How to achieve ROI on your 5G investments

5G has been heralded as “an engine of far-reaching enterprise transformation” – a technology that could supercharge IoT, reinvent industries and fundamentally reshape organisations and business models. But many businesses are still sceptical over the potential returns of the new mobile network.

According to an EY study², enterprises around the world may have positive 5G investment intentions, but most remain at the very beginning of their 5G journeys. Only 3% of companies with current or future 5G investment plans currently have 5G operational within their organisations.

One of the obstacles to achieving ROI with 5G is the challenge of integrating it with existing – and emerging - technologies and processes. For example, the deployment of 5G into the existing network architecture will require backhaul capacity to be upgraded since the 5G network delivers far more traffic than any of its predecessors.

Businesses will also need to get their infrastructure software-ready. As the first mobile network truly born in the cloud, 5G allows new features and upgrades to be added through the use of software. An example is network slicing in 5G, which will enable businesses to create isolated networks to accommodate different use cases. This, however, will require use of software defined networking (SDN) and network function virtualisation (NFV).

Software-enablement and the necessary infrastructure upgrades are thus some of the important first steps that have to be taken before businesses can start to realise the ROI for 5G.

Once the groundwork is done, 5G will allow SDN-enabled businesses to “cut-the-cord” and increase the reach and reliability of their WAN with flexible, agile and high-performing wireless connections. The software-defined model will enable this connectivity to be provisioned on-demand and pave the way for advanced orchestration and automation, allowing the entire network to be managed as a single unified fabric. The deployment of 5G in the context of software-defined networking will thus amplify its value proposition and strengthen its ROI proposition.

Likewise, a symbiotic relationship between 5G, Internet of Things (IoT) and other emerging technologies will bring about returns that are greater than the sum of their individual benefits. An example will be the deployment of 5G with low power wide area (LPWA) technology. LPWA strengthens the ROI value proposition of 5G by enabling massive device connectivity with lower power consumption and easier “out of the box” deployment, resulting in less maintenance and replacement costs.  

Another barrier to achieving ROI for 5G is the lack of imagination when it comes to formulating breakthrough use cases for the technology.

5G has been described as a productivity accelerator – a technology that will boost performance with faster file transfers and downloads, enhance online collaboration and deliver more reliable video conferencing.

But companies will need to look at 5G ROI beyond efficiency gains in order to realise the transformational benefits of the new technology.

Interesting lessons can be drawn from the 4G experience, where initial adoption was driven by users wanting faster connectivity to stream videos, shop online and enjoy a richer user experience.

But 4G really took off in a big way only after the emergence of applications which were able to make use of its ability to transmit data and locations and change the way mobile users lived. Uber, for example, created a ride-sharing market which would have been impossible without 4G. Likewise, businesses will need to identify similar opportunities with 5G once the full capabilities of the technology become clearer.

One area that businesses could start looking at are the opportunities that lie at the confluence of 5G, AI and automation. 5G will help propel AI and automation mainstream by providing the real-time and ubiquitous connectivity required to enable accelerated data processing at the network edge. This sets the stage for a wide range of potential use cases from supply chain management and orchestration to personalised products and services and smart virtual or augmented reality applications.

It is important to keep in mind that with 5G, changes will occur across a collection of different technologies that will be rolled out over time, each of which presents new opportunities and its own ability to increase ROI. SDN, LPWA, AI and automation are just the tip of the iceberg. Businesses should therefore view the transition to 5G as less of an event and more of a pathway, with new pockets of revenue opening up as new components and capabilities are unlocked.

To make the most of the technology, however, organisations must first make the necessary transformational overhauls. And therein lies another major reservation surrounding the ROI for 5G - a lack of faith in the organisation’s ability to execute this transformation.

According to the EY study exploring changing enterprise needs and attitudes towards 5G, three-quarters of enterprises cited organisational overhaul as a prerequisite for successful implementation, but less than half were confident that their organisations can make the transition successfully.

A key inhibitor is socio-technical inertia. The organisation is resistant to structural, social and technological changes and makes perfunctory moves which undermine the larger transformation efforts. It also starts to adopt a defensive mindset. Up till recently, many organisations chose to fend off competitive pressures by focusing technology on defending and maintaining their current positions, rather than a means to build new business models and products.

But in the past two years, this mindset has been changing, thanks to an unexpected push from the pandemic. A Deloitte study³ on advanced wireless adoption found that the crisis has spurred organisations to re-evaluate their priorities and accelerate investment in wireless networking, particularly newer technologies such as 5G, as a way to address current and future disruption and position themselves to take advantage of new opportunities coming up.

5G and its promise of real-time connectivity to a massive number of devices, deployed in combination with a host of exciting new emerging technologies, presents endless possibilities. Once business models are established to take advantage of its connection capabilities, there will be no stopping 5G, and the ROI is likely to be greater than what we can imagine.

Contact us to find out how to achieve ROI with 5G.

¹Allied Market Research, 5G Technology ROI Market by Industry Vertical (Automotive, Industrial Machinery, Infrastructure, and Healthcare & Life Science, 2020.

²EY, If you don’t trust your 5G vision, how will your customers trust you?, 2020.

³Deloitte, Accelerating enterprise innovation and transformation with 5G and Wi-Fi 6, 2021.