After many years of development, the first commercial rollouts of 5G have finally begun this year. 5G will bring higher speeds, lower lag times, and larger data transfer capacity, but it will also bring much more. In addition to powering a new era of mobile that will enable personal technologies like self-driving cars and self-monitoring buildings, 5G will also transform the ways that businesses form connections and conduct commerce.
In fact, a big part of 5G’s commercial success will depend on the formation of new partnerships and services in industries outside the mobile industry’s tried-and-tested consumer markets. For these partnerships and services to succeed, mobile operators must invest in and put in place the technologies and processes to monetize these services, and they must ensure that every contributor and external partner in the value chain gets their fair share of revenue.
To take a closer look at this area, Syniverse recently conducted a study to assess one of the big unknowns with 5G: How will mobile operators actually begin to make use of 5G to provide new services for companies, and how important a part will these services play in operators’ business models? To find this out, we partnered with Heavy Reading to complete a global survey of operators and better understand their 5G preparations.
The findings point to some key implications for the steps that operators will need to take to prepare to monetize 5G. Specifically, to cultivate 5G business services, operators will need to be able to engage with customers, third-party service providers, application developers and device partners across a range of industries. Only then will they be able to collaborate in diverse ways to co-create the services required to meet the needs of different industries.
This collaboration will occur through ecosystems and partnerships, and this will be essential if operators are to properly monetize 5G and maximize their return on investment in it. However, these ecosystems also present new challenges for operators. Here’s a look at two of them, and two solutions for them informed by our study findings.
A new technology emerges for 5G clearing and settlement: blockchain
Monetization among partners was one of the main challenges cited by operators in the survey when asked about 5G services. On that point, 83 percent of respondents identified the security and immutability of charging and billing as their principal challenge when collaborating with others on 5G services.
To monetize a 5G ecosystem, each partner involved in delivering a service will need to be able to accurately charge for its contribution toward that service in a way that’s quick and low-cost, but also accurate and secure.
One solution that has emerged to meet these requirements is blockchain. In a blockchain process, a growing list of records, called “blocks,” are recorded, and the data is instantly and automatically duplicated onto all other connected computers on the blockchain. Because records can only be added using rules agreed to among the participants, they can’t be circumvented by individual actors, and the data becomes part of a reliable, unbreakable “chain” of trust.
In this way, blockchain has the potential to provide a new global network of secure distributed databases, and “smart contracts” that allow monetization of any transaction and independent, third-party validation of separate steps. And this capability makes it ideally suited to undergird new 5G marketplaces.
In fact, operators have already begun integrating blockchain for roaming service settlement and reported significant improvements in the time it takes to settle accounts at month-end, greater confidence in the accuracy of accounts, and, consequently, fewer disputes. The next stage is to extend blockchain to the universal clearing and settlement of multiple technologies – from LTE and 5G to Wi-Fi and multiple IoT connectivity options – among multiple partners both in and outside of the operator space.
Creating quick and versatile 5G ecosystems
The advantages to having a 5G ecosystem of many players include enabling scale, encouraging innovation and supporting specialization. Mobile operators, however, are generally bound to their home country, and even the bigger players in a domestic market don’t have the capacity to create and then manage ecosystems on a global scale.
But, when asked about the challenges of developing and running ecosystems, respondents in the Heavy Reading operator survey identified coordinating multiple partners as a primary challenge (74 percent).
One answer to this challenge lies in the use of an online marketplace environment, where providers of devices, subsystems and component services can all offer their products to third parties seeking to create 5G offerings for businesses.
A marketplace approach lets developers and service providers reach customers at lower cost and with shorter lead time. It offers operators and third-party partners an easy and flexible way to create 5G services for business customers. They can pick and choose the components and functionality that they need to create a service or solution from specialist suppliers.
For operators, in particular, an online marketplace platform offers these capabilities:
- Sourcing of service components from the marketplace – An operator, for example, that wants to expand in the oil and gas sector could source specialist, preapproved sensor devices, or an operator seeking to scale up an IoT service internationally could source an industrial device with embedded roaming connectivity.
- Offering of connectivity services to other providers – A vending machine company, smart meter company or automotive company, for example, could purchase national 5G connectivity for their devices to include in the sale to a customer.
In these ways, online marketplaces offer a powerful option to open up the addressable business market for operators. They can also radically lower the costs of creating industry-specific and customer-specific 5G business services.
New era of 5G services
As mobile traffic continues to explode and new technologies like the IoT drive massive numbers of devices online, 5G will play an essential role in our future, where all facets of the world will be integrated with and powered by mobile. To realize this future, our findings show that operators will need to cultivate new 5G business services with customers, third-party service providers, application developers and device partners across a range of industries, if they are to properly monetize 5G and maximize their return on investment in it.
As Group Vice President of Corporate Development and Strategy, Michael O’Brien is responsible for driving Syniverse’s global strategic planning, developing new avenues for revenue growth, ensuring synergy across different business organizations, and identifying and managing partnerships. Previously, Mike served as Senior Vice President and General Manager of Risk Management and led Syniverse’s global fraud prevention and revenue assurance services, helping service providers control risks related to fraud and security, accurately capture revenues, and prevent revenue leaks. Prior to that, he served as Senior Vice President of Business Development and oversaw Syniverse’s acquisitions, new customer relationships and industry relationships. Earlier, Mike was Vice President of Marketing and responsible for management of all products and services globally, and, before that, served in a number of other senior-level positions in the company, including Marketing Director for North American Wireless Services, Product Manager for Network Monitoring and Loyalty Products, Customer Service Manager, and Manager of Network Operations. He holds a bachelor’s degree in computer science from the University of Virginia.