Communication Service Providers (CSPs) see the huge opportunity 5G offers, but they’re finding it difficult to harness because it doesn’t necessarily fit into the traditional way of thinking. Prices for premium phone plans aren’t increasing significantly because up to this point consumers haven’t been willing to pay much more for 5G than they’re already paying for 4G LTE services. We’re working with CSPs to think outside the box of traditional cellular phone services to effectively monetize this new opportunity.
US carriers and a few others around the globe have had limited success offering 5G access for an additional fee when paired with a 5G-compatible phone purchase. However, many CSPs are eyeing new revenue-generating opportunities through private 5G networks and transformative applications for the Internet of Things (IoT). By utilizing cloud-native software and edge compute capabilities, CSPs can bring new and innovative private 5G networks into enterprises, stadiums, warehouses, and manufacturing facilities among others. They can also offer new forms of residential and business services with fixed wireless access. 5G opens the door to expansion with more bandwidth, faster speeds, and improved reliability.
Additionally, there’s an increased opportunity to support sustainability efforts and bring greater connectivity to rural or less connected areas, but this requires rethinking what a wireless network can do beyond providing simple voice and data. 5G may well be the most economical way to solve the digital divide for the world’s rural and underserved communities. It also plays well with the environmental goals of large companies, including ours. For example, new services like this allow for real-time water usage monitoring, “smart” thermostats and electronics, and self-driving electric cars, all of which lead to an overall reduction in Greenhouse Gas (GHG) emissions.
What we’re hearing from our customers
From an application standpoint, we focus every day on helping carriers provide a better end-user experience. We aren’t just thinking about our business – we’re always thinking about the CSP’s business and how to make it better, and what our products and solutions can give them that they can’t get anywhere else.
In meetings with customers and sales teams, what I’m constantly hearing as the top of mind for telco mobile is how to best monetize fiber networks for large service providers. They want to know how Routed Optical Networking, 400G, Secure Access Service Edge (SASE), and 5G can improve their production networks that supply services directly to the consumer such as internet, video, and cellular. While historically, direct-to-consumer sales account for 60-70 percent of overall revenue for CSPs, 5G changes the dynamics and we’re now looking at something closer to a 50/50 split between enterprise business and consumer services.
But 5G will only be as good as the network infrastructure it’s built on. It takes a scalable and sophisticated network to make it more than just a bigger access pipe.
Specialized services lead to new revenue streams
The most obvious way CSPs can immediately monetize 5G is to introduce new value-added services. For example, some are finding ways to use and manage IoT devices through their networks. Having customers rely on these networks to operate and manage their IoT devices represents an exciting possibility to generate new revenue streams.
Opportunities exist for enterprises to digitize and automate many aspects of their operations that are currently analog. 5G offers a window to usher in this digital transformation, enabling new IoT applications with Machine-to-Machine (M2M) communication that can revolutionize industry and enterprise operations, increasing efficiency and productivity. Technology like 5G facilitates robust M2M and IoT communications, and this provides a real, future-ready revenue opportunity for CSPs.
Another way to add value to 5G services is to distribute edge computing to sites such as cellular base stations and large venues to locally manage surges in network demand, especially for surges that come from game day, concerts, and other big events. With edge compute and 5G, new Augmented/Virtual Realities (AR/VR) can be harnessed for potentially lucrative and imaginative use cases. Just imagine how fans could use AR/VR to experience the big game in a whole new way!
Fixed wireless access not only reduces cost by requiring less digging to lay lines while double dipping into multiple markets such as residential and business, but it also presents new opportunities for 5G monetization. For example, Verizon’s 5G network uses locally deployed equipment to provide fast and reliable home internet service with speeds up to 20 times faster than fixed broadband networks.
Connecting the digital divide
As more devices are connected, more meetings go virtual, and more services are conducted online, this digital divide keeps growing between those with full internet access, those with limited access, and those who simply can’t access it at all. This divide needs to close if we hope to offer an inclusive future for all.
There are billions of people who remain unconnected to the internet (Cisco Annual Internet Report 2020), and billions more who are underserved with inadequate bandwidth or inconsistent connectivity. Geographic obstacles, lack of existing infrastructure, inadequate electricity, high cost, and geo-political unrest are but a few reasons. In the end it comes down to economics. We need to find ways to make rural deployments and servicing lower income areas more profitable for CSPs if we hope to bridge the digital divide.
Alongside federal and local governments, we’re working on solutions that make serving the underserved easier and economically viable for CSPs. We seek new ways to help CSPs grow revenue, add valuable services, and lower costs through solutions like Routed Optical Networking that collapse the network into single control points for managed services. When you do that, 5G becomes a very real opportunity for growth.
The exciting possibilities that 5G brings will lead to one of our primary goals as a global organization, which is to develop the Internet for the Future that leads to an inclusive future for all. This doesn’t just mean giving gamers and video streamers more bandwidth and lower latency. This means connecting the unconnected around the world so that everyone enjoys a level playing field and has the same access to opportunities.
Our open, cloud-native 5G architecture is helping pave the way for a more inclusive future, and we encourage you to participate by thinking outside the box to develop strategies that make the most of this enticing new technology.