Home5GWhy 5G doesn’t amount to a hill of beans, and it is not enough for operators

Why 5G doesn’t amount to a hill of beans, and it is not enough for operators

Telecoms operators must do more than just sell connectivity. It is a maxim that gets repeated, often, and always – and one that, in the end, becomes more like a stick to beat them with than a code of survival, as they fail over and again to lead with digital innovation.

There is an argument that 5G will not actually amount to a hill of beans, at least not for those counting beans – that, like every generation of wireless tech before, it is just another layer of plumbing, to carry the data, to spark the innovation. The utility network is not so important to innovation higher up the stack, the argument goes.

And the argument is right, of course. But it does not to say the new plumbing is not super slick and bendy (and important), in a way that lets the the cabinet maker and the shower company run riot. It just says the real invention – and the real business – is in the fixtures and fittings, and not in the pipework.

Even if the plumbing, itself, is most pricey aspect of the whole industrial face-lift. The counter argument goes that 5G will afford network operators ways to differentiate their services, with wide-area sensing and wide-band slicing, and to offer different strokes for different folks. New tiers of service beget new streams of revenue, and ways to innovate around an offer.

Another line in this other narrative is that 5G will, in some future incarnation, bring real-time operational control, whether to offices, factories, campuses, stadiums, stations, or cities. Much more than just bandwidth, for chucking ever-more data over wireless networks, it is control, derived from ultra reliability and ultra-low latency, that makes 5G unique, and unlike previous generations of mobile tech.

These arguments are also true. They offer the old operator community great hope. They are the (only) reasons, perhaps, that 5G will justify the hype, in the end. These aspects of it, which draw in many new customer segments, are genuinely exciting for the telecoms industry, and potentially transformative to many enterprise sectors.

But these exciting facets are not enough. They do not guarantee a brighter future for telecoms operators, or a future at all even. They do not offer a way, on their own, for operators to reinvent themselves. Because connectivity – however it is segmented, multiplied, and sold – is still just connectivity. Because 5G – even as it starts to run fast and slow, hot and cold – is just another utility service.

Because 5G is the power in line and the ghost in the system; the change – whether incidental or societal, this time – will be invented on top of it.

These facets are not enough for the operator set, as well, because even industrial control – the most striking function of 5G – holds relatively niche-appeal. Yes, factories and fortunes will be made and remade (each), and the supply chain will be able to flex in whip-like response to singular demand.

Production might even return home, to Europe and America, as order fulfilment and carbon preferences dictate. Here, in this vaulted realm of Industry 4.0, revenue opportunities are significant for operators. But they must also share them with thousands of others, as spectrum liberalisation and network virtualization make (private) operators of us all.

Which is why, ultimately, operators still have to go beyond connectivity, to develop and acquire complementary services to transform industry and drive innovation.  

This article is, in ways, an extended intro to another piece, considering how French operator Orange is tackling the challenge of digital transformation. This article can be found here.

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