Telcos are looking towards the enterprise market to make the business case for 5G. But for most industries, 5G is just one of many technologies needed to drive efficiency and innovation. Which verticals' needs best match telcos' capabilities?

Introduction

This report outlines key challenges within selected industry verticals, and how telcos can help resolve them with three emerging networking technologies – 5G, IoT and edge computing.

This research builds on many previous reports:

• 5G: Just another ‘G’ – yet a catalyst of change
• Elisa’s Smart Factory: How to win over industry leaders in just two years
• Telcos in health
  • Part 1: Where is the opportunity?
  • Part 2: How to crack the healthcare opportunity (9 telco case studies)
• Autonomous cars: Where’s the money for telcos?
• Three new telco business models: Soft-net, Cloudnet, Compute-net
• Our consulting team’s deep experience in edge computing

Enterprise services evolve alongside communications and information technologies

The early days of 2G/3G

• Basic M2M connectivity
• Early versions of private networks, bypassing the internet for sensitive data transfer

Improving mobility and capacity with 4G and fibre

• Better connectivity drives demand for video-conferencing and more sophisticated UCaaS
• Mobile and fixed data connectivity is powerful enough to enable greater enterprise mobility and support the shift towards cloud-based services
• Different verticals increasingly require bespoke solutions for unique needs – which are easier to deliver through the cloud

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Greater flexibility and frictionless experiences with 5G, IoT and edge computing

• Increasing complexity of connectivity, IoT, cloud and IT ecosystems are driving demand for flexible yet seamless solutions:
  • Mobile connectivity across geographies without onerous roaming charges
  • Seamless mobile connectivity across multiple networks and technologies, especially in remote areas
  • Frictionless remote set-up of IoT devices shipped directly from manufacturer to live environment
  • Ability to migrate to new technologies seamlessly (e.g. public sector move from TETRA to cellular)
  • All of the above controlled and monitored on user-friendly, cloud-based dashboards
• The shift from product to service-based business models means a growing number of enterprises want to embed connectivity into their offer to customers
  • i.e. demand for greater control over wholesale connectivity solutions
  • remote maintenance, asset-tracking, etc.

5G applications will arrive at different times…

Source: STL Partners

…in the meantime, other technologies can help address enterprise needs

Source: STL Partners

The problem with 5G for enterprises

• Most enterprises are not looking at 5G in isolation, but as one of many technologies that will help resolve pain points around efficiency and innovation. The Internet for Things (I4T) and edge computing are two other key technologies that many enterprises need, and which telcos could potentially provide
• In the long term, STL Partners does not expect 5G connectivity on its own to deliver growth for telcos. So to grow enterprise revenues, telcos should also develop I4T and edge computing solutions
• But developing expertise in 5G, I4T and edge computing will be expensive and complex to manage
• Therefore, telcos should start by targeting their investments to meet specific enterprise pain points

This report helps telcos assess how to target their investments by highlighting key pain points in a selection of industry verticals, and how relevant 5G, I4T and edge computing are for solving them.

Sectors with strong demand for all three technologies hold the highest potential value, but this will be difficult for telcos to capture owing to strong competition in I4T and edge computing from other technology companies.

This report covers a selection of verticals that STL Partners has developed knowledge of through research and consulting activities: manufacturing, construction, utilities, agriculture, transport, automotive, healthcare, and sports, media and entertainment. 

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