Making the Case for Enterprise 5G

Brought to you by Informa Tech© 2020 Omdia

Dario TalmesioResearch DirectorService Providers Strategy and Regulation

Omdia [email protected]

Making the Case for Enterprise 5GVIRTUAL ROUNDTABLE: MONETISING 5G B2B8TH SEPTEMBER 2020 (EMEA)B2B is the North Star for 5G Revenues: How Can CSPs Get There?

mailto:[email protected]

Information Classification: General

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2017 2018 2019 2020 2021 2022 2023 2024 2025

5G eMBB subscriptions (000s)

Middle East & Africa Asia and Oceania Americas Europe

5G eMBB for consumer fails to excite customers resulting in a slow uptake.

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15.5m

The year 2020 will end with approximately 240m 5G subscribers

China is expected to reach 196m 5G subs in 2020, accounting for > 80% of 5G global subscribers (eMBB)

2.87bn 5G subscribes in 2025

2019 ended with approx. 15.5m 5G subscribers

SK operators reached nearly 7m subscribers or 10% of customer base by end of May 2020.


CSPs believe that B2B is the key to unlock 5G value

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21.88%

29.17%

32.29%

53.13%

63.54%

0.00% 20.00% 40.00% 60.00% 80.00%

Public safety (eg: emergency services, civil defense)

Communication service providers (eg: mobile, fixed,

cable operators)

Small and medium-sized enterprises

Consumers

Large and multinational enterpr ises

In your opinion, which customer segment will generate the most 5G-related revenues for your organization? (Select top

2)

Source: 5G World & Omdia: Global Insights Survey 2020, June 2020 Source: Omdia


COVID-19 has “helped” CSPs to find additional business cases for 5G, but monetization remains difficult.

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18.75%

34.38%17.71%

29.17%

How does the COVID-19 crisis impact your 5G strategy? (Select one)

Accelerates 5G investment / launch plans

Delays 5G investment / launch plans

Tr iggers new 5G investment cases / revenue

opportunities

No change

57%

0% 10% 20% 30% 40% 50% 60% 70%

Other (please specify)

Security threats

Lack of internal 5G technology expertise

Lack of technology maturity and standards

Regulatory constraints

Device availabili ty

Spectrum availability

Network rollout complexity

Creating a profitable business case

What are the main challenges your organization has faced (or expects to face) in deploying its 5G strategy (Select top 2)?

Source: 5G World & Omdia: Global Insights Survey 2020, June 2020


Manufacturing has been the leading sector for 5G implementations, lead by Tech Vendors or self-managed (e.g., DIY implementations)

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Enterprises are creating new budgets or increasing existing budgets for 5G solutions in response to COVI-19 crises

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0%

5%

10%

15%

20%

25%

30%

35%

40%

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Which budgets will increase? – All enterprises

Source: Omdia, Future of work Survey, July 2020 n=450


How do you capture the 5G opportunity?

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Brought to you by Informa TechSeptember 2020 © 2020 Omdia

Camille MendlerChief AnalystEnterprise Services

Monetizing 5G B2B: How are CSPs executing?

Views from the field


Enterprise 5GKey questions for CSPs

• Proposition– Which 5G propositions will resonate?

• Focus– To whom and where can 5G deliver greater value?

• Execution– How should CSPs organize to deliver the best outcomes?

Delivering value with 5G is less about harnessing technology,and more about developing the right ecosystems to work across.

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Hic sunt dracones


Proposition: 5G must be put in its placeEnterprise 5G innovators deliver outcomes, not technology

© 2020 Omdia

Why 5G? Enterprise 5G deployers say that creating new ways to do business and delivering a better customer experience are their top reasons to invest.


0.5%Demographic share of large and multinational firms in the global B2B universe.

28%Percentage of large and multinational firms that consider telcos as their top 5G partner.

64%Percentage of telcos that believe large and multinational firms will make them the most 5G revenues.

Focus: Bigger is not always betterEnterprise 5G innovators don’t discriminate on size

In fact, medium-sized / ‘Mittelstand’ firms are the most likely to seek a CSP’s help with their 5G strategy.


Execution: 5G is a platform playEnterprise 5G innovators thrive in partnershipPrivate 5G projects are stimulating a range of new partnerships

• Multiparty projects: Joint ventures involving a CSP, a network equipment vendor, the enterprise customer, and other strategic partners (e.g., vertical industry specialists)

• Alternative-managed projects: Led by a new class of specialist private mobile service provider offering custom services to enterprises, usually a vendor’s official reseller partner

• Telco-managed projects: The service provider controls an exclusive customer relationship and operates the network

• Enterprise-managed projects: The customer builds the network independently, using spectrum they control and deals directly with an equipment vendor

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20% 41%

18%21%

To identify and deliver compelling solutions, CSPs are competing to sign up the best industry experts.

Private network deals


Complex

Simple

Small business propositions

Buying for own use

Buying for others

Delivering value: Helping smaller enterprises succeed

Consumer UpRepackaging an existing consumer service for business use, typically by supersizing speed or volume

Blended LifeCombining business and consumerfeatures often with personal benefits

TransformerService that enables business modelshift, new ways of doing business andpotentially new revenue streams

Mass VerticalCurated services relevant to an industry’s workforcealthough most generic

All Inclusive Bundling key ICT services required to run a business; may include tech support and equipment supply

AcceleratorHelp firms with bundled technology, business and sometimes financial services

Today, most 5G offers for SMBs are “Consumer Up” - a re-sleeved consumer offer instead of a route to new value.


SK Telecom makes a smart factory play

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Communication service providers SKT is launching a subscription-based smart factory service running on its 5G network, providing local manufacturing companies with customized big data analysis.

Co-working & serviced offices Institutions

Office equipment/ stationery suppliers

Business consultant/ professional service providers

Vendors

Business affiliate/ user community

BISTel, a supplier of engineering automation, and adaptive intelligence (A.I.) applications for smart manufacturing is partnering with SKT to launch a big data analysis service

• In this Transformer example, SK Telekom is partnering with the Korea Smart Factory Data Association and software developer BISTel to offer a 5G-based big data analysis service to manufacturing SMEs.

• Benefits– Up to 15% reduction in costs by improving

manufacturing productivity.– Expected 20% longer lifespan for equipment and

industrial components using AI-based predictive maintenance

– Qualified SMEs receive up to a 50% credit (up to $80,000) to install a smart factory system

This example demonstrates that CSPs can deliver profound value to SMBs when they work with the right ecosystem partners.

The Korean government will inject $414 million to back upscaling to smart and automated system in manufacturing sector.


Delivering value: Manufacturing needs better visibility

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1.3%Of mission-critical industrial comms that are wireless now

100 millionRequired industrialcommunication nodes needed between 2019 and 2023

7Typical number of enterprise network protocols in use

Source: Omdia

Manufacturers are more likely to view CSPs as a key partner – but expect assistance from a wider group.

Other20%

Public safety8%

Energy and utilities

18%Transportation

and logistics18%

Manufacturing36%

World: 5G trials / projects by industry


Vodafone enables a disruptive manufacturing startup

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Source: e.GO

Who• German startup car maker e.Go• Aims to provide electric mobility at the lowest possible cost per mile

through a human-centered approach to manufacturing

What• Vodafone is supplying and managing an private 5G network• e.Go is working with various partners in Vodafone’s vendor ecosystem

How• “Augment the user” approach means no robotic tools• Uses 5G connected AGVs to fetch and carry tools, materials, and complete

assemblies between work stations to enable faster changeover times

New opportunities• e.GO targets one-seventh the labour cost per car and one-tenth the CAPEX

per car achieved at Tesla• Claims its approach means more speed and ability to adapt

This firm wants a partner with a readymade ecosystem to deliver rapid, pragmatic solutions to support its innovations.


Telia partners with Ericsson for shared value

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Source: Scania

Who• Truck maker Scania needed to digitize its Södertalje truck factory

What• Telia and Ericsson are providing private LTE and 5G, partnering under Ericsson’s

Industry Connect programme

How• Participating CSPs, like Telia, act as value-added resellers, providing first-line

support, interconnection, and any higher-layer services

• The network solution is standardized, focusing on an autonomous network model, and Ericsson provides an online quoting and ordering tool for CSPs to use

New opportunities• Exploring various vehicle to vehicle comms, including vehicle as a service models

For some telcos, partnering with a major vendor offers a fast way to capitalize on new private 5G opportunities.


Delivering value: Buildings deserve more attention

of enterprise 5G application traffic will be consumed indoors


Sources: Chinese Ministry of Industry and Information Technology, 2020 5G World Global Insights Survey, 2020 Smart Building End-Users Survey.

Supply Demand Opportunity

of enterprises investing in smart building technology are seeking new revenue streams

of enterprises do not exploit their building data to create new commercial or operational insights

47%70% 90%

Two thirds of enterprises planning to use 5G say their rollouts will be within a building.


Delivering value: 5G can help many places get ‘smart’


The fastest growing areas for building technology investment have been healthcare, leisure and hospitality facilities. The post-COVID world is triggering further demands across the built environment.

35%

15%14%

12%

10%

5%

9%

World: The built environment

Commercial: Privately-owned commercial properties, such as office complexes, banks and financialinstitutions.

Healthcare: Healthcare facilities including all hospitals, clinics, physician offices, care homes, pharmacies, andlaboratories.

Government buildings: Town halls, libraries, council offices, prisons, and military bases. (Note: excludesgovernment-owned airports, railways, ports, and educational facilities classified elsewhere).

Leisure and hospitality: Sports stadiums, fitness centers, hotels, restaurants, and public swimming pools.

Educational facilities: Public and private schools, universities, and colleges.

Retail: Places where goods are sold and temporarily stored such as shops, supermarkets, petrol stations, andwarehouses.

Other: Other spaces include airports, ports, railway stations, industrial facilities and datacenters.

Note: graph shows relative distribution of projected building management revenues by segment type (2023). Excludes homes / residential buildingsSource: Omdia


Telefonica’s smart stadium delivers new value

Who• Camp Nou is Barcelona’s 90,000 seat stadium• Telefonica and Ericsson partnered for the solution, also selecting devices and apps

What• Initial aim to make money by selling the in-stadium experience at home• With VR glasses viewers at home can watch the matches from beside the goal, from the

managers dugout and VIP box

How• Wireless 360-degree HD cameras connected by 5G, placed in previously impossible

locations around the stadium – offering real time replay from new angles• Telefonica’s 3.5GHz spectrum with edge computing

New opportunities• Digitizing parking payments, routing people to seats, food delivery to seat, environmental

control, betting, real-time ticket upgrades, as well as AI driven security screening


If social distancing restrictions continue, then stadium owners will need to lean on technology solutions in different ways to keep fans engaged – at home and at the stadium.

Source: Telefonica


Signify’s smart lightingpartnership could address new demands

Who• Signify (formerly Philips Lighting) is working with Vodafone Germany to

explore combining 5G and Li-Fi, primarily in commercial buildings

What• Better lighting improves worker conditions and productivity• Lighting is a high business cost that needs better control; modern lighting

delivers additional value as a high-speed communications medium

How• Growing activities in Lifi, which delivers broadband connectivity via visual

light communication technology, addressing inbuilding radio interference challenges

New opportunities• To encourage a safe return to work, new screening and monitoring within

buildings is required from employers and building management firms


The commercial property industry is at risk – and must adapt to a post-pandemic world. CSPs can partner with building owners, facilities management and technology providers to develop compelling solutions.

Source: Mitie


Beware, some ecosystems can exclude CSPs

Example: the City of Liverpool is building its own low-cost private 5G network to support a range of community health and care coordination initiatives.

Use cases include remote GP consultations, sensors and medical devices, wound care using AI, an anxiety-management app, and support for enterprise IT.

Here alternative providers – not a CSP –is deeply embedded in a complex but attractive ecosystem.


Communications Service Providers

Technology & Device Vendors

Pharmaceuticals

Universities and research institutions

Providers

Regulators & Government

Insurers

Patients

© BearingPoint. All rights reserved. 1

5G Digital Marketplace Angus Ward CEO, BearingPoint//Beyond

Connecting the dots:

© BearingPoint. All rights reserved. 2© BearingPoint. All rights reserved. 2

A global SaaS-based BSS and a digital business platform provider

We help our customers grow their business using our digital platform BearingPoint//Beyond

Serving customers across telecommunications, media, technology, automotive and financial industries

Powering our customers to grow revenue and to reinvent their business models by utilizing the ecosystem

Owned by BearingPoint a leading Independent management and technology consultancy with European roots and a global reach

AWARD WINNERSANALYSTS SAMPLE CUSTOMERS


By year-end 2023, more than 50% of large enterprises will deploy at least six EDGE computing use cases deployed for IoT.

6%

35%

29%

16%

14%

Agriculture & MiningManufacturing & UtilitiesProfessional & Financial ServicesPublic ServicesICT & Trade

Telecommunications’ market snapshots New opportunities are on the horizon

Internet of Things1.8 billion 5G connections by 2025

$2.2 trillion by 2034

5.3% of GDP growth

2019 2025Total connections

12.0bn 25.2bn

Source: GSMA, Gartner

The number of IoT connections will triple worldwide between 2018 and 2025 to reach 25 billion


The lines between players and technologies are blurringNew technologies are becoming the foundation of the future of business

Source: IDC

By 2025, 80% of digital leaders will devise and differentiate end-customer value measures from their platform ecosystem participation, including an estimate of the ecosystem multiplier effects

But the winners will be those who can orchestrate an ecosystem and build solutions that better solve business problems

Different players are using different entry points to win B2B business

CLOUD

SECURITY

BUSINESS

EDGE

AI & DATAIoT

5G & CONNECTIVITY

TECHNOLOGY PLAYERS

COLLABORATION & CO-CREATION

INDUSTRY SPECIALISTS CUSTOMERS


• Different business model

• Organizational structure and alignment

• Focus on solving business problems and delivering outcomes

• Most of the value is created outside of the organization

• Close collaboration and alignment with the customers

One of the key concerns CSPs have is scale: how to create a scalable business that will guarantee revenue and future growth

While addressing the key differences between the models

CSPs need to shift from selling connectivity products & services to selling ecosystem enabled solutions

More and more CSPs are looking to build 5G Digital Marketplace to address this shift

DIGITAL PLATFORM

*Based on Amazon flywheel

connectivity andnetwork

IoT and sensors

partners and monetization

security

analytics

Smart Cities Smart

Agriculture

Smart FactorySmart

Grid

Smart x…


What is a 5G Digital Marketplace for B2B customers?

SMART CITIES SMART AGRICULTURE

INDUSTRIAL IOT (SMART FACTORY)

UTILITIES SMART GRID

B2B 5G SOLUTIONS

connectivity andnetwork

IoT and sensors

partners and monetization

security

analytics

A Marketplaceis a form of digital platform, where the owner of the platform is connecting potential buyers and sellers, helping them to buy, sell and bundle services and solutions from a partner ecosystem

B2B 5G solutionsLeveraging 5G as an enabler and integrating it with new technologies and applications such as Edge, IoT, security, data and AI to solve business problems in a new innovative way

B2B CUSTOMER


APIsAPIs OPEN APIs

APIsAPIs

OPEN APIs APIsAPIs

Cross domain product management & monetization

Service management & orchestration

ECOSYSTEM MANAGEMENT

Create & Sell Order & Fulfill Bill & Serve Partner & Grow

Agriculture Energy & Utilities Finance Automotive Healthcare

VERTICAL SOLUTIONS

Media & Entertainment

Transportation & Logistics Public Sector

Industrial Manufacturing

Local CommsWiFi, BLE, …

Long-range Comms3G, 4G, 5G, LoRA, WiMAX, …

Fixed Access Network

Access VNF

Access VNF

Aggregation & Core Network

Core VNF

Core VNFCore VNF

Fixed AccessFibre, Copper,… Core Data

Centers & Clouds

Edge Compute

DEVICES, SENSORS & THINGS CONNECTIVITY EDGE COMPUTE & ACCESS VNF CORE VNF CONTENT, APPS & CLOUD SERVICES

The role of the digital business platform in enabling 5G digital marketplace


A successful 5G digital marketplace should support the different users needs

• Fast on-boarding • Visibility (of orders)• Transparency (payments and revenue)

• & Automation of processes

• Solve a problem (not a technology spec)• Simple to buy & pay • Easy and effective to use

• Control & Governance • Fast on-boarding • Visibility (of orders)

• Transparency (payments and revenue) • Automation of processes • Scale • Cost efficiency

CUSTOMER EXPERIENCE

MARKETPLACE OWNER EXPERIENCE PARTNER EXPERIENCE


Digital Marketplace in Action

© BearingPoint. All rights reserved. 10

Thank youWe’d love to continue the conversation:

Angus [email protected]

mailto:[email protected]


Next stepsErrors that you shouldn’t repeat

• Understanding the customer– Poor knowledge of vertical drivers – and the industry ecosystem’s complexity (healthcare is an example)– Recommendation: understand their language and industry KPIs with expert partner support

• Value proposition– Selling technology instead of selling business outcomes– Recommendation: Invest in a consultative, service-led approach that listens to customer needs

• Ecosystem strategy– Weak investment in beneficial platforms, partnership programs and related business models– Recommendation: Sometimes “owning” the customer isn’t always the best / most profitable approach


Documents

Making the Case for Enterprise 5G