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CSPs trail business customers in 5G ambition

Survey claims to show lack of determination driving disconnect between communications service providers and business customers, threatening lucrative business-to-business 5G revenues

A study from SaaS-based digital platform solution provider BearingPoint//Beyond suggests that communications service providers (CSPs) are failing to develop business-to-business (B2B) systems that are critical to the commercial success of 5G, and that users of 5G services are more ambitious about the role CSPs will play than CSPs are themselves. 

BearingPoint//Beyond commissioned a large-scale sample to examine the real attitudes of both CSPs and business customers towards 5G, and the potential role of CSPs in the 5G era.

Conducted and analysed in late-2019, the research from Coleman Parkes interviewed 250 technology decision makers from 100 larger enterprises and 150 small to medium-sized enterprises SMEs – in verticals such as manufacturing, financial services, retail, health, education, transportation and media – across Europe, Asia and North America. Some 90 senior executives within CSPs were also surveyed from these three regions.

The survey, If B2B is the ‘North Star’ for 5G revenues: how do CSPs get there?, found that CSPs anticipate a 15% increase in current revenues from B2B 5G services on average across Europe, Asia and North America.

This is significant in an industry struggling with sub-2% compound annual revenue growth (CAGR). Three-quarters of enterprises and SMEs believe 5G will be important to their business citing speed, reliability and more advanced solutions as key reasons.

European CSPs were found to be pinning their 5G hopes on 4G business models for both consumer services and enterprise connectivity. Only a third of CSPs believe their role will extend beyond simple connectivity and infrastructure offerings, and just a tenth of European CSPs believe they will become ecosystem orchestrators.

From a user side, 92% of European businesses believe CSPs have a bigger role to play than just providing communications and connectivity. Almost seven in 10 want CSPs to offer 5G products that combine their assets with those of partners. Enterprises said that they want to work with CSPs to develop 5G solutions because they can orchestrate ecosystems, manage complex programs and understand 5G technology.

Not surprisingly, North American CSPs expressed the highest amount of confidence and ambition. More than three-quarters of CSPs agreed that creating vertical-specific solutions using ecosystems of partners represented a big 5G opportunity.

Two-fifths of CSPs expect to become ecosystem orchestrators, and this desire is especially true in North American businesses – 96% believe CSPs have a bigger role to play, citing ecosystem orchestration, complex programme management and flexibility as reasons they want to work with CSPs to develop 5G use cases.

In Asia, the report revealed that more attention was being paid to 5G connectivity-driven models than higher value solutions by Asian CSPs, with just 17% seeing themselves as ecosystem orchestrators. Yet, at the same time, 94% of Asian businesses believe that CSPs can do more than provide communications and connectivity – nearly seven in 10 think CSPs should offer sophisticated services using an ecosystem of partners. As with North America, ecosystem orchestration, complex programme management and their knowledge of 5G make CSPs attractive partners for Asian businesses.

Summing up its conclusions regarding the report, BearingPoint//Beyond said that while it was evident that businesses want to buy 5G and CSPs want to sell 5G, the problem was that CSPs want to just sell connectivity and standardised “connectivity plus infrastructure” products, while businesses want to buy more sophisticated, complete solutions that better fit their needs and require the integration of multiple technologies from multiple players.

BearingPoint//Beyond said that CSPs must look to broaden their role from communications to providing the broader technologies that support business customers. It added that they need to collaborate with customers to co-innovate and co-create more compelling and sophisticated solutions with a wide range of ecosystem partners, including OTTs, web-scale companies, vertical specialists, and even competitors, to meet the demands of business customers.

“CSPs must learn the art of ecosystem orchestration if they want to monetise 5G at scale,” said BearingPoint//Beyond CEO Angus Ward in a call to action. “Businesses don’t want to build these solutions themselves. And while the vast majority would happily work with CSPs, they’re not waiting around – businesses are already partnering with other companies to solve their business problems. They must move quickly.

“In 5G B2B terms, CSPs are pushing at an open door. 98% of European businesses, 92% of Asian businesses and 87% of North American businesses are willing to buy advanced solutions from their CSP. But these must be solutions that address their specific business needs. The only way CSPs can achieve this is orchestrate ecosystems of partners to co-create compelling new solutions that embed 5G.”

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