5G investment choices point to industry challenges

New figures from the Global mobile Suppliers Association (GSA) show relatively few communications service providers (CSPs) are investing in 5G standalone (SA) compared to 5G overall. And it says a lot about the challenges facing operators today.

In total, 493 CSPs are investing in 5G, according to the GSA, compared to only 111 who are putting money into 5G SA – even though the network technology for 5G SA is ready and the IT components and architectures to make network slices a reality is getting there.

Part of the explanation for the difference between the numbers lies in the fact that 5G NSA has been around for several years and SA is new. Yet the much lower number of operators actively investing in the move to standalone 5G is consistent with a hesitancy I’m seeing across the industry. The concern is around 5G SA’s commercial potential, based in two main factors: return on investment (RoI) models and the complexity of business diversification.

The move from LTE to 5G NSA was driven by competition; if one CSP in a country market offers it, the others had to follow. However, the reasons for deploying 5G SA are very different. They are dependent on use cases and many operators just aren’t seeing the right use cases to warrant the investment.

The examples of potential use for 5G SA aren’t obvious mass market revenue opportunities. Nonetheless, collectively they constitute a group of opportunities that warrant the move to 5G SA for CSPs hungry to chase B2B and B2B2X growth markets.

Success in securing a 5G SA RoI, however, means activating a highly diversified business model, so it’s understandable that we’re not seeing every operator going into this with gusto.

What the GSA figures underscore is that the current phase of transformation underway in the industry is more than just the next G. Instead, it represents a fundamental shift in the nature of these companies’ businesses – and that is hard.