Enterprises prioritise 5G apps that drive real-world benefits: EY

  • Some 85% of respondents say global health crisis is driving 5G interest
  • Nearly six in 10 to invest in 5G within three years amid implementation stalls

Enterprises prioritise 5G apps that drive real-world benefits: EYThe third edition of the EY Reimagining Industry Futures Study reveals that enterprises are looking to 5G to help alleviate immediate business pressures brought by the Covid-19 pandemic and related global events. 

In a statement, EY said 49% of respondents are prioritising process optimisation as a key application, compared with 28% who favour advanced 5G use cases featuring virtual or augmented reality. 

The findings indicate that enterprises are now focused on bolstering business resilience, meeting corporate priorities and responding to stakeholder demands, it said.

A range of external factors underpin this trend, EY said, adding that 85% of respondents say the impact of the global health crisis is driving their interest in 5G, up from 52% in last year’s study. 

Additionally, 80% say supply chain disruption has galvanised their 5G pursuit, while 71% cite the focus on environmental, social and governance issues, the study indicated. 

However, there is some way to go in realising these ambitions, EY said as 37% are concerned that 5G and internet of things vendors’ current use cases do not meet their business resilience and continuity needs, and 47% do not think their sustainability goals are met by today’s use cases.

Enterprises prioritise 5G apps that drive real-world benefits: EYTom Loozen (pic), EY Global Telecommunications leader said while the hype around how 5G low latency could power the metaverse or commercialise augmented reality continues to intensify, this study indicates that the technology has moved out of its infancy and is now actively being applied to drive real-world benefits. 

“This is to be applauded, with 5G following the same innovation cycle of other transformative technologies.

“Sophisticated use cases will become important in time. More pressing, however, is the need for 5G providers to tune their solutions to the practical demands of industry leaders today,” he said.

Meanwhile, in Southeast Asia, 5G adoption has also met with roadblocks. 

Joongshik Wang (pix, bottom), EY Asean technology, media, entertainment and telecommunications leader highlighted that use cases for 5G in the private sector will need to be more clearly defined before technology operators are confident enough to take 5G applications to market. 

“For now, governments are the main drivers of investments in 5G infrastructure public sector projects. Closer to home in Singapore, the [email protected] project provides a testbed for promising public sector use cases that could be rolled out on Singapore’s mainland,” he said. Enterprises prioritise 5G apps that drive real-world benefits: EY

The study further finds that enterprises are becoming increasingly receptive to 5G solutions delivered through disruptive business models.

Some 77% of enterprise respondents are interested in using private networks to support the implementation of 5G and IoT use cases, and 71% are interested in buying 5G through an intermediary rather than directly from a telco, it reported..

“Private networks are of high quality, secure and seamless. However, private network operators will need to provide a strong cost-benefit case to justify the high investment costs.

“The commercialisation of 5G private networks will also require governments to play an active role in outlining the key considerations and providing a clear regulatory framework on licensing for private networks,” he said.

Meanwhile, the survey noted that telcos face a significant credibility gap with regards to their perception as digital transformation experts, with only 19% of enterprises considering them as such (unchanged from last year’s study findings).

Conversely, 30% trust network equipment vendors as favored digital transformation experts – up from 19% last year, the study highlighted.

Loozen said disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure and more agile go-to-market strategies are essential in a 5G-IoT world. 

“Telcos should take steps now to help ensure that they can meet enterprise demand for private network deployments,” he said.

According to the report, 69% of respondents state that they already collaborate with other organisations as part of a business ecosystem – unchanged from last year’s study.

However, the survey findings indicate that businesses are being bolder in their approach to partnerships, with 36% seeking vertical partnerships with companies in other sectors (up from 24% last year), and 73% are prioritising suppliers that can offer ecosystem relationships as part of their 5G capabilities.

The study also highlights that 5G leads all other emerging technologies tracked in the study in terms of future spending intentions, with 56% of enterprise respondents planning to invest within three years. 

Current and future spending intentions for 5G over this period are highest in Europe (up 5% to 76%), in contrast to last year when Europe lagged other regions, the report indicated.

However, the findings caution that investment should not be taken for granted, with intentions falling by 8% year-on-year to 70% in Asia-Pacific and the Middle East.

This caution is indicative not only of a more defensive approach toward 5G, but of stalling confidence generally, with only 24% of enterprise respondents stating that they are very confident they can successfully implement 5G (down by 1% year-on-year), it said. 

This is compounded by enterprises’ poor understanding of 5G’s relationship to other emerging technologies, now cited as the biggest internal challenge to 5G perception – up from fifth position in last year’s ranking, EY noted.

Adrian Baschnonga, EY Global Telecommunications lead analyst, said there are still fundamental anxieties around how 5G works alongside other emerging technologies. 

“5G providers should take this on board and adapt their customer discussions accordingly. By educating enterprises on how 5G can be harnessed by other emerging technologies, service providers can boost enterprise confidence in their 5G deployments,” he said.

 

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