July 1, 2020
COVID-19 has disrupted the business landscape, forcing enterprises to find new work models to ensure business continuity. There is, however, a silver lining to the otherwise painful episode: support for accelerating 5G adoption.
Several factors are significantly driving the business case for adoption of a faster and more reliable network: the spike in work-at-home, increased demand for digital delivery of applications and content, and the realization that digital-ready enterprises are better prepared to navigate crises. These challenges put 5G firmly in the forefront of future digital transformation.
However, in the medium term, recessionary pressures, constrained capital, and heavy debt may discourage telcos from widespread deployment of public 5G. As a result, telecom providers are increasingly exploring the prospect of private 5G for enterprises as a means of generating steady revenue. Telecom providers’ interest, coupled with enterprise enthusiasm – now truly appreciating the importance of digital readiness and advocating for Industry 4.0 adoption, of which 5G forms the foundation – make now the right time for private 5G adoption.
Effect of COVID-19
Consumer, or B2C, data consumption is likely to increase as social distancing continues, at least until the release of a viable vaccine. Moreover, as firms pivot to digital models and operate virtually, data consumption will continue to rise, establishing a connectivity-centric ecosystem while compounding the load on 4G systems.
To maintain service quality and ease network congestion, telecom providers have begun to invest in 5G networks. These networks can be classified into two broad buckets: public 5G and private 5G. Public 5G refers to consumer cellular networks deployed across the world for telcos’ B2C customers. Private 5G is a kind of restricted network, often used by enterprises on their premises, to take advantage of 5G’s low latency and high bandwidth for accelerated Industry 4.0 adoption.
Slow progress of public 5G deployments
Most telcos are highly leveraged, given the capital-intensive nature of the business. Some market leaders, such as AT&T, have also taken on additional debt in their pursuit to transform into media conglomerates. Telcos that follow that strategy will most likely prioritize optimization of existing consumer networks to cope with the load and deploy consumer grade 5G only in highly urban pockets where the return on their investment is sizeable.
To increase revenue, we expect a push from telecom operators for B2B private 5G networks.
Rise of private 5G
Private 5G is a means for an enterprise to modernize its internal broadband and wireless communications infrastructure with high speed 5G cellular networks. A cellular network can provide better coverage within an enterprise’s work location, enable better bandwidth, and support low latency requirements. Deploying 5G in controlled work environments like shop floors, power plants, and healthcare facilities can also negate some of the key technology issues of mmWaves such as the effects of noise and attenuation, and difficulty in penetrating dense objects. We expect telcos to aggressively push private 5G use cases as an integral part of Industry 4.0 transformations as they look to improve revenue share from their B2B businesses.
Private 5G adoption by industry
Given its use and benefits, some industries are more likely to leverage private 5G more quickly than others.
- Healthcare: COVID-19 has highlighted the stark reality of insufficient healthcare personnel to care for patients. As the use of virtual health consultations rises, telemedicine and telehealth will soon become the norm in the industry. With its significantly higher bandwidth and lower latency, private 5G adoption will accelerate with the rest of the virtual healthcare model.
- Manufacturing and energy & utilities: Manufacturing firms are facing ongoing pressure on demand and production due to lockdowns. With most factories requiring their workforces to work remotely, some of these firms have had to go months without production. To reduce the number of workers on-site, firms will explore automation and adopt technologies such as digital twins, robot assistance, and IoT. Private 5G will enable and accelerate the adoption of these technologies.
- Media and entertainment: 5G will unlock the potential of immersive reality; for example, stadiums and theme parks are investing in the technology to improve user experience.
- BFSI: With the movement toward digital and the proliferation of data, the banking industry will explore 5G network slicing, whereby firms can apply specific security policies to various network slices. Moreover, the combination of edge computing and 5G will enable faster and more secure processing of data. For insurance companies, 5G will play an important role in improving customer experience through telemetry.
Challenges remain
Despite its promise for many industries, challenges remain for the adoption of private 5G.
- Capital intensive: No matter the customer (B2B or B2C), 5G remains a capital-intensive transformation. However, the COVID-19 crisis will further strengthen the business case for Industry 4.0. The manufacturing and energy & utilities industries, which have often lagged in the adoption of emerging technologies, will be more inclined to spend on digital following the crisis. The partial shift of this investment to enterprise customers in private 5G will appeal to telcos, which are otherwise supporting high debt.
- Geopolitics: Political uncertainties also loom large as countries re-examine China’s accountability on cyber security and data privacy. These concerns have been exacerbated by ongoing geopolitical tensions. 5G deployment may see slight delays as these issues cause supply chain disruptions and increase pressure on other global players.
How you can drive 5G adoption in your organization
You can follow a five-stage structured path to drive private 5G adoption in your organization.
- Business case: First you must understand the benefits and challenges of private 5G. It is also imperative to understand the key alternatives to 5G such as Zigbee, WiFi-6, and SIGFOX. You can work with technology partners to identify key use cases for your industry and select effective cases to pilot.
- Feasibility study: In this stage, you assess the technologies that could work with your existing landscape and outline the changes that would be necessary to adopt them. You can then run pilots on selected use cases and understand the key parameters that may need adjusting, such as security and scalability. Following the pilot, you must ascertain the business outcomes achievable and model potential ROI.
- Pre-implementation: Once you have a fair understanding of the necessary changes, you can begin changing and upgrading your existing landscape to be compatible. Because private 5G is a hardware-intensive and long-term investment, you should plan to spend considerable time in selecting the right vendors for implementation.
- Implementation: At this stage, the OEM and service partners begin the network transformation. Because 5G is a disruptive technology, you must give considerable attention to improving processes and change management to realize its full benefits.
- Post-implementation: Following initial adoption, you must continuously monitor the technology landscape and assess how you can adopt new use cases to maximize your ROI.
If you wish to learn more about the 5G landscape and private 5G in particular, please connect with us at [email protected], [email protected], and [email protected].
