Is 5G making inroads in the transport sector? | NTT DATA

Tue, 21 December 2021

Is 5G making inroads in the transport sector?

5G brings with it the potential for more efficient and more connected transport. The technology’s high volume-processing and low latency capabilities will fuel a rise in autonomous vehicles and bring greater efficiency to public transport networks. But how ready is the transport sector to take advantage of this technology?

NTT DATA UK and research firm teknowlogy group interviewed business leaders from telcos and vertical industries such as transport to understand the current state of readiness for 5G implementation. The transport sector is the most ambitious sector when it comes to timeframes for implementing 5G, but it is also the most uncertain in terms of strategic direction. To fulfil its ambitious plans for 5G rollout, the sector must draw on the necessary support from partners to deliver the full benefits of the technology.

The potential of 5G

5G infrastructure provides the basis for the expansion of the Internet of Things (IoT). For transport, this will enable the rise of connected and autonomous vehicles, as well as smarter and more efficient logistics. Better traffic monitoring systems and signalling processes will mean public transport can run more smoothly and congestion can be reduced. The real-time transfer of vast quantities of data means that supply and demand across transport networks will be understood more effectively, creating the opportunity for significant efficiency gains.

The transport industry clearly understands the potential of 5G. 90% of transport sector respondents to NTT DATA and teknowlogy’s survey believe the technology brings new opportunities, and a similar proportion expect the technology will create new revenue streams. The sector expects data management technologies and core infrastructure to see significant impact, alongside new technologies such as IoT and Edge computing. The most notable change is expected around supply chain and logistics functions.

While the sector recognises the opportunities related to 5G, three quarters of respondents from the transport industry expect significant challenges in the roll out of the technology. Legacy technology is the biggest challenge facing the sector, reported as a concern by nearly half (45%) of enterprises. The sector is also the most uncertain in terms of its strategic direction. Almost a third (30%) of enterprises in the industry are unsure on future direction and 5% are looking for external help.

Despite the lack of strategy, the sector remains the most ambitious when it comes to timeframes for implementing 5G. Almost three quarters of transport respondents anticipate implementation within one year, just ahead of respondents from the retail sector, which also expects to implement 5G rapidly. Telecommunications firms see the transport industry as presenting a significant opportunity, assessing the sector as the third strongest consumer of enterprise 5G, only behind utilities and the banking and insurance sector.

Measuring success

In line with the lack of strategic direction, the transport sector is also the least likely to have any criteria for measuring the success of 5G implementation. As many as 35% of transport enterprises report they have no fixed success criteria. The sector is also among the most conservative in its estimates of revenue growth and generation. 65% anticipate less than 10% revenue growth, of which around half expect less than 5%.

For those that plan to generate revenue through the implementation of 5G, half plan to do so by reaching new customers and extending operations. Leveraging data to build new services is part of the revenue generation plan for 35% of transport enterprises.

The transport sector is one of the most collaborative when it comes to choosing which stakeholders will be involved in implementation. The spread of business units involved is the most diverse among all industries surveyed, with around 20% of transport enterprises expecting to bring in HR, sales, facilities, and operations managers. Meanwhile, the sector is also least likely to involve business executives in the process.

Meeting ambitious timelines

While the transport sector remains the most ambitious in its planned timeframe for the roll out of 5G, it is also one of the least mature sectors in terms of strategy. Without effective strategies in place, the sector will struggle to meet its ambitious targets. Thus, to formulate effective 5G strategies and plan for the successful and rapid implementation of 5G technology, the sector should draw on the expertise of partners such as NTT DATA UK. Working with external partners, transport enterprises can create a clear set of criteria to measure the success of 5G implementation, and the sector can begin to benefit from the connectivity and efficiency gains the technology has to offer.

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