By Rakesh Dawar, Segment Head, Tata Consultancy Services

5G isn’t coming. It’s already here – operational in several places in the US, in South Korea and in a host of UK towns and cities. 

For consumers, it promises faster speeds, better connectivity and a new generation of connected devices, from wearables and smart-home kits, to the smart-city vision that can be realized on top of platforms enabled by internet of things (IoT).

For communication service providers (CSPs) looking to monetize 5G-based services, it presents a wide landscape of both opportunities and challenges. While customers are awaiting the promise of speed and zero-touch with 5G, there is a reluctance to pay a premium for services (apart from gaming and trading). This forces CSPs to “push” services to customers.

With regulators providing clarity around unlicensed and licensed spectrum, the vision of a resilient and reliable 5G network is about to be realized. This should enable CSPs to launch new offerings. But we expect they won’t be the only ones.

If CSPs don’t step up their game, especially with service innovation, they may be left behind as the big consumer technology companies – Apple, Netflix, Facebook, Google and the like – move in. 

We see many of these businesses are already expanding into new areas like payments, which didn’t used to be core to their business, and would once have been inconceivable. Hence the belief that 5G will create opportunities for these consumer technology and social giants to branch out even more, offering their already loyal customers new and innovative services.

Combination, collaboration, and customer-centric innovation

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Sometimes the most complex of scenarios can be distilled into simple choices. One of the questions facing CSPs in the 5G era will be, “do you want to stay in your comfort zone or reach out into new fields?” And, closely related, “do you want to be a big fish in a small pond, or a smaller fish in a bigger pond?” 

For CSPs wanting to break into the potentially lucrative markets that will emerge around 5G, finding partners to work with can offer shortcuts to new streams of revenue and more engaged customers.  This might also involve working with industry specialists like automotive companies, IoT developers and other vertical sectors. 

Partnerships like this, which bring a telco and an enterprise together, should help in the creation of bundled solutions that combine the best of both. A CSP’s ability to offer quality of service can be added to another business’s knowledge of specific customer expectations, driving personalization and enhancing the end-customer experience.

To better monetize the opportunities, CSPs must understand the type of applications and services that customers are willing to pay for and develop business models with partners that ensure equitable payment to all parties.

Ecosystems, innovation and more

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5G will unlock a world of applications and use cases across both the enterprise and consumer segments, giving CSPs a fantastic opportunity to pivot their monetization strategies around new services and enhanced digital experiences. 

But that calls for such strategies to be based on more than customer-facing speed and security propositions. Instead, it will be important to identify commercial opportunities across a broader industry ecosystem. 

Content owners, streaming companies, and consumer device manufacturers will all be reliant on connectivity. CSPs will be uniquely placed to sit at the crossroads of the interests of all these businesses. That means being able to develop services for consumers, of course, but also those that other stakeholders a 5G ecosystem can build upon.

According to the Next Generation Mobile Networks Alliance: 5G “is positioned to address the demands and business contexts of 2020 and beyond. It is expected to enable a fully mobile and connected society and to empower socioeconomic transformations in countless ways, many of which are unimagined today, including those for productivity, sustainability and wellbeing.” 

CSPs can already demonstrate their value by underpinning smart-city IoT services or supporting live-gaming events, all of which require ultra-high reliability, higher throughput, and lower latency.

As customer expectations of 5G’s ability to deliver superior experiences grows it will be increasingly important to meet and exceed them. 

Service providers who fall behind risk being left out as the market changes.  For CSPs this means the chance to grow their own revenue opportunities expands, while helping other businesses adapt to the change.