Justifying the cost of 5G

5G presents opportunity for Mobile Network Operators (MNOs) against the backdrop of huge investment risk. Strategic decisions around Location will make or break that investment.

Thu May 30 11:19:00 EDT 2019

The hype surrounding 5G continues to rise to fever pitch fueled by increasing media coverage and consumer intrigue. Expectations within the private and public sector are high, regardless of some of the current roll-out gaps and political bumps in the road. The point is 5G is here and momentum will build this year. The question is – will MNOs be able to afford it?

Of course, 5G is a long play and we are at the infancy of roll-out (although some countries are ahead of others). At the Mobile World Congress in Barcelona this year, Deloitte and others commented on the need for MNOs to continue the focus on technology investments, but also devise business models for monetizing 5G. This isn’t ground breaking news, but MNOs are looking for ways to justify the investment in small cell networks to make 5G ubiquitous and viable. A prominent example of this is Verizon recently offering a $1m prize to the entrepreneur who can ‘justify the cost of 5G’. The contest is a relatively small PR play, but it symbolizes a larger issue: The likes of AT&T, T-Mobile and Verizon in the US, and operators such as O2 and Vodafone in Europe, need to find new incremental revenue sources to fully justify the high cost of 5G deployment.

In many respects, this is very exciting. There is a new hunger for innovation in the telco space and ideas and opportunities will continue to abound. Think of some of the biggest tech buzz-words…smart cities, autonomous cars, AR, next to turbo charged streaming…5G promises to fuel these from concept to reality. As you may expect, much of the appetite is also driven by government.

The broad economic growth predictions associated with 5G and some of the initial use cases will drive ongoing support from the public sector. Addressing these challenges will demand private sector and government collaboration through partnerships which help reduce the time for small cell deployment and the creation of new use cases. This also presents opportunities for those technology organizations with expertise in building relationships with both the private and public sector.

Location Intelligent 5G

When you consider the cost involved around 5G deployment, there are clearly some strategic competencies that will be inherent in avoiding unnecessary expenditure and driving revenue opportunities. The most prominent being Location Intelligence. When we’re talking billions of dollars of investment, even a small error racks up a pretty disturbing bill. Even if .5% small cell placement is located poorly – and I that’s an artificially low number – it could mean that a $10B investment results in $50M of waste.

The need to justify 5G remains and the race to the top for MNOs has begun - it’s truly an exciting time as the world of connected devices gets a serious turbo-charge. Expect it to spur innovative solutions in areas such as agriculture, transport, education and healthcare, expect the political jostling to continue, but perhaps most of all, expect the winning Network Mobile Operators to be those who create the optimum Location Intelligence strategy - not just to reduce cost through optimized network planning, but also to drive opportunities through subscriber acquisition and enhanced client experience.

To further understand the value of building competitive advantage through Location Intelligence and 5G, download this 'Location Intelligent 5G' White Paper, or view this recent Webinar.