From an evolutionary perspective, 5G is now a reality with live deployments and active use cases in multiple countries. Functionally, 5G is 100 times faster and has 1000 times more capacity, fundamentally changing technology access globally. This allows mobile network providers to offer high-powered and reliable services with lower latency, reduced energy usage, and massive connectivity for devices.
According to PWC, in the next four years, telecom players will invest massively — up to US $57 billion — to set up a higher network density and to upgrade active equipment. During this period, operators will try to reduce and phase out the 4G rollout experience. When 4G was launched in 2012, it catalyzed a revolution in the adoption of data services; however, operators struggled to generate additional revenues from end-users to cover the investments.
Potential 5G Monetizing Use Cases
The advent of 5G has paved the way for several potential monetization strategies. This is in part due to the performance of 5 G’s design in areas such as ultra-low latency and considerable bandwidth. This requires 5G monetization systems to be flexible, open, and agile for any use case. With 5G services that are ultra-low in latency with higher bandwidth, monetizing these services is still complex and traditional methods will not fit easily. Based on the above, 5G-based service delivery requires a complex yet convenient partner ecosystem for telcos to create desired offerings for enterprises (B2B) and subscribers (B2C).
Why Focus on B2B2X? – Emerging Collaboration Strategies for 5G Monetization
Under the B2B2X scenario, which encompasses B2B2B and B2B2C, operators collaborate and share the rewards with B2B partners.
Historically speaking, the telecommunication industry has been consumer-driven. Most outreach to the customer has been done by third-party value-added resellers and authorized service providers and partners (new connections, handset sales, SIM card sellers, etc.).
By selling 5G services to other businesses, they will then sell 5G as part of their offering to customers. B2B2X (business-to-business-to-third party) amplifies the already set in place systems of B2B and B2C models and utilizes partner ecosystems.
The 5G ecosystem allows network technology with a far greater range of functionality that can be readily monetized. Telcos are able to have many more opportunities to strategize and develop collaborations with a variety of businesses and public agencies.
Solution enabler — third party led B2B2X – In this scenario, the partner or reseller buys a slice of the telco’s 5G network capacity for its use. The interface between them is managed and enabled through application programming interfaces. Further, the partner sells the bundled offering to its customers by receiving revenue through direct payment or an agreed monetization model, all while paying the telecom company through a network charge or revenue share.
Solution creator — operator led B2B2X – Telecom companies should look at this strategy to generate vertically integrated solutions that allow them to bundle third-party offerings, such as AR/VR services and equipment, with access to their 5G networks. This business model allows a telecom company to offer their customers a data plan that is bundled with VR gaming and a variety of other services that require 5G capabilities.
While the technological advancements offered by 5G services are astounding, efforts to monetize this revolution have had some challenges. With 5G, consumer awareness of its promise is low and most of the most prominent players have yet to introduce the upgraded service just yet — all of which may result in a slower uptake.
A comprehensive business support system and framework are required to bring partners together, bundle services, set up offerings, deliver services to the target audience, and apply a revenue share across the partner ecosystem.
From the opportunity and growth perspective, 5G will play a significant role in strategic planning for telcos. Bringing partners together and setting up the partner ecosystem requires a strategic framework. But, from the opportunity and revenue growth perspectives, 5G will play a significant role in strategic planning for Telcos.
While 5G provides business opportunities, it also presents challenges:
- Time to the market – continuous optimization of business with new packages
- A seamless partner onboarding process
- Setting up a marketplace ecosystem
- Complex partner engagement
- Partner revenue settlements
Evergent delivers customer relationship and partner management tools for global digital media, entertainment, and telecommunications providers. With customers in 175 countries ranging from small businesses to Fortune 500 companies, Evergent creates flexible, user-friendly solutions that enable each customer to streamline their CRM processes and maximize monetization efforts.