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Most communications service providers (CSPs) agree that 5G is a huge opportunity to crack the enterprise market and develop lucrative, new B2B revenue opportunities such as smart ports, factories and cities. During this roundtable discussion, executives from Australian operator Optus and Hong Kong-based CK Hutchison share and discuss with other operators their companies’ successes and lessons learned.
John C. Tanner
Asia-Pacific CSPs explain what they need to succeed with enterprise 5G
Most communications service providers (CSPs) agree that 5G is a huge opportunity to crack the enterprise market and develop lucrative, new B2B revenue opportunities such as smart ports, factories and cities. During this roundtable discussion, executives from Australian operator Optus and Hong Kong-based CK Hutchison share and discuss with other operators their companies’ successes and lessons learned. The key to success is understanding that 5G doesn’t have to do it all: It’s one option of several in a CSP’s connectivity toolbox. The real challenge lies in developing an ecosystem of partners around 5G, embedding AI and automation into the fabric and developing a culture of collaboration – not just with partners, but also with employees and end users.
Chris Mitchell, Managing Director, Optus Enterprise, says that his approach to enterprise 5G starts with the recognition that while 5G is a new connectivity option, it can be used in conjunction with narrowband IoT, fiber, 3G, 4G and even satellite to create B2B services that best serve the customer’s needs. “So, part of the way we think about it is what I call the clarification of the network,” he explains. “Based on all those technologies, what is the use case? What is the SLA [service level agreement] that's important to the customer?” From there, an operator can take into account the chief characteristics that 5G brings to the table: Once a CSP understands what 5G can do and how it fits into the connectivity portfolio, it can start constructing services based on the capabilities available. As it is early days for the 5G standard, Mitchell says Optus is focusing on the immediate opportunities enabled by higher throughput, such as video analytics. As the technology evolves, Optus will turn to more latency-sensitive use cases such as connected cars, remote surgery and autonomous operations.
Obviously, any 5G opportunity will depend on where the coverage is, which is why Michell sees private 5G networks aimed at verticals such as shipping ports, airports and mines as the most immediate opportunity. “Then it’s going to flow on to public campuses – smart universities, hospitals, those sorts of things” he says. “Then ultimately, it will flow all the way to the edge, where we’re spending a lot of investment dollars on building around hybrid MEC platforms.” Peter Bourke, Group Head of Technology, CK Hutchison Holdings, agrees that 5G for closed network and campus environments has unlimited potential, which for his company currently means ports. Several CK Hutchison ports are already using 5G for IoT use cases and data gathering. “Ports has traditionally been a business that has been very labor-intensive,” Bourke adds. “We see automated vehicles – both for lifting and freight movement around the port deck – as being a really great potential opportunity.” CK Hutchison is also applying 5G to use cases such as preventive maintenance for infrastructure and utility companies by using 5G to connect data-gathering sensors and AI in the backend to analyze the data.
Mitchell and Bourke both see automation and AI as essential to 5G. Mitchell cites three areas where AI has already been transformative: Bourke notes that CK Hutchison is also focusing its automation/AI efforts around the latter two points. In the case of customer experience, Bourke offers the example of adding “magic mirrors” to its online retail shopping sites which enable visitors to try cosmetics virtually from home – a handy feature in these pandemic years.
Mitchell and Bourke agree that the enterprise 5G opportunity fundamentally depends on collaboration between operators, business partners, vendors and enterprises. “This is a technology where you do need to get the developers relatively hands-on,” Mitchell says, citing the 5G innovation labs Optus has set up around Australia to allow developers to experiment with 5G and innovate new use cases. But more than that, a 5G ecosystem will be crucial to developing industry-based applications, he says. “If you think about the whole notion of smart campuses, you need to have relationships with air conditioning suppliers, automation suppliers, solar providers, battery suppliers, etc., so [ecosystems] become very important as you start to stitch the automation fabric together,” he explains. “I think that at least for a company like ours, that’s another level of partnership and capability that you need to have on your staff to knit those very complex ecosystems together, and drive the relationship so that you can get an outcome for the customer.” Bourke agrees, adding that it’s important for the enterprise to embrace that collaborative approach rather than leaving it all to the CSP. “It’s very important that as the customer, you need to take a leading role. I think just to hand it over and allow an SI [systems integrator] or a business partner to take total ownership isn’t really a situation that we work with here in CK Hutchison,” he says. “So, at the end of the day, we own and manage the projects and the connectivity, and the collaboration is absolutely critical.”
Another area of agreement is that culture within telcos must change. While the enterprise 5G opportunity is typically a technology discussion, a cultural mindset shift within the organization is needed to embrace new concepts that disrupt the status quo. For Optus, that has chiefly involved adopting Agile methodology at scale and breaking down traditional silos across product development/creation, sales and service delivery. Bourke adds that this also requires hiring fresh minds with different skillsets. “I always work on the adage that if you have the same people doing the same thing, you’re always going to get the same answer,” he says. “So, we need to inject new people with new thoughts, new generations, new backgrounds, to come to these sorts of new plans and new innovations.”
Roundtable participants pitched in with their own experiences delivering enterprise 5G services – which mainly involved the various market-specific challenges they were facing. For example, Lindsay Zwart, Chief Enterprise Officer, Vodafone New Zealand, says that private 5G makes sense in New Zealand’s challenging geography, as the operator still has difficulty serving areas outside main cities (where most 5G coverage is) for use cases such as smart agriculture. Mitchell returns to his earlier point that 5G is just one tech option of many. “Not everything needs 5G,” he says, pointing out that some sensors transmit very simple data a few times a day. “At the end of the day, it comes down to what is the use case you’re trying to serve, and what are the underlying technology investments you’re already making that you can leverage for the deployment use case?” Another market-specific challenge, according to Chong Siew Loong, Chief Technology Officer of Singapore’s StarHub, is that most 5G enterprise opportunities and successes are framed within specific verticals such as agriculture, manufacturing, ports and stadiums. But Singapore has no agriculture or manufacturing, no major stadium, and only one shipping port and airport. “As a result, we tried to develop a lot of those use cases, and they are only for one potential customer and likely to have multiple operators like ourselves, SingTel and M1 trying to compete for that opportunity,” Chong Siew Long explains. Mitchell notes that this is why it’s important for operators to adopt a flexible platform approach “I think we’ve all got to get a platform mindset, he says. “Generally, enterprise service providers have tended to customize everything, and then you’re left with the inability to scale. So, I think the first thing is to think about platform.” Peter Maquera, Senior Vice President for Enterprise Group at Globe Telecom, a network operator in the Philippines, says that the key challenge with enterprise 5G services is that – similar to the consumer space – enterprise customers still primarily see 5G’s value proposition as a speed upgrade, which isn’t all that valuable if 4G speeds still work for existing apps. “What we learned is that to get away from that 5G versus 4G question, you probably need at least five to ten use cases to show them that 5G isn’t all about speed,” Maquera says. He gives an example of a bank customer communicating with the bank online. A bot with know-your-customer data might identify the customer, perform sentiment analysis and learn that they want to buy a car or house. “The customer puts on the AR/VR and it shows the homes that are available, what price, and what loan packages might be available,” Maquera explains. “So, you add up these five to ten things, and they go, ‘Okay, I get it – that’s not 4G anymore’.”
Mitchell notes that Optus invested in 5G with both consumer and enterprise segments in mind and ideas on how to monetize both. The catch is that operators can’t really choose whichever one they think will make more money sooner – they need both. “I don’t think you can roll one out with it without the other because you won’t get enough money in the near term out of enterprise, and you won’t get the full value out of consumer unless you’re building out some of these enterprise use cases,” he says. “So, the trick is to overlay those two things together and make sure your rollout plan is optimized for that.” The important thing to remember is that 5G is not a silver bullet – it’s an investment like any other, according to Mitchell. “At the end of the day, if you dumb us down to the lowest form, telcos make money through utilizing their network investments,” he says. “So, how do you sweat those assets? How do you get as much as much consumption out of all the different underlay technologies as possible? That’s how we’re thinking about it.”
