Enterprise 5G projects double while CSP market share drops 5%

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The number of enterprise 5G projects doubled over the course of the last year, but the share of projects awarded to CSPs declined by 5%.

Research released Wednesday by BearingPoint and Omdia found that in the past 12 months, demand from enterprises pushed 5G projects, however, the share of deals awarded to CSPs dropped from 21% the previous year to 16%. Alternative service providers, meanwhile, increased their share of enterprise 5G deals from 7% last year to 27% this year. 

Commenting on the findings, Angus Ward, CEO, Beyond by BearingPoint said: “CSPs are no longer trapped in their thinking and understand that enterprise 5G is an ecosystem play, which is good news. However, despite developing and launching new strategies and forming partnerships, CSPs failed to move at the speed of enterprise demand. It’s clear that enterprises are eager to adopt 5G solutions and reap the benefits the technology can bring to their businesses but these findings can only lead us to one conclusion: CSPs understand the opportunity, but their determination and speed are lacking."

Ward continued: “CSPs need to stop hesitating and continue to be more collaborative even when they may not be in full control of the product or solution. They must start living up to the expectations that enterprises and partners have of them, experimenting with business models, accelerating testing and monetising new offerings that are co-created with ecosystems of partners.”

In their 2020 research, BearingPoint and Omdia found that 72.3% of CSPs believed that most 5G revenues would be derived from B2B, B2B2C, or government/smart city opportunities, but now only 21% of enterprise 5G deals are led by CSPs. In 40% of the deals CSPs were the secondary supplier, while 32% were led by enterprises and 7% by alternative service providers.

BearingPoint and Omdia said this year's study reveals how "CSPs now realise that solution-oriented production models also require mastering multiple technologies (such as cloud, edge, AI, Wi-Fi 6, etc) and partnership options to complement 5G networks". It was concluded that CSPs are "still too slow to react to enterprise demands".

“It’s clear the enterprise 5G market is not just about connectivity. CSPs need to prove their prowess in security, network architecture and design and demonstrate commercial creativity to win the trust of enterprises to do more,” said Evan Kirchheimer, research VP, service provider and communications, Omdia.

“CSPs have technological assets and expertise. To bring these to life and monetise them in the 5G world they will need to form relationships with new partners and think creatively about what type of partner organisation will help them address the enterprise opportunity.”

Further, the report emphasised the need for CSPs to assimilate lessons such as agility, speed and focus from alternative service providers; they must accelerate into the enterprise market and not wait for network slicing, complete 5G coverage, or other 5G capabilities. It also highlights that 5G network design is only one component of enterprise digitalisation and that CSPs need to offer additional value to become preferred partners, demonstrating more flexibility within their commercial and business models. 

Ward added: “Despite the headline figures, we remain optimistic about the ability of CSPs to turn the situation around. The 5G enterprise game is far from over.

“Many global and regional CSPs have now launched 5G enterprise services, still more now understand the need for a multi-technology, omni-partner, solution-oriented and verticalised approach for enterprise 5G. This is really encouraging. But as an industry, CSPs need to move faster, orchestrate ecosystems and fully commit to enterprise 5G in order to capitalise on the opportunity.”