Aug 30, 2021
Bengt Nordstrom

Could Industrial 5G be the Key to the Future of CSPs?

SupplyChain
Accenture
Northsream
Manufacturing
Bengt Nordstrom, CEO of Northstream (part of Accenture), on the importance of industrial 5G for the future of CSPs

The communication service industry is at a crossroads. While providers (CSPs) have played a big role in underpinning our connectivity needs at home as they shot up during the pandemic, revenues have stagnated. This can be attributed to commoditisation challenges and competition. It’s a similar situation to what happened with 4G. A massive upgrade from 3G, but it didn’t in most cases translate into revenue growth for many of the same reasons.

Why 5G and CSPs?

While the future may seem bleak for CSPs, then, the reality is far from the case thanks, in part, to the many opportunities that 5G presents. With the development of networks towards software-defined 5G and the emergence of edge computing to deploy key horizontal software capabilities, CSPs are well-positioned to expand their presence in the industrial market. This is because of their capabilities to underpin the complex ecosystem of new digital offerings that industrial companies are in need of. 

With increased connectivity attractively combined with edge computing, 5G will be the game-changer that 4G was meant to be. Rather than being a connectivity provider and allow over-the-top (OTT) providers to grab the value extra connectivity brings by creating added-on services as they did with 4G, CSPs can be the intelligent service orchestrators. Through software-defined 5G and the edge’s ability to enable key horizontal software capabilities, this means CSPs becoming the lynchpin that delivers personalised capabilities to industrial enterprises and enables data to be collected, analysed and actioned locally, all in real-time. It will fuel the next generation of powerful industrial IoT use cases and have CSPs sitting at the heart of it.

Partner up and present your case

Another good reason CSPs are in a prime position is that they’re seen as integral to the future of vendors also looking to crack the industrial enterprise market. These vendors, such as mobile network equipment providers, know they don’t have the capabilities to go it alone, so are reliant on CSPs to make it happen.

Much like the vendors though, CSPs must realise they can’t go it alone. While the industrial sector is aware of the need to digitally transform itself, the clamour for 5G-enabled connectivity is not there. This is simply down to a lack of awareness about the capabilities of 5G-technology and solutions. 

In order to convince the industry to invest in and adopt 5G, CSPs must present an enterprise go to market solution. This means partnering with tech businesses, consultancy firms and systems integrators to create a solution that encompasses all needs. It’s beneficial to all sides too. While CSPs provide the connectivity, the tech companies, for example, provide the edge solutions that are built for 5G. From hardware and security, through to integrating technologies like artificial intelligence and data analytics, as well as adopting the cloud for scalability and flexibility, CSPs can create that full package enterprises are looking for. Partnering will also enable CSPs to delve into different sectors, creating vertical use cases that will increase revenue channels.

These use cases include the realisation of the smart city. In order to make a smart city work, it needs solid connectivity and wider infrastructure development. Currently, smart cities have many obstacles to overcome, including legacy issues like older buildings that don’t support connectivity. In addition, cities are a mixture of public and private infrastructure, meaning laying a one size fits all solution wouldn’t work. By partnering with its ecosystem, CSPs can present bespoke solutions suited to clients’ needs on everything from usability to price as may be a key factor with the public sector; this can enable smart cities to be fully realised, with CSPs as the orchestrator underpinning everything.

Innovation should never stop

While CSPs should be thinking about how to conquer the industrial 5G market, they must also remain considerate of the future and long-term, opportunities. 5G has been an incredibly successful rollout across the world and is predicted to cover one-third of the world’s population by 2025. But developers will not stop there with work already underway on 6G and beyond. It’s a natural progression and one that will continue in order to match the world’s appetite for producing data and the need for increased connectivity.

Lessons should be learned from the rollout of 4G, where CSPs underestimated the ability of OTT players to provide value-added services. With 5G in its infancy and 6G appearing soon over the horizon, it’s vital the CSPs jump on this now. In a world where eSIMs are making it easier for enterprises to switch providers easily, individual CSPs have to show their worth or face getting surpassed by rivals.

The industrial 5G market is there for the taking for CSPs, as no one player has that full gamut of end-to-end offerings, but they have to act quickly before the market consolidates and they’re left looking in from the outside. Fortunately, they are in a unique position to establish themselves as the lynchpin in that ecosystem. To achieve this, though, a shift in mindset is essential. Taking a connectivity and wholesale approach in 5G or becoming a re-seller to the edge is no longer enough and will see the continuation of the stalled growth they’re seeing today. Get it right through their approach, mindset and partner ecosystem and they could see revenues escalate like never before and become that integral player for decades to come

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