‘Cracking the 5G monetization puzzle’ – column

By Quah Mei Lee, Frost & Sullivan Industry Principal – Telecoms & Payments Strategy

Facing slow or stagnant growth, 5G is an opportunity for mobile network operators in Asia-Pacific to seek out new revenue streams, particularly in the more lucrative and profitable enterprise segment.

However, mobile service providers all across Asia-Pacific are still trying to understand how to monetize 5G.

It does not help that mobile network operators have been plagued by legacy practices that encourage short term and narrow focus, unrealistic projections, silo approach to partnerships and solutions and technology strategy planning that is never really optimal.

It also does not help that 5G is coming up when customer experience is becoming a key performance metric and a top challenge.

In a way, 5G might be just what mobile network operators need to address customer experience woes. Choosing to embark on the journey towards 5G will bring about new ways of thinking and working to come up with end to end services through partnerships that focus on the same end customer.

The prize is the ability to regain competitiveness against fibre players
and to get back on a growth trajectory. There are 3 things to note if you are seeking to crack the monetization puzzle:

Firstly, if you don’t really understand customer needs, monetization in the 5G era is only going to get harder. There is a lot of data out there that is only now starting to get processed.

Bit by bit, we are starting to really and truly understand customers. Instead of building solutions so that they will come to you, you need to go out and walk with them. The mobile services business is no longer just about enabling communications between people. It is now about enabling industry growth through solutions built through partnerships to meet the needs of the jointly targeted customer.

Secondly, if you can’t do scale, you can’t do 5G. 5G requires leveraging on scale. Unless you are after the wholesale market for 5G, unique niches and leveraging on government support to drive initial volume might be the way to fund initial investments in 5G.

Existing partnerships can be leveraged holistically to expedite innovations to market. You will need to revisit long standing partner relationships as well as business models, and co-create more then you have ever been doing. Capitalize on the edge that 5G will provide.

Monetize and grow your customer base through new 5G services e.g. AI processing, and help verticals to digitalize faster to meet their needs e.g. B2B needs analytics, and solve pain points e.g. revenue leakage.
Thirdly, the enterprise segment will become important for 5G monetization. Not having a strong enterprise segment service offering is never a good idea. You will need to relook your enterprise segment strategy taking into account that the current technology ecosystem is not geared for the next set of enterprise service offerings.

You will need to foster an open dialogue to create a platform to support all current ecosystem players e.g. OEMs, vendors and managed
service providers, and future ecosystem players. Digital services, software defined virtualized infrastructure and security will become the 3 key pillars for 5G. You will need to evolve your technology strategy roadmap around these pillars.

Overall, 5G will play a key role in modernizing and transforming digital businesses in a digital environment. Understanding local demand and needs as well as industry collaboration are key to 5G monetization. Trials by mobile service providers together with equipment suppliers are
leading to addressing this and increasingly helping with business models formulation.
Successful end to end solutions require synergistic partnerships and co-creation. For this to happen, the necessary partnerships need to be forged and workable business models and end to end solutions need to crystalize. Also, as with other disruptions, regulations too need to catch up with new 5G use cases.

Regulators need to understand and be open to new rules for the Intelligent Digital age. For mobile service providers to tap on the opportunities, a lot of effort to plan needs to go in and from now. Will you take up the challenge?

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