Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand....

16
Beyond connectivity: CSP perspectives on higher-value 5G use cases Analysis and advice based on CSP perspectives A Nokia-Omdia research paper

Transcript of Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand....

Page 1: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use casesAnalysis and advice based on CSP perspectives

A Nokia-Omdia research paper

Page 2: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 2

By now, the 5G value proposition is well understood: the next generation of wireless technology will allow communications service providers (CSPs) to design and deliver a vast array of high-value services, access new vertical markets and break into the massively lucrative enterprise segment.

Exactly how they do this, and to what degree, will be a matter of individual strategy. No CSP could possibly deliver every type of 5G service: each will have to decide where they want to play along the spectrum of possibilities.

In fall 2019, Nokia and Omdia surveyed 172 CSPs around the world to better understand their current thinking about 5G and specifically the eight 5G use case categories identified by Nokia Bell Labs. The survey was augmented with qualitative input from interviews with 10 CSPs in different regions.

IntroductionEight overarching categories of 5G use cases1. Fixed wireless access

2. Video surveillance and analytics

3. Immersive experiences

4. Smart stadiums

5. Cloud robotics and automation

6. Machine remote control

7. Connected vehicles

8. eHealth

Introduction 2

Realizing the possibilities of 5G 4

Identifying the 5G use cases 5

FWA as the ‘gateway’ to higher-value 6 5G use cases

CSP perspectives on advanced 8 5G use cases

Opportunities and challenges 10

Venturing into unfamiliar territory 12

How enterprises see 5G 13

Setting your 5G use case strategy 14

Take an incremental approach 14

Chooseservicesthatfityourcontext 14

Conclusion 15

Appendix: Methodology 15

Contents

Page 3: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 3

• CSPs are currently most interested in connectivity-driven use cases such as fixed-wirelessaccess(FWA)andvideosurveillance and analytics.

• The top use cases vary by region (e.g.,eHealthtestedstronglyinNorthAmerica,FWAinLatinAmericaandvideosurveillanceandanalyticsinAsia).

• Businessissuessuchasbusinesscase,partnerships,andskillsremainCSPs’biggest concern when it comes to offeringmoreadvanced5Gservices.

Basedonourfindings,thispaperputsforwardfiverecommendationstohelpCSPs advance their 5G agendas:

1. Start deploying 5G now. Most CSPs still aren’t fully sure what to do with 5G and may not be for several more years.However,it’smoreimportant to build a live network and gain experience with the technology than wait to answer every question about 5G. 2. Begin with connectivity services. Enhancedmobilebroadband(eMBB) and FWA are the easiest 5G services tooffertoday—andfitwithCSPs’ existing business models.

Here's what we learned:3. Establish partnerships. CSPs will need to develop partners within and outside of their mobile ecosystems to fully commercialize 5G.

4. Think like an enterprise. To sell advanced,high-value5Gservices toenterprises,CSPsneedto internalize how those customers think,actandcommunicate.

5. Focus on solving the customer problem. While CSPs are used to thinking in purely technological terms,thereal5Gopportunity will come from demonstrating the added value of being able to use technology to solve customers’ business problems.

Importantly,itispossibletostartdeveloping and deploying “5G era” servicesontoday’sexistingLTEnetworkseven as the 5G infrastructure is being built—splittingoffthe5Gbusinessmodels from the underlying technology. This allows CSPs to evolve in a staged and strategic way instead of having to make a giant leap of faith.

Page 4: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 4

andinformation,formanaging work and life responsibilities. Mobilebroadbandofferingshavebecome key to service providers’ revenue streams and brands. And unlike previous generations ofmobiletechnology,5Gisn’t dogged by “internal debates” suchastheLTE-versus-WiMAX arm-wrestle that plagued 4G.

Together,thesefactorshavecontributed to the steady stream of CSPs committing to 5G deployments —andthesizeandbreadthoftoday’searly networks creates a solid foundation on which a broader 5G ecosystem will be built.

Between the end of 2018 and the end of2019,thenumberofcommercial 5G networks jumped from single digits to 70. Those deployments span six differentregions—proofthatadoptionis not only on the rise but also widespread. Some device vendors have begun to support multiple 5Gsmartphonemodels.Networkequipment vendors have shown they can support a variety of deployment scenarios with macro and small cells. Shipments of 5G base stations are up.

Inmanyways,thetimingcouldn’t be more right for a 5G rollout. The smartphone is now a central device in people’s lives: for consuming media

Realizing the possibilities of 5GFigure 1: Commercial 5G deployments at the end of 2019, by region

Africa, 3

Asia-Pacific, 24

Eastern Europe, 5Middle East, 11

Western Europe, 22

North America, 5

Source:Omdia,January2020.5GServiceProviderTracker:4Q19.

Page 5: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 5

CSPs are well aware of new service and revenueopportunitiesfrom5G,whichwill be especially welcome in mature mobile markets where consumer mobile broadband revenue growth has slowed. What those service and revenue opportunities will look like is still a wide-open question. To make the virtually limitless possibilities moremanageable,NokiaBellLabs hasidentifiedeightoverarchingusecase categories:

Fixed wireless access (FWA)FWA in homes and businesses will bringfiber-likespeedandreliability to places where currently there is no infrastructure,orwherewirednetworkswouldbetooexpensivetodeploy, or in direct competition with existing fixedofferings.

Video surveillance and analyticsThe low latency and high capacity of 5G strongly support enhanced video surveillanceandanalytics—withmobile and portable cameras providing coverage of previously inaccessible spaces and enabling sharper decision-making in nearly any industry.

Immersive experiences5G-enabled 360-degree virtual reality (VR)willputaudiencesatthecenterofmust-seeeventsinawholenewway—whileaugmentedreality(AR)bringsretailto life and gives enterprises the ability to have remote expert help everywhere.

Smart stadiumsARcanbeusedinstadiums,theatersandotherentertainmentvenuestoofferamoreimmersiveexperienceforfans,offeringreal-time content overlays and more.

Cloud robotics and automationExperts tend to agree that the future of manufacturing is automated and robotic. As those systems become morefinelytunedandbusiness-critical,new,dynamicnetworkcapabilitieswillbeneededtosupportthem,which 5G is ideally suited to deliver.

Machine remote controlDrones,cranes,robotarmsandothermachinerycanfunctionmoreefficiently—andmoresafely—whenoperatedremotely. Such machines require reliablewirelessconnectivity,oftenoverlongdistances,withlowlatencyforaccurate,responsivecontrol.

Identifying the 5G use cases Connected vehicles5G will improve road travel in several waysmakingitsafer,faster,moreenergyefficientandmoreenjoyable.The ultimate application will be roads filledwithassistedandautonomousvehicles.

eHealthThis use case covers a broad category of consumer and enterprise applications,includingthemonitoringofhealthwearables,telemedicine,patient transfer support and bringing medical services to remote areas.

The question for CSPs now is which ofthesearebesttopursuefirst— and what will it take to start delivering them?

Page 6: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 6

Notsurprisingly,mostCSPsareeasinginto 5G services with conventional connectivityofferingssuchasenhancedmobilebroadband(eMBB)and FWA. These are natural starting points: they are close to CSPs’ existing businesses,withfamiliarkindsofobstacles and the right equipment and device vendor partnerships already inplace.Plus,thereisdemand.Omdiaforecaststhat,withinfiveyears,5GeMBB alone will account for roughly 18% of all mobile subscriptions.

FWA as the ‘gateway’ to higher-value 5G use casesConnectivity services will also help justify—andpayfor—initial5Gnetwork builds. They will help raise customerawarenessof5G,spurringconversations about what else it can do. And they will give operators the lead time they need to build partnerships and business models for advanced5Gservices,whichwilllikelytake several more years.

Of the two 5G connectivity options CSPsareexploringtoday,eMBBwill

Figure 2: 5G eMBB subscribers (in millions) and 5G percent of total market, 2019-2024

Source:Omdia,October2019.5GMobileandFixedSubscriptionForecast:2019-2024

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2019 2020 2021 2022 2023 2024

5G subscribers % of total market

Millions

serve mainly to prevent customer churn and make the network more efficient.FWA,ontheotherhand,stands to bring new revenues.

OutsideofeMBB,FWAwasrankedamong the most important 5G use cases by the CSPs we surveyed in allregions—with47%ofCSPs listing it in their top two. Of the 70 commercial 5G networks up andrunningbytheendof2019, 13 support FWA.

Page 7: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 7

One of the attractive aspects of 5G FWA is that it can be used in many ways:

• As a stepping-stone to entirely newserviceofferingsformobileCSPs.

• As an enhancement to converged CSPs’existingfixedbroadbandserviceofferings,deployablewhereotherfixedbroadbandtechnologiesaren’t economically feasible.

• As a time-to-market accelerator for converged CSPs’ to capture a new customer base in a given geographicareaandthenbackfillwith other broadband options suchasFiber-to-the-x(FTTx).

• Asatemporaryfixedconnectionforconstructionsites,musicfestivalsandotherspecialevents,orasabackup for large enterprises’ optical access networks.

Figure 3: Regional interest in 5G FWA

Source:Nokia&Omdia.

0% 10% 20% 30% 40% 50% 60% 70% 80%

N. America

LATAM

EMEA

APAC

Global

Rank 1 Rank 2 Rank 3 Rank 4

Beyond connectivity: CSP perspectives on higher-value 5G use cases 8

Page 8: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 8

BeyondFWA,onlyvideosurveillanceand analytics come close to being a relativelyuniversaltop-twousecase,chosen by 40% of CSPs surveyed. The generaldifferenceofopinionoverthemore advanced use cases doesn’t mean they should not be considered: it simply indicates that some CSPs see challenges with those use cases and aren’tsurehowtosolvethem—yet.

CSP perspectives on advanced 5G use cases

Source:Nokia&Omdia.

47%

38%

28%

18%

16%

28%

21%

3%

22%

28%

34%

31%

32%

15%

22%

17%

Fixed wireless access

Video surveillance and analytics

eHealth services

Cloud robotics and process automation

Machine remote control

Immersive experiences

Smart stadiums

Connected vehicles

Ranked 1 or 2 Ranked 3 or 4

Figure 4: Top four use cases, global results

SomeofthedifferenceinCSPperspectivesisregional.Localbusinessmodels,regulationsandcultureallplayaroleinthis.Forexample,itislikelybecauseofthefor-profithealthsystemof the United States that the eHealth usecaseresonatesstronglywithNorthAmericanCSPs.ThoseinAsia-Pacific,ontheotherhand,aremoreinclined to favor immersive experiences among

theirtopfourusecases—whichislogical given that South Korea and China have both shown a high level of interest in mobile video.

Whensettinga5Gservicestrategy,focusing on regional trends and realities is also important because local customer preferences will ultimately decide which 5G use cases are seen as most valuable and appealing.

Page 9: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 9

Figure 5: Top 5G use cases, North and Latin America

48%

41%

28%

14%

14%

24%

24%

7%

17%

24%

28%

28%

41%

17%

21%

24%

Fixed wireless access

Video surveillance and analytics

eHealth services

Cloud robotics and process …

Machine remote control

Immersive experiences

Smart stadiums

Connected vehicles

Latin America

Rank 1 or 2 Rank 3 or 4

40%

50%

70%

20%

10%

10%

20%

20%

20%

30%

20%

40%

30%

20%

Fixed wireless access

Video surveillance and analytics

eHealth services

Cloud robotics and process …

Machine remote control

Immersive experiences

Smart stadiums

Connected vehicles

North America

Rank 1 or 2 Rank 3 or 4

Source:Nokia&Omdia.

Figure 6: Top 5G use cases, Asia-Pacific and EMEA (Europe, the Middle East and Africa)

28%

14%

14%

24%

24%

7%

28%

28%

41%

17%

21%

24%

Fixed wireless access

Video surveillance and analytics

eHealth services

Cloud robotics and process …

Machine remote control

Immersive experiences

Smart stadiums

Connected vehicles

Europe, Middle East, Africa

Rank 1 or 2 Rank 3 or 4

48%

41%

17%

24%

25%

12%

12%

33%

22%

4%

33%

35%

39%

14%

25%

14%

Fixed wireless access

Video surveillance and analytics

eHealth services

Cloud robotics and process …

Machine remote control

Immersive experiences

Smart stadiums

Connected vehicles

Asia Pacific

Rank 1 or 2 Rank 3 or 4

45%

47%

22%

18%

Source:Nokia&Omdia.

Page 10: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 10

Opportunities and challenges

Use Case Analysis and CSP perspective

Video surveillance and applications(includessecuritymonitoring)

VideosurveillanceandrelatedapplicationsrepresentaconnectivityusecasesimilartoFWA.AswithFWA,services inthiscategorycanbecommercializedtoday.Nospecializedcameraequipmentisneeded:current-generation cameras can be connected to 5G via Ethernet cable or Wi-Fi. Video surveillance and applications also have a wide rangeofusesacrossindustryverticals,includinggovernmentandmanufacturing.

Top challenges identified by CSPs: • Deviceavailability(citedby34% ofrespondents)

• Currentstateof5Gtechnology(30%)• Go-to-marketstrategy(24%)

Immersive experiences The low latency and high bandwidth of 5G are ideally suited to supporting AR and VR applications. Yet it remains aquestionhowmuchofthevalueofthoseapplicationswillflowtoCSPs:withvideoin4G,forexample,therevenues gomainlytothecreatorsanddistributors,notthenetwork.BecauseconsumersmaybeinclinedtouseWi-Firatherthan5GforARandVRentertainment,CSPswillwanttolookatother,morecommercialapplicationsinindustries suchashomeremodeling,constructionandoutdooreducation.

Top challenges identified by CSPs: • Returnoninvestment(33%)• Currentstateof5Gtechnology(30%)• Deviceavailability(27%)

Smart stadiums Whilesmartstadiumsofferanexcellentshowcasefordemonstratingtheabilityof5Gnetworkstosupportahighnumberofusersinanenclosedspace—andwithgoodperformancedespiteenvironmentalobstaclessuchas concrete,metalandglass—thisusecasepresentsseveralchallengesforCSPs.Theseincludetherelativelylimitednumberofstadiumsinanygivenmarketaswellastheneedtoestablishpartnershipswithstadiumowners,content,application and platform providers.

Top challenges identified by CSPs: • Deviceavailability(30%)• Returnoninvestment(27%)• Networkdeployment(26%)

Cloud robotics and automation Theconnectivityinvolvedwithcloudroboticsandautomationissimilartovideosurveillance,butthebusiness modelismorecomplexduetoquestionsaroundwho“owns”theconnectivity—theCSPortheenterprise. CSPswithexperienceinmanufacturingtodaysaytheindustrydemandsagreatdealofcustomization,making itnotsoconducivetoscaling.Aswell,notallCSPshavego-to-marketchannelssetupforthemtoworkwithmanufacturers.

Top challenges identified by CSPs: • Deviceavailability(40%)• Currentstateof5Gtechnology(40%)• Go-to-market(25%)• Networkdeployment(25%)

Machine remote control The business model for machine remote control will include both mass market solutions that can scale and “bespoke” customsolutions.Themaintypesofremote-controlledmachinesaredrones,cranes,roboticarmsandheavymachinery,allofwhichhaveapplicationsinawiderangeofindustriesfromconstructiontooilandgasandmining. Ofthemachinetypes/applications,dronesseemtohavethelargestaddressablemarket—surveillancedrones inrescuemissionstohelpfindpeople,formedia-useaerialvideoandphotography,remotelocationandpipelinemonitoring,constructionsiteinspectionandmore.Becauseminingoccursonlyinselectedareas,thenumberof CSPswhowillbeabletocapitalizeonthatmarketwillbelimited.Thesameistrueforcranes.Generally,coverage is a key concern: remote-controlled machines need to be reachable wherever they’re deployed.

Top challenges identified by CSPs: • Go-to-market(32%)• Currentstateof5Gtechnology(30%)• Deviceavailability(28%)

OursurveyofCSPsrevealedthateachusecasecomeswithitsowndistinctprosandcons—opportunitiestoexploitandchallengestoaddress.

Page 11: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 11

Connected vehicles This use case will take time and extensive ecosystem-building to mature: fully autonomous vehicles are stillalongwayoff,withtechnical,regulatory,legalandinsuranceissuesallremainingtobeaddressed. Whentheautonomousvehiclevisionisrealized,howmuchdatatrafficwilltraversethepublicmobile network versus third-party private networks or via direct vehicle-to-vehicle transmission is yet to be seen. Whilein-carentertainmentfallsintotheconnectedcarcategory,itisalreadybeingdeliveredwithLTEand personaldevices,sotheaddressablemarketforprovidingInternetservicedirectlytothevehiclevia5Gis not unlimited.

Separatefrommass-marketconnectedvehicles,theremaybeopportunitiesforCSPstosupportvehicles on closed campuses such as colleges or manufacturing facilities.

Top challenges identified by CSPs: • Establishecosystems(29%)• Returnoninvestment(29%)• Deviceavailability(26%)• Regulations(26%)

eHealth Whilepeopleoftenleaptofarther-out,morecomplexeHealthapplicationssuchasremotesurgeries,there are many near-term opportunities to be accessed: wearables that monitor people’s health statistics and provide informationtoinsurancecompanies,remotediagnostictools,advancenotificationandcommunicationbetweenemergencyrespondersandhospitals,andmore.Governmentregulationswillhaveasignificantimpactonthe eHealth use case at a market level. The U.S. is likely to be one of the leading countries in this area due to its for-profithealthcaresystem.

Top challenges identified by CSPs: • Deviceavailability(33%)• Currentstateof5Gtechnology(33%)• Returnoninvestment(24%)

Use Case Analysis and CSP perspective

Page 12: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 12

One reason CSPs prefer eMBB and FWA fortheirfirstexplorationsof5Gisthatthey can deliver those services with partners they already have: network and device vendors. While application and channel partners may also be important to these mobile broadband scenarios,theyarenotascriticalasthenetwork and devices to creating a successful service.

Other 5G use cases will require new kinds of partnerships. In our survey of CSPs,weaskedasubsetofrespondents1 to identify the three most important partnerships they’d need to establish to deliver those uses cases. The top answers were applicationandplatformdevelopers,system integrators and vertical specialists. The harder CSPs perceived thosepartnershipswouldbetoform,the lower their interest in the associatedusecase—withtheexception of machine remote control.

If new partnerships are an external prerequisiteforadvanced5Gusecases,newskillsareaninternalone.However,inthiscase,thesurveyfoundthatthemore interest a CSP has in a particular usecase,thelessconcernedtheyareabout potential skills gaps in their present teams—withtheexceptionofeHealth.

1 Each respondent was asked to identify the 3 most important partnerships only for the use cases they ranked as their top four.

Venturing into unfamiliar territoryFigure 7: Confidence in employee skills

Fixed wireless access

Video surveillance & analytics

eHealth

Cloud robotics & process automation

Machine remote control

Immersive experience

Smart stadiums

Connected vehicles

Operator interest in use case ranked highest to lowest

(tie) Connected vehicles; eHealth

(tie) Video surveillance & analytics; cloud robotics &

process automation

Fixed wireless access

Immersive experience

(tie) Machine remote control; smart stadiums

Operator ranking of employee skillset as challenge to use case ranked highest to lowest

Source:Nokia&Omdia,ICTEnterpriseInsights2018-2019

Page 13: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 13

Omdia’s annual enterprise technology study asked companies to rank their top three expectedbenefitsfrom5G,choosingfrom apredefinedmultiple-choicelist.Favorableresponses for “reducing dependency on fixedWANservices”and“rapiddeployment of broadband connectivity to new sites” support the case for CSPs to start by offering5GFWA—andhowtheymightmarket it.

Yet the views of enterprises and CSPs of 5G don’t always match. The left column in Figure 9 shows how the CSPs we surveyed ranked the revenue potential of eight industry verticals. The right column shows how companies in those same verticals ranked the potential impact of 5G on their businesses when responding to Omdia’s annual enterprise survey.

How enterprises see 5GMostnotably,CSPshaveamuchmorepositive outlook toward 5G’s revenue potentialfromcompaniesinthefinancialservices and utilities sectors than businesses in those sectors perceive the potential value of 5G for their business. CSPs’ outlook is heavily influencedbywheretheyaremostestablished today – many tell us that financialservicesandmediaandentertainment sectors make up a significantamountoftheircurrententerprise revenue. While CSPs believe thereisanopportunitytomonetize,they’ve yet to identify and communicate to these sectors the 5G use cases that could be impactful.

Figure 8: The benefits enterprises expect from 5G

Source:Omdia,October2019.ICTEnterpriseInsights2019–20.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Reducing my dependency on fixed WAN services

Extending my IoT strategy to cover more locations or devices

Obtaining a higher class of service for certain applications

Rapid deployment of broadband connectivity to new sites

Leveraging mobile edge-computing/cloud to edge computing

Benefiting from lower latency

Providing employees with faster mobile broadband when they are …

Provision of our own dedicated or private mobile infrastructure

Top 1Sample size = 328 Top 2 Top 3

Figure 9: CSP and industry perceptions of 5G

Source:Nokia&Omdia

ThesefindingsrevealthatCSPsneedtolearnmore about some of these industry verticals and do a better job of educating enterprises about thewaystheycouldbenefitfrom5Gservices.ThisrequiresanattitudinalshiftfromCSPs—away from thinking in terms of selling technology toward selling solutions to problems.

Thatmeanswhendeveloping5Gservices,CSPsneed to focus on the business intent they can fulfillwiththeirtechnologyandreflectthatintheir marketing approach. Talking about “low latency”,forexample,meansnothingtoacustomer that doesn’t understand how low latencywillbenefitthem.“Providingthereal-timecontrol to deploy remote-controlled machines thatboostproductivityandpersonnelsafety,” ontheotherhand,mightresonatestrongly.

ManufacturingFinancial Services

Media Entertainment

Healthcare/Energy & Utilities (tied)

Manufacturing

Retail

Automotive

Government

Agriculture

CSP ranking of vertical industriesby revenue potential

Financial Services

Media Entertainment

Healthcare

Retail

Education (not asked in Nokia survey)

Government

Utilities

Omdia ICTE survey: Industry vertical ranking of 5G as being most impactful

Biggestranking gaps

Page 14: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 14

Setting your 5G use case strategyWhile CSPs have concerns about 5G device availability and network readiness,theexperienceofpreviousgenerationalmigrations—from2G to3Gand3Gto4G—showsthosetechnical issues will be dealt with in time. More pressing are the business and commercial challenges related to choosing a strategy for choosing the right 5G use cases and service offerings.

Basedonthefindingsofoursurvey,thereisadefinitecorrelationbetweenCSPs’ concerns and their levels of interest in a given use case. When their concerns pertain to network anddevicepartnerships—knownquantities—interestishigher. When concerns instead are about go-to-marketstrategies,returnoninvestment and other commercial issues,interestislower.

So what can CSPs do to ease their fears and advance their 5G service strategies? Generally speaking the answer is twofold: take an incrementalapproach,andpursueservices that are relevant to their ownspecificcontexts.

Figure 10: Top challenges related to 5G strategy

Source:Nokia&Omdia.

Take an incremental approachWhile there are plenty of unknowns and uncontrollable variables associated with launching5Gservices,CSPscanmitigateriskbybreakingtheworkdownintomanageable steps and leveraging what they’re already doing today. This is alreadywhat’shappeningontheinfrastructureside,wherevendorshavesuggestedCSPsuseLTEtointroducetechnologiessuchasMIMO(multipleinput,multipleoutput)intothenetworktogetexperiencebeforeapplyingthemto5G.

The same can be done with services. Rather than try to design from scratch an advance5Gserviceforanautomatedfactory,forexample,aCSPmightfirststartdeliveringmanufacturing-orientedservicesusingLTE.Videosurveillance,machine monitoring and private network solutions can all be delivered today. CSPs don’t have to wait for full ecosystem development. But as 5G-type services aredevelopedanddeployedinLTE,CSPscanbegintobuildthenewkindsofthird-partypartnershipsthatwilleventuallybeneeded—insteadofmigrating to 5G and starting then.

Choose services that fit your contextWhilethereareagreatmanystrategic,practical and market factors to weigh in choosingaspecific5Gservicedirection,a few key questions can help CSPs start offalongtherightpath:

• What industries are in your service footprint — and do you already have relationships with customers in those segments? When talking to CSPsaboutearlyusecases,most saidtheirfirstadvanced5Gserviceofferingsweretoenterpriseswithwhom they already had relationships or who had approached them directly.

• Could any of your current enterprise services be enriched with 5G? That can provide a simple incremental way to shift from 4G to 5G.

• Would the service you’re considering require you to partner with an external third party or hire and train new people? Thesearen’tnecessarilybarriers,butwill add a further layer of complexity to providing a commercial 5G service.

• Can the service be replicated and scaled, or does it have to always be customized? Customized services are good way to get initial exposure to an industry vertical and new applications but are limiting in the long term because theyaredifficultandresource-intensiveto scale. CSPs should be selective aboutofferingcustomizedservices,choosing ones that could eventually become repeatable and scalable.

Business case & go-to-market

Device sourcing & interoperability

Network & operational interoperability and integration

47%

34%

19%

Page 15: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Beyond connectivity: CSP perspectives on higher-value 5G use cases 15

ConclusionThe promise of 5G is real. The potential market is enormous. Capturing it will require CSPs to proceed incrementally—startingwithservicesthatextendnaturallyfromtheir4Gbusinessestodayandbuilding future-ready partnerships as they go. It will also require a careful watch of global trends to identifybestpracticesand,atthesametime,alertnesstoregionalmarketsandtheneedsoflocalcustomers.

Finally,selling5GsolutionswilldemandanewapproachfromCSPs,focusinglessontechnologythanonthebusinessneedstheirtechnologycanmeet.Bybecoming“problemsolvers”fortheircustomers,5GCSPswillboosttheirperceived(andreal)valueandcrackopentheenterpriseopportunity.

Appendix: MethodologyThedatainthisreportcomefromasurveydevelopedandfieldedjointlybyNokiaandOmdiabetweenlateSeptemberandearlyOctober2019.Allrespondentsworkedformobileoperators,converged(fixedandmobile)operatorsormobilevirtualnetworkoperators(MVNOs)withaminimumoffivemillionsubscribers.Allrespondentshadrolesincorporatestrategy,networkplanning,productdevelopment,orsalesandmarketing.

Intotal,172individualsrespondedtothesurvey,inthefollowingproportions:

• AsiaPacific:30%(51)

• Europe,MiddleEastandAfrica:48%(82;WesternEurope53,EasternEurope17,MiddleEastandAfrica12)

• NorthAmerica:6%(10)

• LatinAmerica:17%(29)

Inconjunctionwiththeonlinesurvey,Omdiaconductedqualitativesurveyswith10CSPsfromvariousregions.Thesewerecarriedoutbothface-to-faceandoverthephone,withtheaimofaddingcontexttotheonlineresponses.

AdditionaldatacitedherecomesfromOmdia’sannualICTEnterpriseInsightsresearch,whichisbasedonsurveyswithmorethan6,000seniorITexecutives.ItexaminesICTinvestmentstrategyfromanindustryperspective,providingline-of-businessdepthacrossthefinancialservices,telecoms,media,publicserviceandenergysectors.Itprovidesexecutiveperspectivesonarangeoftopics,includingbusiness/ITdrivers,ICTspendallocation,andinvestmentprioritiesandapproachbyindustryandtechnology.

Next stepsExplore a library of 5G use cases to findsuccessstoriesanddiscoverhowyou can monetize your investment.

Schedule a presentationPlease contact us to discuss thefindingsof this research in more detail.

Learn more

Contact us

Page 16: Beyond connectivity: CSP perspectives on higher-value 5G ... · in place. Plus, there is demand. Omdia forecasts that, within five years, 5G eMBB alone will account for roughly 18%

Nokia OyjKaraportti 3 02610 EspooFinland

Document code: SR2001041183EN (February) CID207152

About NokiaWecreatethetechnologytoconnecttheworld.PoweredbytheresearchandinnovationofNokiaBellLabs, weservecommunicationsserviceproviders,governments,largeenterprisesandconsumers,withtheindustry’s mostcomplete,end-to-endportfolioofproducts,servicesandlicensing.

Fromtheenablinginfrastructurefor5GandtheInternetofThings,toemergingapplicationsindigitalhealth, we are shaping the future of technology to transform the human experience. networks.nokia.com

NokiaisaregisteredtrademarkofNokiaCorporation.Otherproductandcompanynamesmentionedherein may be trademarks or trade names of their respective owners.

©2020Nokia

About OmdiaOmdiaisamarket-leadingdata,research,andconsultingbusinessfocusedonhelpingdigitalserviceproviders, technologycompanies,andenterprisedecision-makersthriveintheconnecteddigitaleconomy.

Throughourglobalbaseofanalysts,weofferexpertanalysisandstrategicinsightacrosstheIT,telecoms, and media industries. n etworks.nokia.comWecreatebusinessadvantageforourcustomersbyprovidingactionableinsighttosupportbusinessplanning, productdevelopment,andgo-to-marketinitiatives.Ouruniquecombinationofauthoritativedata,marketanalysis, andverticalindustryexpertiseisdesignedtoempowerdecision-making,helpingourclientsprofitfromnew technologies and capitalize on evolving business models.

OmdiaispartofInformaTech,aB2Binformationservicesbusinessservingthetechnology,media,andtelecoms sector.TheInformagroupislistedontheLondonStockExchange. tworks.nokia.comWe hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements,Omdia’sconsultingteammaybeabletohelpyourcompanyidentifyfuturetrendsandopportunities.