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5G presents operators an exciting opportunity to capture revenue from a host of new markets, but they will need to act decisively if they are to recoup the technologies large investment costs
What makes 5G such an exciting technology is not necessarily the service improvements it will mean for consumers, although this is important. Instead, it is the way in which the technology expands telcos’ horizons, offering them opportunities in a host of markets previously unavailable to them, that will be of greatest benefit.
Speaking on the consumer business case for 5G on a specialised session at this year’s Total Telecom Congress, Elisa’s Vice President of Business Development, Kimmo Pentikäinen noted that, despite its many improvements, consumers would need to be strongly incentivised to switch to 5G.
“In our market, in 4G, you can even reach 300 mbps downlink speed, so where are you going to find that extra value? Why should you upgrade from 4G to 5G?” he said, pointing to cloud gaming and 4K broadcasting as major drivers that could provide this additional value. Michel Sabatier, Business Development Director at West Midlands 5G added that augmented reality at sporting events is also becoming a very dynamic area of interest right now.
But the main value of this technology, the panel agreed, is for enterprises and SMEs.
“It will be possible to compete in new markets that did not exist before 5G,” noted Azam Beyk, Pre-Sales OSS Consultant at Comarch. “For example, mobile operators can now effectively compete with fixed operators through fixed wireless access. But the bigger part of the monetisation of 5G will be in the industry and enterprise domains.”
“I always say that the absolute size of the industry correlates to the absolute impact of 5G on that industry,” he continued. “The biggest impacts will be felt by manufacturing, retail, healthcare, media and entertainment. It is estimated that 5G in these industries will improve global GDP by 5% by 2030 – that’s $1.4 trillion.”
But to truly capitalise on Europe’s 5G opportunity and secure a share of that $1.4 trillion, the continent will have to invest. Lise Fuhr, ETNO’s Director General, said that Europe’s investment in 5G lags behind that of some other nations, arguing that the US has seen almost double the investment. The tides are changing, however, with COVID-19 creating an environment where investment in 5G is now critical.
“For many years, Europe has been very hard on competition policy,” said Fuhr. “It has not been as focused on the industrial policy mindset. I see that shift is happening right now in Europe with new economic recovery plans.”
Driven by the enormous potential of industrial applications, 5G clearly had the potential to justify its deployment costs.
“While there will be some consumer use cases – including cloud gaming and augmented reality – we see most of the opportunity in the industrial space,” summarised Angel Dobardziev, Senior Director of the IDC. “From manufacturing, remote-control machinery, autonomous driving, remote healthcare… When it comes to the topic of capturing new value, I’ve noticed a lot of optimism on this panel.”
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