EY

5G providers “need to reinvent themselves”

26 February 2020 | Melanie Mingas

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Forming the right partnerships is likely to be a key success factor for enterprises working to unlock the potential of 5G, according to the findings of a new study by EY.

However, providers of 5G infrastructure and services must “reinvent themselves as trusted partners”, if the rollout is to be successful.

In the Maximizing the 5G opportunity for enterprise report, 79% of 1,000 global respondents said they expected to require external support for 5G rollout. Further, 77% said vendor partners that can prioritise 5G business outcomes as partners would be preferred over those offering “pure cost benefits”.

The report read: “Notably, 60% indicate that their organisation is currently struggling to identify the right 5G vendor, and 67% say their vendor interactions to date have largely been transactional and tactical.”

“It's clear that enterprises now want consultative dialogue that delivers business outcomes through end-to-end solutions,” said Adrian Baschnonga, EY Global’s telecommunications lead analyst.

“5G providers need to reinvent themselves as trusted partners, prioritising access to an ecosystem of competencies that can deliver 5G capabilities at scale. Delivering actionable solutions that encompass the full spectrum of enterprise needs – from use case creation to cybersecurity – will be critical in the long-term,” he said.

Among the surveyed enterprises, 74% believed 5G will enter the fabric of their business over the next five years and, of those investing in 5G today, 67% are either engaging in trials or are in discussion with suppliers, rather than moving to the operational phase.

In terms of barriers to adoption, 37% said integration with existing technologies was a significant internal issue, while the “perceived immaturity” of 5G technology was the most cited external challenge, at 35%. Meanwhile, 75% reported knowledge gaps around use cases and 69% perceive 5G as “an incremental progression on 4G” – a sentiment echoed in other recent studies.

Geographically, the US is expected to lead global investment in 5G over the coming 12 months, with 48% of enterprises planning to invest over the period, compared with 43% in the Asia-Pacific region and 38% in Europe.

When it comes to current investment, the survey found 19% of US enterprises were currently investing, compared to 13% in Europe and 10% in Asia-Pacific.

“Enterprises are aware that 5G can fundamentally reshape their organisations. To succeed, they need to develop a road map that is aligned to the broader landscape of technology transformation, but anxieties persist around technology integration, maturity and cybersecurity,” said Tom Loozen (pictured), EY Global telecommunications sector leader.

“To overcome this inertia, 5G vendors need to articulate a more compelling vision of the opportunity, while enterprises need to educate themselves on the game-changing possibilities that go beyond efficiencies alone,” Loozen added.