EY: Nearly 50% of Firms Use 5G to Optimize Business Process


Companies are looking at 5G to alleviate immediate business pressures brought on by events such as the current COVID-19 pandemic over deployment of advanced 5G use cases.


According to a latest study by Ernst & Young (EY), with nearly half or 49% of those polled saying they are using 5G primarily for process optimization as a key application, while only 28% favor advanced 5G use cases around virtual or augmented reality.


“While the hype around how 5G low latency could power the metaverse or commercialize augmented reality continues to intensify, this study indicates that the technology has moved out of its infancy and is now actively being applied to drive real-world benefits,” said Tom Loozen, EY Global Telecommunications Leader.

He noted that 5G is following the same innovation cycle of other transformative technologies.


“Sophisticated use cases will become important in time. More pressing, however, is the need for 5G providers to tune their solutions to the practical demands of industry leaders today,” Loozen added.

This is the major takeaway of the newly released EY Reimagining Industry Futures Study. Entitled “Enterprise 5G: is the Industry 4.0 growth opportunity being overlooked?” the study is on its third edition.


Indeed, 85% of respondents said the impact of COVID-19 is driving their interest in 5G, up from 52% in last year’s study; 80% cited supply chain disruption for its 5G pursuit, while 71% cited the focus on environmental, social and governance (ESG) issues.


However, the study pointed out there is some way to go in realizing these ambitions: 37% are concerned that 5G and internet of things (IoT) vendors’ current use cases do not meet their business resilience and continuity needs, and 47% do not think their sustainability goals are met by today’s use cases.


5G adoption roadblocks in Southeast Asia. Similarly in Southeast Asia, 5G adoption has also met with roadblocks, according to Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications (TMT) Leader.


“Use cases for 5G in the private sector will need to be more clearly defined before technology operators are confident enough to take 5G applications to market. For now, governments are the main drivers of investments in 5G infrastructure public sector projects. Closer to home in Singapore, the 5G@Sentosa project provides a testbed for promising public sector use cases that could be rolled out on Singapore’s mainland,” Wang said.


Meanwhile, the study showed the growing appeal of private networks as telcos battle credibility gap, with enterprises becoming increasingly receptive to 5G solutions delivered through disruptive business models:


“Private networks are of high quality, secure and seamless. However, private network operators will need to provide a strong cost-benefit case to justify the high investment costs. The commercialization of 5G private networks will also require governments to play an active role in outlining the key considerations and providing a clear regulatory framework on licensing for private networks,” Wang said.


The study also found that telcos face a significant credibility gap with regards their perception as digital transformation experts, with only 19% of enterprises considering them as such (unchanged from last year’s study findings). Conversely, 30% trust network equipment vendors as favored digital transformation experts – up from 19% last year.


“Disruptive customer signals suggest that telcos’ traditional relationships with enterprise customers are under pressure and more agile go-to-market strategies are essential in a 5G-IoT world. Telcos should take steps now to help ensure that they can meet enterprise demand for private network deployments,” said Loozen, EY Global Telecommunications Leader.


Europe leads 5G investment, but global confidence stalls

5G leads all other emerging technologies tracked in the study in terms of future spending intentions, with 56% of enterprise respondents planning to invest within three years. Current and future spending intentions for 5G over this period are highest in Europe (up 5% to 76%), in contrast to last year when Europe lagged other regions.


However, the findings caution that investment should not be taken for granted, with intentions falling by 8% year-on-year to 70% in Asia-Pacific and the Middle East.


This caution is indicative not only of a more defensive approach toward 5G, but of stalling confidence generally, with only 24% of enterprise respondents stating that they are very confident they can successfully implement 5G (down by 1% year-on-year). This is compounded by enterprises’ poor understanding of 5G’s relationship to other emerging technologies, now cited as the biggest internal challenge to 5G perception – up from fifth position in last year’s ranking.


“There are still fundamental anxieties around how 5G works alongside other emerging technologies. 5G providers should take this on board and adapt their customer discussions accordingly. By educating enterprises on how 5G can be harnessed by other emerging technologies, service providers can boost enterprise confidence in their 5G deployments,” said Adrian Baschnonga, EY Global Telecommunications lead analyst.


Source: futureiot.tech