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As 5G growth accelerates, CSPs have new opportunities for network differentiation and service growth


7 July, 2021 | Paul Lambert


As 5G growth accelerates, CSPs have new opportunities for network differentiation and service growth

5G service providers lay the foundation for mass-market service adoption in 2021, and network-differentiation

Despite the COVID-induced interruptions in the first half of 2020, 5G preparations and deployment continued in earnest in the second half of 2020 and now the market – vendors, CSPS, OEMs – are ready to bring 5G to the masses of users. The arrival of Apple’s first 5G devices in 4Q20 marked the tipping point of global consumer readiness, now extending from early-adopters. After the initial phase of network launches that saw coverage built-out in major urban centres, 5G service providers should now focus on expanding coverage to as many areas of high-data demand as possible. At the same time, as CSPs gauge their 5G roll-out strategies, they shouldn’t ignore rural areas with limited-to-no high-speed broadband coverage. In many markets, particularly developing ones, CSPs should carefully assess network-sharing as a way to cost-effectively tap pent-up demand, especially given the accelerating remote working trend. 

Globally, 5G will reach 633.5m subscriptions in 2021, and the vast majority of 5G connections will be for consumer eMBB (Smartphone) and FWA (Fixed wireless Broadband). 5G’s distribution across the globe will be more balanced as the US and Europe will leverage the introduction of Apple's 5G devices. With markets approaching critical mass, the deployment of dense and wide-ranging 5G networks will also facilitate the commercial adoption of 5G in B2B and B2B2x markets. These have been limited to testbeds, small-and-large scale trials, and some widely showcase-style deployments. Meanwhile, 5GSA deployments and 5G-driven Edge deployments and partnerships started in 2020, but the bulk of the market will be ignited in 2021. With that, network slicing will break out of the trial-stage and start gearing up to commercial reality towards the end of 2021.   

Figure 1: Global and Regional 5G connection forecast 2019–26

Source: Omdia 

To help monetize their 5G investments, Omdia argues that:

  • CSPS should monetize the first wave of large scale 5G consumer adoption by creating a compelling upselling strategy. This will comprise of a mix of re-tariffing 4G, data bundles (often unlimited), content and digital service subscription add-ons and bundles, and multi-device (e.g., smartwatches) without forgetting that if they intend to offer 5G, the network needs to offer a materially different experience when compared to 4G. Overall, the monetization strategy of 5G in 2021 is very similar to the one of any new “G”, but there are a couple of extra helps for CSPs: these are cloud-gaming and AR applications.
  • CSPs should start preparing for 5GSA to satisfy the upcoming demand of specialized networks and services: industries, enterprises and government are warming up to the idea of having dedicated programmable networks. With some of these translating in commercial opportunities, CSPs should spend 2021 in preparation of the network of the future, which of course includes 5GSA-based capabilities such as slicing and will extend the cloud – with the nearest could (Edge) being the closest to CSP’s commercial reach.
  • CSPs should offer a service-oriented platform: CSPs should invest in their capabilities to manage partners to offer an end-to-end service to their customers. 

5G-hungry applications such as cloud gaming and AR will help CSPs in demonstrating the real value of 5G, but these are normally used by a segment of the customer base. CSPs will have to find the right balance of tariffing, data bundling, service bundling, speed, latency, devices range, network coverage and capacity. For most of 2021 winning the 5G game will be about fine-tuning customer segmentation and finding partners that can add value and differentiation to the 5G proposition.  

With 5G more than previous technology generations, service providers should see their network investments as an opportunity to differentiate in the market and lead it in the areas they want to compete in, whether that’s in the consumer, enterprise or industrial market. 5G operators will compete even more aggressively on network quality than they did with 4G, and consumers will pay attention. Similarly, success in emerging enterprise and industrial 5G markets will depend on how effectively a CSP’s 5G network can meet evolving customer needs.

Author:

Paul Lambert, Principal Analyst

Paul Lambert works in Omdia's Europe team, focusing on the telecoms industry. He specializes in operator strategies, new technologies, and mobile broadband best practices. Paul also specializes in the implications resulting from eSIM and the evolving capabilities of mobile broadband. Read bio

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