Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Eduardo Argüeso, EMEA Telco and Media Industry Lead, IBM, looks at the new enterprise markets 5G has opened up.

The arrival of 4G was supposed to give mobile sector revenues a major boost. Innovative services enabled by higher bandwidth were expected to open up a range of new business opportunities for Communications Service Providers (CSPs).

However, flat rate plans and the emergence of Over-The-Top (OTT) players offering competitive messaging, voice and video platforms ensured revenue remained flat. Meanwhile, keeping pace with growing bandwidth and heightened customer expectations sent costs through the roof.

As we move into the fifth generation of mobile, it is essential CSPs own the associated Value-Added-Services (VAS) to get the right return on their investment in 5G spectrum and architecture. But there is a critical change they need to make in order to do so.

The provision of next generation 5G services will depend on CSPs modernizing their IT, across internal systems and external networks. This demands a shift to open, agile technology platforms built on the hybrid cloud.

Driving opportunity at the edge

Where new revenue streams associated with 4G were predominantly consumer-oriented, the 5G opportunity is in industry applications. 5G, deployed in tandem with cloud, the Internet of Things (IoT) and Artificial Intelligence (AI), will enable new, groundbreaking use cases in virtually every sector.

With 5G’s superfast data rates, ultra-reliable low-latency, and unprecedented network capacity, this perfect confluence of technologies enables, and dramatically improves the performance of an emerging distributed computing framework called edge computing. And this means more of the data industry applications depend on can be stored and processed at the network edge.

In many instances, these next generation services simply could not work if data was routed across the entire network, from the data source or the user to a centralized processing site. Economically inefficient for the CSP, it would also negate the intended operational benefits for customers.

Manufacturing provides a compelling example. An optimized 5G-enabled edge network would result in ubiquitous connectivity, driving seamless integration, automation and control of robotics across the factory floor. In doing so, it provides the ability to collect, analyse and distribute data, locally and in real-time, imbuing the system with self-optimization capabilities that can drive huge efficiency savings and bottom-line benefits.

All of this is only possible as a result of 5G, distributed cloud, and the network’s ability to do so much of the heavy lifting at the edge.

Next generation connectivity demands next level customer support

For many CSP enterprise clients, developing and implementing these new applications will represent the most significant transformation they have ever undertaken. They will need external support to navigate the journey, from trusted partners that understand their business processes and supporting IT.

This includes technical assistance on the design of 5G applications, as well as guidance from CSPs to source the best communications and Edge Cloud solutions to support them. Ensuring they are well-positioned to support their clients will depend on CSPs leveraging cloud technologies themselves to modernize their IT in three key areas.

Transforming internal IT systems

First and foremost, many internal IT systems will need migrating to the cloud to provide the consolidation, economy of scale and agility necessary to support 5G transformation. This involves taking a fresh look at everything from ERP and CRM, to billing and revenue management.

Almost every enterprise cloud strategy is now built on multicloud principles, featuring two or more clouds from different providers, so effective IT service delivery increasingly depends on the adoption of microservices. A cloud-native architectural model, the use of microservices breaks applications down into independently deployable smaller components, ensuring greater portability and scalability.

This approach will likely require the support of a collaborative, non-proprietary cloud partner that can help CSPs establish best practices.

Cloudify the network

Following internal IT transformation, CSPs will need to cloudify their networks. This is not a new development – cloud technologies have been applied across CSP networks for years. But in the past it has been done in a siloed fashion, with distinct services implemented in specific domains. When it comes to 5G, CSPs will see the greatest benefits by building a singular cloud platform, on top of which they can deploy virtualized or containerized network functions.

Legacy systems that see these functions deployed in silo limit the potential of cloud, reducing agility and economy of scale. With clients increasingly looking for bespoke industry-specific services, CSPs will need the ability to deploy cloud services according to different needs across the network. The cloud partners they choose to work with will need to be able to support this kind of specificity.

Delivering 5G business services

The final area to focus on is B2B IT – all of the systems CSPs use to deliver services to their clients. The infrastructure it is built on will have to support all the super-high speed, ultra-low latency and massive capacity dependent next generation applications businesses will expect from 5G. In addition to hybrid cloud, this will also depend on the ability to provide use case specific distributed cloud functionality.

Only this approach can provide the flexibility required to integrate multiple clouds, from any cloud vendor, as well as launch consistent cloud services anywhere – on premises, at the edge or in public cloud environments.

This is vital for effective roll-out of 5G industry applications, particularly in highly regulated industries, like financial services or healthcare, where consistency in visibility, governance, security and a range of other factors is essential. Further, it is also important in ensuring uptime for those applications with particularly high-performance requirements, such as autonomous transport networks or remote surgical procedures.

Leading CSPs are already advocating this approach. Vodafone is a good example, investing hundreds of millions of Euros in a range of open, flexible digital services to help its business customers securely integrate critical applications via the cloud to drive innovation.

Navigating the post-pandemic economy

It is an unfortunate fact that the ongoing COVID crisis, and projections of an economic downturn throughout next year, mean organizations in every sector will find it difficult to secure funds for broad digital transformation initiatives in 2021.

However, the pandemic has made it clear that doing nothing is not an option, as those businesses furthest along in their digitization journeys were better placed to absorb the shock of the pandemic. Indeed, digital transformation, particularly next-generation technologies like 5G and edge, sit at the heart of the Europe’s economic recovery plan. Heralding a new Digital Decade, the European Commission believes digital transformation is the basis of a more inclusive, resilient and innovative Europe.

For businesses, success will depend on a considered approach that balances operational need against financial reality. Just as CSPs will have a major role to play in helping their clients to develop practical 5G transformation plans, CSPs will need cloud partners that understand their business, the pressures they are under, as well as their enterprise client business models too.

It is important to recognize there is an inherent risk when transforming key infrastructure and critical operations.  Technology vendors, CSPs and end-clients must be able to collaborate in an agile way to both mitigate this risk and ensure 5G transformation delivers on its promise.

From building the enterprise specific use case model required for CSPs to seize the 5G for business opportunity, to delivering the open platforms enterprises need to ensure transportability of applications among different clouds, these relationships are central to success.

Only a true partnership with a cloud partner with enterprise pedigree will unlock CSPs’ competitive edge and ensure they do not miss out again.

Eduardo is responsible for leading the Telco and Media Industry in EMEA for IBM. He manages the business development for these sectors across the region, working with all customers and partners. He is an experienced Business Consulting, ICT and Telecommunications Industry professional who has had roles in sales, consultancy, and developing products and customer-focused solutions. He joined IBM in 2004 having previously held roles at HP and Ericsson.