5G is set to transform the way we do business. For the telco industry, the technology offers huge market opportunities. Yet, the path to implementation is far from straightforward. To understand the current state of readiness for 5G implementation across European industry, NTT DATA UK and research firm teknowlogy group interviewed business leaders from telcos and vertical enterprises. The resulting report reveals the specific pain points of telcos looking to implement 5G and exposes the narrowing timelines for implementation if telcos are to meet enterprise demand.
With these various obstacles to address, telcos need a clear strategy for rapid roll out and implementation of 5G. Drawing on expertise from partners, such as NTT DATA UK, will allow telcos to find solutions to challenges that may be contributing to delays. Tapping into third-party expertise will ultimately help deliver the promises of this transformative technology to expectant customers.
5G technology has been the subject of much apprehension and excitement for several years. It’s therefore surprising that only 35% of telcos have a clear strategy in place for implementing 5G. This is despite telcos having a clear understanding of the huge capabilities and benefits of the technology. Indeed, NTT DATA and teknowlogy’s report found 94% of telcos believe 5G will transform the sector. But nearly half (46%) are still exploring the value 5G can offer.
While telcos take time to consider the potential of 5G and develop a 5G strategy, the timelines for implementation are narrowing. More than half (52%) of enterprises expect to implement 5G solutions within the next year. Meanwhile, 88% of telcos plan to implement 5G solutions over the next 24 months, with 35% expecting to implement the technology in 12 to 24 months. Only 10% of telcos expect to generate more than 20% of revenue from 5G or 5G augmented products over the next five years. This state of play creates the potential for a mismatch between buy-side demand and sell-side supply of 5G technology.
Obstacles to implementation
Several barriers to implementation have the potential to delay telcos’ roll out of 5G. Data management is a standout issue, with 43% of telcos claiming this is the biggest obstacle to 5G adoption for them. Regulatory and compliance issues are an obstacle for 35% of firms and a shortage of talent is an issue for close to a third (31%) of telco firms. The lack of appropriately skilled workers is an ongoing problem for the telecommunications sector, creating disruption to multiple services. Last year, Virgin Media issued a warning that a skills shortage would disrupt the UK’s broadband upgrade scheme.
Alongside the talent shortage, the limited number of partners available to support telcos is a barrier facing 30% of firms. Third-party expertise is in demand as telcos attempt to navigate the various challenges of providing 5G services. Other obstacles causing delays include legacy technology (28%), cultural challenges (24%), and uncertainty about the true benefits of the technology (23%).
Delivering the benefits
There are several high-priority capabilities telcos plan to bring to market through 5G services and solutions. The highest priority is flexible architecture to support new business use cases. Security is also ranked highly as a priority, as is driving down latency by distributing compute capabilities across the network.
Delivering the multiple benefits of 5G will require a new approach compared to previous network services. The capabilities demanded by enterprises for 5G go well beyond the capabilities demanded by existing communication networks – it’s not just about connectivity. Consequently, traditional go-to-market strategies need adapting. Some organisations are focusing on building out partner ecosystems to deliver enterprise-ready solutions. Many others – 72% in the UK and 77% in France – plan to develop capabilities internally and deliver directly to market.
However they plan to deliver 5G services, telcos need to act fast. With timelines narrowing, telcos need to implement more aggressive transformation roadmaps to ensure they can make the most of 5G and meet the peak of enterprise demand. The right partner can provide support in developing this strategy.
NTT DATA UK offers a private 5G network-as-a-service platform for MNOs to use to provide personalised 5G services to enterprise customers. It offers end-to-end management of the entire network lifecycle, differentiates between customer-facing systems and network domain, and uses artificial intelligence to prevent network failures and outages automatically. Making use of third-party expertise is key to meeting rising demand, and partners are ready to work with telcos to ensure the smooth and rapid roll out of 5G services.
Facing the 5G future
5G presents vast opportunities for telco organisations and for the economy as a whole. But to capitalise on these opportunities, organisations must act fast or risk losing out. The gap between rhetoric about the potential of 5G and telcos’ ability to deliver its benefits must be closed. The next 12 to 24 months will be critical as telcos develop strategies to overcome obstacles and deliver at pace. To meet these timelines, telcos should take advantage of the expertise of partners such as NTT DATA UK, which can help develop the right strategy and support delivery of 5G services when enterprises need them most.