It’s hard to believe it’s been almost three weeks since Mobile World Congress Barcelona (MWC Barcelona). This amazing action-packed week has a momentum all its own that shapes the rest of the year for mobile.
Syniverse had a great show – including the release of major study on 5G – and, as usual, the energy and innovation have left me more energized and optimistic than ever about the opportunities that face our industry. But more than any of the technologies I experienced there this year, one captured my interest.
This year, 5G was far and away one of the hottest topics at the show, but as I waited for my flight from Barcelona to board, I was dismayed to read several articles and their takeaways on 5G. Specifically, too many commentaries continue to focus on the consumer drivers for 5G deployment. They pose the question: Are consumers willing to pay for the speeds, consumer devices, and services of 5G?
It’s easy for us as consumers to get excited by faster speeds, driverless cars, video everywhere. I admit I paused at the Samsung booth to get a glimpse of the new foldable phone, and the autonomous BMW I checked out also stoked my imagination. So, I can understand why there is the urge to ask this question of the consumers’ willingness to pay, but it’s the wrong question.
More importantly, the question should be this: Are businesses willing to pay for 5G?
As an example, when I purchased my last mobile phone (a Samsung Galaxy Note), I based my decision on utility and the “cool” factor. But admittedly, my criteria were subjective, and my decision was ultimately aspirational. Businesses, on the other hand, base their technology purchasing decisions on objective criteria. Even with “bleeding edge” technologies, with fantastical use cases, the decision to spend money on these is driven by the business case.
This can be broken down to four questions:
- Can I reduce my operating cost?
- Can I drive new revenue?
- Can I improve my customer experience, engagement and retention?
- Can I improve the security of my assets, and thereby reduce risk?
These questions can all be answered using quantifiable data gained from documented experience and analysis. Any successful use case must address one or more of these questions, and the bigger the impact, the more likely business adoption will be. Let’s look at a couple of examples.
Drone Management for Insurance
Insurance companies increasingly use drones to assist in property casualty adjustment as a means of improving estimate response time, increasing adjuster efficiency, and increasing customer satisfaction. As 5G is deployed, the use of automated drones in insurance will become more practical, allowing for an adjuster to assess many more properties, lower operations costs, and respond to customer needs more rapidly. The insurance company will pay for an ultra-reliable, low-latency network slice access for these drones, but the new service expense will be offset by much higher gains from operational efficiency and customer retention.
Priority Content Delivery for Media
Media companies seek ways to deliver content to their users under the highest standards of quality, latency, and packet loss. By working with mobile network operators, these media companies can secure a mobile broadband network slice to deliver against those standards, wherever their users may be. By improving the quality of delivery, the media company can improve the customer experience, and can potentially extract incremental revenue either through improved experience or customer retention. While the consumer is ultimately paying for this use case, the business model establishes the media company as the customer of the operator, creating a commercial model that did not exist before.
These examples both point to the new markets available through the delivery of use cases providing demonstrable value to businesses. Consumers will still drive most traffic and revenue for the mobile industry in a 5G world. There will be new use cases that can potentially increase consumer spending. But the operator’s business case for 5G will be made on the margins of new business opportunities. The potential for these new opportunities is limited only by our ability to ideate new services that can move the needle for business customer profitability.
Syniverse is right in the middle of driving these new use cases, and we demonstrated it with several announcements at MWC. Among our highlights was a major study on 5G in which we examined how mobile operators will use 5G to provide new services for enterprises. We also announced a new 5G signaling service, a new fully managed, end-to-end #IPX network interconnection partnership with Tata Communications, a new private LTE solution with Ruckus Networks and Federated Wireless, a new solution for cloud-based artificial intelligence and robotic services with CloudMinds Technology, and a new roaming hub with full 5G operability.
But we’re just getting started and have a lot more in store for 2019. I urge you to stay tuned for more on that here on Synergy, and I invite you to leave me a comment below on any thoughts you have on what’s ahead for 5G this year.
John Merchant is Senior Director of Portfolio Market Development at Syniverse.