Nearly 80 Percent Of APAC Service Providers Expect 5G
Amdocs, a leading provider of software and services to communications and media companies, announced the findings of a new survey that reveals that nearly 80 percent of APAC CSPs expect the introduction of 5G to expand revenue opportunities with enterprise customers. It also finds that 9 percent of operators plan to offer 5G services commercially to this sector by the end of 2019, a figure that will increase to 47 percent by the end of 2020.
Conducted by market research and consultancy firm IDC, on behalf of Amdocs, the survey interviewed C-level executives and other senior management from 105 communications service providers across North America, Europe and Asia Pacific. The Asia- Pacific countries included New Zealand, Australia, India, Japan, Malaysia, Pakistan, Philippines, Thailand, Afghanistan, Bangladesh, Singapore, and Sri-Lanka. In-depth qualitative interviews were also conducted with a selection of respondents.
“Operators of 5G networks can support mission-critical enterprise communications, with a performance backed by service-level agreements,” commented John Delaney, Associate VP of Mobility Research at IDC. “Our research shows that mobile operators are optimistic about the potential for 5G to support an expansion of their role in the enterprise market.”
“The survey clearly demonstrates that operators see 5G as a means to restore value around core connectivity services for business customers,” said Matthieu Loreille, VP Head of Consumer, Enterprise and Technology Marketing at Amdocs. “5G technologies such as network slicing will allow them to tailor the performance, security level and characteristics appropriate to each business, opening up differentiating monetization opportunities. Furthermore, by leveraging additional technologies such as artificial intelligence, edge computing and hybrid cloud, operators will be strongly positioned to support enterprises in their digital transformation journey. Effectively, this enables them to shift connectivity to the heart of their solutions with meaningful value-added services on top such as cybersecurity, cloud migration, hybrid cloud operations and many more.”
Regarding Network as a Service (NaaS), Loreille added, “5G, together with complementary technologies such as cloud, network softwarization, virtualization and automation will make this service a reality for business customers. This will enable them to build their own networks, aided by intuitive self-service portals that enhance the enterprise digital customer experience. But it is against this background that the diversity of 5G-enabled service offerings and new ways of consuming them will stretch the IT supporting stack, meaning that in many cases, they will need to be gradually modernized.”
- Operators are geared up to seize the first mover advantage: Evidence points to the existence of a race mentality. Operators in APAC are confident about being first to market with 5G enterprise services, with 63% claiming they will achieve this.
- Customer demand is driving 5G progress: Over 66% operators in APAC confirmed their enterprise customers have already expressed interest in 5G services. Operators in the region are responding to this demand, with 47% expected to roll out enterprise services by end of 2020.
- New revenue opportunity is the primary driver: Nearly 80% operators expect 5G to expand revenue opportunities with enterprise customers, with 43% predicting they would be able to grow their revenue by 5-10% within the first two years. Furthermore, most operators in APAC are optimistic that they will be able to leverage early 5G deployments to enhance existing enterprise services, such as Fixed-mobile convergent (FMC) communications, fixed-mobile substitution (FMS), unified communications as a service (UCaaS) and software-defined wide area network (SD-WAN). Operators in APAC have identified manufacturing as the sector that offers the most revenue potential for 5G. This is closely followed by government and public sector in second place, while automotive and manufacturing jointly occupy the third spot. These players will be exploring new routes to market for rolling out 5G services to businesses, with over 41% planning to leverage strategic partnerships, specifically to cultivate a 5G ecosystem by constructing a platform for industry verticals to experiment with 5G business models.
- Leading use case is FMS: Nearly all operators in the region believed the overwhelming use case for 5G in the enterprise will be to replace existing fixed-line connections with mobile services. This was backed up by their claims that the most common types of devices they expect to ship to support 5G services in the early stages will be routers, PC dongles and eventually, handsets.
- Reducing operational expenditure is another key motivator: 77% expect to achieve a greater than 10% reduction in operational expenditure once 5G is deployed. Primarily, this is likely due to the role of artificial intelligence and machine learning in increasing automation of 5G operations and maintenance. Operational cost reduction will also be driven by software-defined self-service and provisioning, efficient 5G radio wave forms squeezing more value from spectrum assets, and virtualization enabling 5G networks to be controlled by commodity servers in data centers.
- New and enhanced software systems are critical: Creating and monetizing new 5G enterprise services will require significant enhancements to the OSS/BSS and other software systems. More than 80% believe that upgrading their OSS/BSS and deploying virtualized network infrastructures will be essential for delivering 5G enterprise services. These were both areas that respondents in the accompanying in-depth interviews described as top-of-mind. Furthermore, nearly 72% felt artificial intelligence and machine learning packages will be critical to ensuring a better customer experience, while over half said they would need to enhance their service orchestration tool (e.g. ONAP).
- Market education and expectations setting will be crucial: Nearly 20% indicated that enterprise demand is lacking for 5G services. However, 66% said that their enterprise customers have either expressed interest or were actively pushing them for specific 5G-enabled services. This means that operators will need to upgrade their vertical-specific domain knowledge to convert interest into commercial applications and services once 5G capabilities are rolled out. Also, they will have to educate the market with specific use cases and set their customers’ expectations around business benefits to attract those customers who show little to no active interest in 5G.—Newspatrolling
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