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5G to be first mobile generation to have bigger impact on enterprises than consumers

GSMA Intelligence report says 5G could see private enterprise networks explode and become a competition battleground between telcos and cloud companies within five years

As telecoms operators in the leading economies rush to launch 5G networks, the real prize will come not in being first to mass consumers, but instead being able to addressing enterprise needs, according to the fourth annual Global mobile trends report from GSMA Intelligence.

The report covers topics such as the future of devices, the implications of the 5G era, enterprise internet of things (IoT) and Industry 4.0, and media and content. It predicts a future for 5G in which private enterprise networks explode and become a competition battleground between telcos and cloud companies within the next five years.

Even though it says 2019 is Year Zero for commercial 5G – with 33 operators across 18 countries launching commercial 5G mobile services as of early October 2019 – the research points out that the pace at which 5G network coverage extends to national scale depends on the country. For example, European telcos are said to be playing a long game and GSMA forecasts 5G coverage to be only 40% by 2021, reflecting a cautious investment sentiment and remaining headroom for LTE (long-term evolution).

GSMA predicts that, globally, 5G take-up will reach 18% of the population base by 2025, although this will be heavily skewed to a few early-adopter countries. Even though this would, in absolute terms, make 5G adoption slower than 4G on a comparable basis, the two networks’ growth would be equally efficient as a share of the addressable market.

However, unlike 4G, the extent to which 5G drives new revenue growth will come from selling into enterprises, says GSMA.

The report notes that companies in a range of verticals, such as manufacturing, power generation and aerospace, are evaluating options for digitising product assembly and general operations management and that this presents an opportunity for operators that can offer 5G with complementary infrastructure for low-latency service and analytics.

But it adds that the survey indicates that while a majority of enterprises recognise the speed gains from 5G, other improvements are not widely appreciated, and many still see 4G as good enough.

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GSMA describes enterprise digitisation as “a pond being waded into by multiple sectors” including telcos, cloud, SaaS (software as a service) and systems integrators. It says the challenge will be to move the conversation away from technology and towards a consultative mentality that solves problems.

Looking forward to network development, the Global mobile trends report suggests that the industry’s priority now should be to establish meaningful revenues from new business areas to repay infrastructure investments, reduce the pressure to cut costs and, ultimately, revive the overall sector.

It forecasts an increase in growth of just 1.3% a year to 2025, reflecting LTE upgrades in emerging markets and 5G adoption in the US, China, Japan and Korea. However, it notes that using 5G to sell into enterprises could deliver a step-change to this modest outlook.

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