5G is ushering in unprecedented connectivity, speed, and potential. With billions of dollars invested in building 5G capabilities worldwide, the stakes have never been higher. This investment is not just coming from Telcos but also from global governments. For example, the CHIPS and Science Act in the United States includes a $1.5 billion investment in promoting and deploying wireless technologies.
For North American telcos, there is one more aspect driving the need for evolution – the massive scale of smartphone usage in the country. With smartphone penetration reaching 92% in 2023, the opportunity for revenue through connections has plateaued. Where else can telcos find new revenue opportunities?
To keep up with these demands and the need to evolve quickly, telcos/mobile network operators are predicted to spend over $600 billion on 5G infrastructure between 2022 and 2025. They face the urgent need for assured return on investment (ROI). The scale of 5G monetization required to achieve proportionate returns on such massive investments is impossible if telcos continue acting as mere connectivity providers. Their transformation to solution drivers is no longer an option—it’s a necessity.
The Telco Transition for Monetization: A Solution-First Mindset
Historically, telcos have been the backbone of connectivity, focusing primarily on offering stable, high-speed connections. In a world where connections were the end goal, this model thrived. But when more contemporary network generations came around, such as 4G, this traditional business model started to crumble. Telcos missed the opportunity to offer applications for 4G, and services like Twilio bridged that gap by offering a unified messaging, voice, and video API experience to build and deploy 4G applications and solutions.
Some telcos and mobile network operators are now looking to compensate for that lost opportunity. The emergence of 5G is raising the bar further. 5G’s low latency, higher bandwidth, and network programmability capabilities lay the foundation for enterprise customers to become better equipped to leverage AI, IoT, edge computing, and automation in their digital transformation journey.
Enterprise businesses predicted to invest significantly – US$6.4bn – on private advanced networks like 5G and LTE – understand these possibilities and demand higher ROI than faster connections.
Mobile operators are seeing the opportunity to serve enterprise customers with private mobile network offerings, a deviation from their traditional business model focused on connections, subscribers, and devices and conventional metrics like ARPUs. Telcos must rise to the occasion and offer enhanced services and industry-specific solutions that address business goals that previous network generations have not addressed. Mobile operators must undergo a significant shift as drivers of comprehensive solutions to tap into new possibilities instead of viewing themselves as connectivity providers.
To win the 5G race, telcos need to embrace an enterprise mindset rather than the consumer mindset of 4G. Telcos must avoid broad horizontal solutions and offer specialized solutions catering to a specific vertical’s unique problems. Enterprises do not want to be sold an expensive 5G network; they want a solution that solves a real problem. If that solution requires 5G, they will gladly pay for it.
Future’s Calling: Telco’s 5G Monetization Maturity Roadmap
The challenge of monetizing 5G is complex, multifaceted, and tied to evolving enterprise needs and technological advancements. To unleash the true potential of 5G, telcos must innovate fast and adopt strategies that align with a solution-oriented mindset. Here, we present a set of crucial guidelines that can help telcos navigate the intricate landscape of 5G, transforming them from mere connectivity providers to solution architects of the future.
1. Offer Outcomes via Solutions – Higher Speed is Just Half the Game
Telcos must focus on mission-critical packaged solutions and unique industry vertical offerings. Understand the specific demands of various industries – healthcare, manufacturing, public sector, or mining – and build and offer solutions accordingly.
For instance, 5G-enabled remote healthcare applications can allow seamless clinical collaboration from miles away, offering unprecedented access to remote expert care. 5G’s programmability, reliability, and higher speed have empowered Shabodi partners to bring such solutions to the market.
In manufacturing, leveraging 5G-enabled Automated Guided Vehicle (AGV) solutions can bring transportation efficiencies, reducing errors and accidents and boosting warehouse staff productivity.
Solutions like these unlock new revenue streams for telcos, providing higher returns on their massive 5G investments.
2. Bridge the Capability Gaps – Enable Developers to Build Network-Aware Applications with Simplified Network APIs
The shift from pure connectivity to solution-driven offerings requires telcos to enable their enterprise customers’ or application vendors’ developers to build 5G applications, solutions, and services efficiently and at scale. Telcos can accomplish this by exposing mobile network APIs in their simpler form to developers. Mobile network APIs offer high value to application vendors and enterprise developers, like Quality on Demand (QoD), hyper-precise location, user authentication, device status, etc.
However, application and solution developers do not have the deep telecom networking knowledge needed to build network-aware applications that use mobile network APIs to maximize 5G’s potential. Also, application developers lack knowledge of 3GPP mobile network standards, differences among various releases, and vendor platform implementation nuances.
Hence, telcos must offer simplified network APIs to developers and consider bundling multiple network APIs into a single API call to lower the learning curve for the developers. In addition to this, it is essential to build a stronger platform to bring developer ecosystem and application marketplace.
This is where solutions like Shabodi’s Application Enablement Platform (AEP) come in. The AEP offers developers a common API framework, allowing them to build for 5G at scale. It brings agility and innovation to telcos, enabling them to offer platforms, solutions and new monetization models such as network-awareness-as-a service. Shabodi enables telcos to be solution providers rather than just a dumb pipe.
3. Partner for Skill and Scale – A Holistic Ecosystem Approach
5G monetization requires more than technological acumen; it calls for collaboration among the ecosystem to deliver value. Beyond internal capability development, forming strategic partnerships with systems integrators, application developers, application vendors, or other industry players can broaden reach and enrich offerings.
Such partnerships augment capabilities and open doors to new markets and customer bases. Collaboration with leading tech innovators like Shabodi can drive next-level solutions, offering platforms that simplify the development of network-aware applications, further unlocking the potential of 5G.
Meet Us at MWC Las Vegas to Start Your 5G Monetization Journey
Reimagining 5G ROI is no longer a futuristic concept—it’s an urgent mandate. Telcos must evolve from pure-play connectivity providers to solution drivers to monetize their hefty investments in 5G.
By focusing on customer needs, bridging capability gaps, and scaling through partnerships, telcos can create a future where unprecedented connectivity meets unprecedented solutions. And no matter where telcos are on this 5G monetization journey, Shabodi is geared to empower them with advisory services, deep industry knowledge, and recent advances in building next-gen applications for 5G. Shabodi experts and platforms are helping telcos realize the full potential of 5G and other advanced networks like 6G, Wi-Fi 6, and LTE, among others.
As Shabodi gears up for the MWC in Las Vegas next month, our message to network providers and telcos is clear: The 5G era is here. The question is, are you ready to drive it or merely follow?
It is now up to you to:
-Move the needle from being connectivity providers to enterprise solution providers.
-Diversify revenue streams by monetizing Network APIs and offer mission-critical industry vertical solutions to enterprise customers that deliver business outcomes.
-Build a robust developer ecosystem for rapid innovation of new solutions and competitive differentiation.
Team Shabodi will be attending the Mobile World Congress Barcelona 2024. Schedule a meeting to discuss the path to monetization for your investment by clicking here