Time for telcos to step up on 5G app collaboration opportunities for consumers

Summary

The path to offering 5G rich apps for consumers is complex, especially in terms of both investment versus straight collaboration (with less risk). Even the telco behemoths are trying to get this right. But Omdia has identified six ways operators can participate in 5G rich apps development. One refreshing initiative sees telcos partnering with other telcos to lower barriers to entry to XR content via the Global XR Content Telco Alliance. 

How and why to invest and partner on 5G rich content

The Global Telco XR Content Alliance, which includes KDDI, China Telecom, and LG Uplus, is a moderate-risk opportunity, since some investment is required and achieving profitability is challenging. Tier 1 telcos slow out the gate on XR content development would be advised to join the alliance to milk best practice, industry expertise, and the financial fire power of such groups. The telco’s 5G app ambitions could leapfrog those of their local peers, but watch out for other alliances that will spring up to contest this one. 

In contrast, the lowest-risk play is simply to buy content from those with content expertise. Today that includes buying 5G rich apps (that are relevant to the buyer’s local market) from other telcos or content aggregators, for example. 

Last is the high-risk category requiring the most resource, such as investing in 5G startups either directly or through a venture funds group.

Why bundle 5G rich content? First, bundles help differentiate 5G from 4G. Second, bundles give consumers a reason to pay a moderate premium for 5G. Third, bundles differentiate one operator’s 5G offering from another in a business where differentiation perse is hard to do.

Localization is key to success

Omdia’s investment categories are not mutually exclusive. A telco can embark on multiple strategies. One thing is clear, however; telco giants will invest in and collaborate on 5G rich apps to out-differentiate their peers. Other telcos will collaborate only because of lack of scale and resources. 

While it is nice to see investment and collaboration options available for telcos, the golden rule of content needs to be embellished: localization is key. What works in Korea does not always work in other markets, and so on. Therefore, while collaboration efforts are to be encouraged, local market realities need to be acknowledged (Korean and Japanese markets have more affinity to consumers paying for premium content—music, drama, and gaming—through their telco than other markets), or the best intentions will not succeed.

Discover the six ways that operators can participate in 5G rich apps development, including working alongside telco peers to develop original XR content, in the full 5G Consumer Broadband Pricing Report – 1Q21. This report is an example of one of the many surveys, market forecasts, reports, and market data insights that make up the Broadband, Bundling & Pricing Intelligence Service from Omdia. This service provides access to global and in-depth coverage across tariff innovation, bundling, and broadband monetization. Click here to download the overview now.