CSPs falling behind with enterprise 5G, despite higher than ever demands
An annual report finds CSPs are slow to react to demands, despite double the enterprise 5G projects over the year.
In its annual enterprise 5G report, Beyond by BearingPoint, in collaboration with Omdia, has revealed the share of enterprise 5G deals led by Communications Service Providers (CSPs) has fallen from 21% in 2020 to 16% today. Despite this, the number of enterprise 5G projects doubled over the year.
The report finds that while telcos recognise the need for multi-technology, omni-partner, and solution-oriented approaches for enterprise 5G, competition from alternative service providers has significantly impacted CSPs share of the market. The study found that CSPs are starting to realise the importance of the enterprise 5G market, but must fully commit and put the dedicated resources in place faster if they are to capture opportunities as they emerge.
The first report in 2020 found while industries and enterprises were ready to gain from the benefits of 5G, 72.3% of CSPs believed that most 5G revenues would be derived from B2B, B2B2C, or government/smart city opportunities. It also found that CSPs were being left out of 5G engagement and solution building by enterprises and other players in the market.
CSPs led only 21% of enterprise 5G deals, and in 40% of those deals, CSPs were the secondary supplier. The report found 32% were led by enterprises and 7% by alternative service providers.
A year on, BearingPoint says CSP thinking has evolved. The study shows CSPs now realise solution-oriented production models also require mastering multiple technologies (such as cloud, edge, AI, Wi-Fi 6) and partnership options to complement 5G networks.
According to this year's report, more CSPs have started providing private networks and 5G solutions to the enterprise. However, this uptake has been slow to react to enterprise demands. In the past 12 months, the research finds the number of Enterprise 5G projects doubled, while the share of CSPs deals dropped to 16%. While alternative service providers such as private networks specialists increased their efforts and operations to outpace CSPs.
The report also looked into the role of CSPs within the ecosystem through the eyes of potential partners such as systems integrators, global vendors and vendor specialists. It found all ecosystem players expect CSPs to take the lead on coordinating different services, technologies, and capabilities and believe CSPs need to step up into the role.
"CSPs are no longer trapped in their thinking and understand that enterprise 5G is an ecosystem play, which is good news," says Beyond by BearingPoint CEO, Angus Ward.
"However, despite developing and launching new strategies and forming partnerships, CSPs failed to move at the speed of enterprise demand. Enterprises are eager to adopt 5G solutions and reap the benefits the technology can bring to their businesses. Still, these findings can only lead us to one conclusion: CSPs understand the opportunity, but their determination and speed are lacking.
"CSPs need to stop hesitating and continue to be more collaborative, even when they may not be in full control of the product or solution. They must start living up to the expectations that enterprises and partners have of them, experimenting with business models, accelerating testing and monetising new offerings co-created with ecosystems of partners," he says.
The report emphasises the need for CSPs to assimilate lessons such as agility, speed, and focus from alternative service providers. It says they should move into the enterprise market without waiting for network slicing, complete 5G coverage, or other 5G capabilities.
It also highlights that 5G network design is only one component of enterprise digitalisation, and CSPs need to offer additional value to become preferred partners.
"It's clear the enterprise 5G market is not just about connectivity," says Omdia research VP, service provider - communications, Evan Kirchheimer.
"CSPs need to prove their prowess in security, network architecture, and design and demonstrate commercial creativity to win the trust of enterprises to do more. CSPs have technological assets and expertise. To bring these to life and monetise them in the 5G world, they need to form relationships with new partners and think creatively about what type of partner organisation will help them address the enterprise opportunity."
