To take full advantage of the new capabilities and business opportunities 5G provides, communication service providers (CSPs) are required to leverage out-of-the-box strategies. However, this does not mean that CSPs need to go extreme lengths to come up with effective approaches, as 5G elevates the potential for many winning CSP strategies. Currently, there are a plethora of real-world use cases that telecom operators can learn from and replicate - but what exactly do they entail?
Recent research on the major trends impacting the global telecoms industry point towards CSPs who responded to real-time disruption and change by strategically altering their services, infrastructure, and processes. Using similar proactive methods of creativity and innovation, these telco operators are now leading the charge into the 5G era with their unique strategic pivots.
Diversifying the portfolio
One major characteristic of successful service providers is that they are constantly searching for opportunities to diversify and expand their business, including their revenue streams. As 5G continues to grow rapidly within the industry, these opportunities will consequently develop at a similar pace, enabling a wider range of use cases across multitudes of industry verticals.
A key step to diversifying your portfolio is to build an ecosystem of like-minded partners. For example, AT&T joined forces with hospice provider VITAS Healthcare in early 2019 to enhance the patient experience for those who receive end-of-life care by reducing pain and anxiety through augmented reality (AR) and virtual reality (VR). On the other hand, a manufacturing use case shows the Finnish multinational mobile network operator, TeliaSonera which teamed up with telephony provider ABB, introducing a new 5G AI solution for industrial use - 5G-enabled smart factory applications, which include real-time visual monitoring and analytics.
The gaming industry is also a vertical that hopes to flourish with 5G’s benefits. An example is the South Korean wireless telecoms operator, SK Telecom, which signed an exclusive partnership with Microsoft to trial a streaming gaming service for 5G subscribers. Other telco companies that are looking at 5G gaming include Deutsche Telekom, which is working with software developers to ensure that its network is capable of multiplayer 5G gaming, as well as Verizon, which is leveraging its Yahoo! and AOL media assets to lower development costs of new AR content.
Leading the charge against disruption
Disruption, both industry- and company-wise, often does not come with early warning signals. Nevertheless, companies should be prepared to modify their strategies to counter disruption. The biggest telecoms disruption we’ve seen to date was Reliance Jio’s 2016 launch of the world’s first 4G-only network, which drastically changed the course of India’s mobile market with innovative processes, a resulting groundbreaking cost structure and a revolutionary array of digital services.
Dish, the U.S. satellite TV provider, is aiming to take disruption to the next level in the 5G era by building the first fully virtualized 5G network by 2023. Dish also plans to do so at a record-low price point and to go virtual-only, and by doing so will pay merely $10 billion to launch a network covering 70 percent of the U.S., compared to the $25 billion Reliance Jio spent in India.
One often successful way incumbent service providers counter these disruptive new entrants is by focusing on multi-play experiences that merge broadband, wireless, telephone and television services. 5G also boosts this approach. Take a look at Globe Philippines, which used 5G fixed wireless access (FWA) to drive its quad-play strategy. With 5G FWA, it can now offer wireless connectivity at the same speeds and prices as fiber, but with a much faster deployment rate, and at a lower cost.
Monetizing a smarter way
The 5G era presents a strong opportunity for CSPs to increase their average revenue per user (ARPU). The average ARPU for unlimited 5G data plans is 3.5 times higher than that of today’s 4G offerings. To further increase ARPU requires fresh thinking, as exemplified by Finland’s Elisa. The telco operator took a different approach - it sold its 5G offerings based on speed, as opposed to the traditional use of volume-based pricing. Elisa offers 100, 300, 600 and 1,000 Mbit/s service tiers for subscribers to choose from. Keeping in mind that 4G maxes out at 600 Mbit/s, Elisa hopes to dramatically boost 5G data and service usage, as the 1,000 Mbit/s tier would only make sense with 5G.
These examples make it clear that 5G cannot be thought of as just “4G+1”. 5G offers extraordinary new capabilities. As such, extraordinary thinking will be required to fully realize its capabilities and opportunities. A key step for service providers to begin leveraging 5G’s offerings is by employing the strategic thinking of today’s high performing service providers. By following their lead, CSPs can implement powerful transformative strategies now that will become even more robust as 5G deployments become more widespread.
