedicated spectrum for enterprise use.
In terms of vertical adoption, Foong called out traction in manufacturing, transport, mining, utilities and the public sector. “What strikes me when I look at this is how the ecosystem…took the leap in deciding what were the use cases and the use cases were very practical, simple…Use cases that actually helped them to solve the problems they were trying to fix…That is a good example of monetization.”
Rolfe gave the example of a video-based, cellular-enabled system for pedestrian/vehicular traffic monitoring and management that also needs AI/ML—used “in a non-magical way”— and localized computing resources for rapid decision making. “When you say edge, it’s not just a computer in a building…We had that in that ‘70s. The distinction is here data has been gathered and the first level of analysis is done at the edge…a very simple way to actually establish what’s going on and then that information gets sent up to some kind of controlling function, some intelligence, which figures out what you want to at an execution level.
He gave another example of a broken dishwasher. The manufacturer can remotely look at the machine and potentially determine the problem, and provide a fix, without sending an expensive repairman out to someone’s house. In the case of a recall, that could also be managed centrally based on data generated by the distributed machines. This, Rolfe said, is something that benefits manufacturers by saving time and money, and can also be positioned as a benefit to the consumer. “This is genuinely new stuff which nobody thought up until they saw it and then did the classic black swan thing and said, ‘Ah, well, that’s obvious. We should have know that all along.’ And so again, nobody, when we create all this wonderful technology out at the edge, we didn’t see it and it’s coming.”
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