Telcos are building on their reputation as a provider of connectivity services to become trusted partners in the evolution to next-gen networks and solutions.
Telecommunications companies have been spending billions of dollars acquiring wireless spectrum in order to build out their 5G networks—which places them under enormous pressure to grow revenue and recoup costs.1 Beyond their consumer connectivity objectives, many of these network providers are pursuing a share of the lucrative enterprise networking market.2 For many, their enterprise ambitions extend beyond mobile connectivity for business users, into the broader realm of private networks, edge computing, value-added enterprise solutions and the Internet of Things (IoT).3
However, achieving these ambitions won’t necessarily be easy. For one thing, 5G isn’t the only option for advanced wireless initiatives: For some usage scenarios, enterprises are adopting Wi-Fi 6, which they can deploy without licensing spectrum or engaging telco partners.4 And in markets where enterprises can own spectrum, such as Germany, telcos may have to compete with other vendors—including network equipment providers, hyperscale cloud providers (hyperscalers) and the enterprises themselves—to architect, build and operate 5G networks.5 Our global advanced wireless survey revealed that enterprises are currently most likely to turn to their organisation’s own IT staff (51%), followed by technology vendors (41%), before seeking advice from telecom/wireless carriers (33%), to guide their networking choices.6 Cloud and app providers are currently the most favoured for help with designing networks.
These current preferences aren’t that surprising. At least eight in 10 networking executives view advanced wireless as a key enabler of the next wave of innovative technologies they’re deploying to future-proof and transform their companies, such as big data analytics, artificial intelligence (AI), IoT, cloud and edge computing.7 While telecom companies have long sold connectivity services to enterprise customers, they haven’t historically been the go-to for digital transformation solutions. It makes sense then that tech providers—namely, cloud providers—are top of mind, since many enterprises are already working with them as part of their transformation initiatives. However, it’s important to note that the advanced wireless ecosystem is fluid and rapidly changing—and these preferences are likely to evolve as well.
Telcos and hyperscalers are both positioning themselves to take advantage of the emerging wireless opportunities. Spectrum licensing, mobility and device management are just a few of the new challenges presented by private wireless networks—and a place where network providers can shine. The telcos have expertise building out reliable “wireless superhighways,” and many are now in the process of engineering enterprise-oriented 5G products and services, as well as developing their go-to-market strategies. For their part, tech companies bring experience with data management, analysis and innovative application building—as well as an eager customer base.8
Indeed, cloud companies will likely be key: Nearly nine in 10 networking executives expect to deploy and manage their wireless networking applications and services primarily on the cloud or at the edge in the next 2–3 years.9 Telcos are already partnering with hyperscalers to extend cloud capabilities to the edge and offer more advanced networking solutions.10 And, many telco and tech companies are partnering to form innovation labs and incubators, aiming to codevelop innovative advanced wireless applications and products.11 Instead of competing head to head, it’s likely that network providers and tech companies will increasingly collaborate to develop the essential underlying infrastructure, applications and sales models needed to grow the market—and to deliver innovative enterprise solutions more rapidly.
As network providers aim to capture their fair share of the advanced connectivity market, they should expand their reputation as a provider of connectivity, to being a trusted partner for advanced wireless solutions in the enterprise.12
What’s more, the architecture of 5G networks is expected to become more virtualised, open and programmable, allowing best-of-breed components to proliferate.15 Managing and orchestrating a multitude of solutions is notoriously difficult. To tackle the growing complexity, adopters are likely to seek more help from system integrators and consultants. Against this backdrop, wireless carriers should consider partnering strategically with other vendors, as well as integrators, to provide full end-to-end solutions. As the underlying technologies mature, carriers can also commercialise standardised products and build their reputation as a trusted partner.
Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together one of the world’s largest group of specialists respected for helping shape many of the world’s most recognised TMT brands—and helping those brands thrive in a digital world.