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Enterprises are looking to 5G to help alleviate immediate business pressures brought by the Covid-19 pandemic and related global events, but are taking a defensive approach towards the technology, seeking to bolster business resilience, meet corporate priorities and respond to stakeholder demands, according to a study from professional services firm EY.
The third edition of the EY Reimagining industry futures study, which surveyed 1,000 enterprises globally, revealed that 5G leads all other emerging technologies tracked in the study in terms of future spending intentions, with more than half (56%) of UK businesses planning to invest in it within the next three years.
But despite this promising outlook for adoption, enterprises were found to be less confident than before that they could deploy 5G to the best of their ability. Only 18% said they were very confident that they could successfully implement 5G – down 4% year on year.
This was compounded by what EY said was enterprises’ poor understanding of 5G’s relationship to other emerging technologies. Cited by 43% of respondents, this ranked as the biggest internal challenge to 5G perceptions. Advanced 5G use cases featuring virtual or augmented reality were cited by just 22% of UK respondents as a key application, compared with 49% who favour process optimisation.
A range of external factors were underpinning this defensive approach to 5G. Four-fifths of respondents said the impact of the global health crisis had driven their interest in 5G, up from 62% in last year’s study. Also, 79% said supply chain disruption has galvanised their 5G pursuit, while 68% cited the focus on environmental, social and governance issues.
However, there is some way to go to realise these ambitions: 40% said they were concerned that 5G and internet-of-things (IoT) suppliers’ current use cases did not meet their business resilience and continuity needs, and 51% did not think their sustainability goals were addressed by today’s use cases.
Focusing on the UK, the study observed the growing appeal of private networks as telcos battle the credibility gap. UK enterprises were found to be increasingly receptive to 5G solutions delivered through disruptive business models. Nearly three-quarters (71%) were interested in using private networks to support implementation of 5G and IoT use cases, and 66% were interested in buying 5G through an intermediary.
Meanwhile, telcos were seen as facing a significant credibility gap. Only 13% of enterprises viewed telcos as digital transformation experts – down from 19% the previous year. Conversely, 33% trusted network equipment suppliers as favoured digital transformation experts – up from 13% a year ago.
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Three-fifths of respondents said they already collaborated with other organisations as part of a business ecosystem. However, EY believes the findings indicate that businesses are being bolder in their approach to partnerships, with 38% seeking vertical partnerships with companies in other sectors (up from 20% last year), and 65% prioritising suppliers that can offer ecosystem relationships as part of their 5G capabilities.
Looking at the trends emerging from the study, Praveen Shankar, UK and Ireland technology, media and telecoms leader at EY, noted that while the hype continues to build around how 5G’s low latency could power the metaverse or commercialise augmented reality, the study showed that the technology has moved out of its infancy, with enterprises’ interest now fuelled by real-world challenges and with 5G following the same innovation cycle of other transformative technologies.
“Sophisticated use cases will become important in time,” he said. “More pressing, however, is the need for 5G providers to adapt their solutions to the practical demands of Industry 4.0 today. Disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure and more agile go-to-market strategies are essential in a 5G-IoT world. Telcos should take steps now to ensure that they can meet enterprise demand for private network deployments.”
Adrian Baschnonga, global telecommunications lead analyst at EY, added: “There are still fundamental anxieties around how 5G works alongside other emerging technologies. 5G providers should take this on board and adapt their customer discussions accordingly. By educating enterprises on how 5G can be harnessed by other emerging technologies, service providers can boost enterprise confidence in their 5G deployments.”