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3 reasons why CSPs and IoT will be the real winners of 5G

Bernd Gross
(Image credit: Bernd Gross)

 Communication has never been more important than during the pandemic. Whether you’re using a mobile device to stay connected to friends and family, a laptop to jump into your next Zoom meeting, or a television to see the latest news - without knowing, most of the world relies on Communication Service Providers (CSP) to provide them with reliable connections. But, with the rise in use, comes the rise in competition and the loss of revenues from the rise of campus networks and network slicing - two things CSPs have been fighting for some time. 

CSPs have been in the process of a digital transformation for the last few years, with the end goal to improve efficiencies and enhance the customer experience.

"CSPs are now on a mission to transform themselves from product-selling providers to services and solutions providers."

Bernd Gross, Software AG.

As CSPs continue with their core business model to sell phone devices with 5G, they are now on a mission to transform themselves from product-selling providers to services and solutions providers. As 5G rollouts continue to gain momentum and the Internet of Things solutions continue to accelerate, we will see CSPs move closer to being solutions-focused.

Below are the reasons why I believe CSPs and the Internet of Things will be the real winners of the implementation of 5G. 

1. CSPs will rely on 5G to offer unique opportunities

Prior to the pandemic and lockdowns, across the globe, people were preparing for the implementation and execution of 5G. Many believed 2020 was going to be the year 5G did - or did not - live up to the built-up hype it had continuously received. 

As stay at home orders in most of the world ease, 5G’s implementation is continuing at a steady pace, with many providers again jostling for a position amidst the rollouts.  

"Once telecom operators like Verizon and AT&T own their spectrums, they can build out their own 5G networks, opening opportunities for new revenue streams."

Bernd Gross, Software AG.

Once telecom operators like Verizon and AT&T own their spectrums, they can build out their own 5G networks, opening opportunities for new revenue streams from new business models and ecosystems on top of everything 5G offers. This will enable CSPs to offer private networks to the industry to replace fixed infrastructures with easier to use and cheaper wireless connections. This is a brand new area for CSPs and a strong differentiator against competition. 

2. IoT drives CSP demands 

IoT solutions have never been more in-demand than during the pandemic, with many enterprises turning to the emerging technology to enable smart social distancing practices and other ‘tech for good’ initiatives. 

As expectations in the execution of IoT solutions continue to increase, CSPs will need to have end-to-end vertical solutions available. To do this, it takes an ecosystem of partners and is not always something telcos want to take on. CSPs will instead look for aid in building solutions that will combine devices, platforms, connectivity, applications, and analysis.

 3. Understanding the future of CSPs  

As telco vendors and CSPs dive deeper into IoT-led vertical solutions across businesses, they will require a flexible environment where they can share knowledge and experience. The most efficient way to do this is by putting APIs into a single, branded environment where customers can easily find them. 

So far, we have already seen two areas of growth in end-to-end solution developments:

  • Massive IoT solutions: Low-cost devices, sensors, and actuators that consume very low amounts of energy to sustain long battery life. A prime example of this is the IoT-powered devices worn by players in the NFL that sense what players spent the most time near them on the playing field in case someone contracts COVID-19.
  • Critical IoT solutions: Applications requiring very high reliability and availability and very low latency as well as wireless connectivity for industrial processes. An example of this would be using IoT for traffic safety.

If all goes well, CSPs globally will have the opportunity to gather and participate in new ecosystems for IoT success. Otherwise, the sensor environment could become unmanageable, with up to 29 billion connected devices expected by 2022. 

"In 2021, it will be up to the CSPs to completely implement 5G in order to make much of this a reality."

Bernd Gross, Software AG.

There was tremendous time pressure on CSPs and telcos from their customers prior to the pandemic to fulfil. CSPs are continuing to find ways to differentiate themselves in order to gain new resources and revenue streams. In 2021, it will be up to the CSPs to completely implement 5G in order to make much of this a reality. 

With all that being said, no one could have predicted the impact the pandemic had on the acceleration of the use of IoT. Is 5G the next emerging technology to go down a similar path? We will see. 

Bernd is CTO for Software AG. He was previously responsible for the IoT Business at Nokia Siemens Networks and CEO of Cumulocity. Bernd is a globally oriented executive with more than 20 years of work experience in Germany, Finland, UK, Asia and US (Silicon Valley). Bernd holds a master degree in Information & Communication Technology and an

MBA from the London Business School, UK.