Corporate interest in 5G and IoT up amid COVID-19

More than half or 52% of enterprises  have shown greater interest in 5G and IoT in the wake of the current COVID-19 pandemic, based on the latest EY Reimagining Industry Futures Study 2021, a global study involving over 1,000 companies across a range of sectors.

What’s more, 74% of respondents believe 5G will give them an opportunity to reinvent their processes over the next five years.

“Just as 4G networks has fundamentally disrupted consumer technology, 5G will be the game-changing technology for industrial transformation across all sectors,” said Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications (TMT) leader-elect.

He pointed out that access to 5G networks will be key to realising the potential of industrial disruptive technologies such as AI and IoT that will enable enterprises to establish their market leadership.

“Laggards will face strong barriers to entry and struggle to bridge the digital divide,” he added.

APAC ahead in 5G deployments

The study revealed that Asia-Pacific is pulling ahead of the Americas and European terms of current and future 5G investments, with 78% of organisations currently investing or planning to invest within the next two to three years, compared with 71% of organisations in both the Americas and Europe.

Moreover , 27% of Asia-Pacific organisations signal significantly greater interest in 5G and IoT since the COVID-19 pandemic, compared with 13% and 15% in the Americas and Europe, respectively. Overall, the study finds European enterprises are lagging compared with the other regions in terms of recognizing 5G’s potential: 70% believe that 5G will enter the heart of their business processes, compared to 80% in Asia-Pacific and 75% in the Americas.

Not all areas in Asia Pacific are on the same page with regards to the stage of 5G deployments, Wang observed.

To date, Singapore, Thailand and Vietnam have also publicly announced their 5G network deployment plans, and Malaysia is targeting to roll out its plans by the end of 2021.

“Despite strong government support for 5G in the Southeast Asia, the region is lagging behind other markets. After all, telco operators in Southeast Asia are still recuperating their investments from laying out 4G networks,” Wang said. “Furthermore, the capital expenditure of 5G technology is significantly higher than that of 4G, and industry demand is still nascent given that 5G business use cases are still emerging. Without clear and established cost benefits, overall delays can be expected in the region.”

Wang added: “If the status quo remains unchanged, and enterprises are unable to leverage 5G as a key enabling technology in their digital transformation plans, this will significantly impact the fundamental competitiveness of the region. The resulting bipolarisation of technology-enabled productivity could lead to a widening digital and economic gap between developed and undeveloped countries.

“Addressing the complex and critical challenge of enabling 5G in the region will require more than government support alone. The collective buy-in, as well as collaborative investment and effort of enterprises, telco operators and all stakeholders in the entire ecosystem, will be needed for the successful rollout of 5G.”

Telco operators lack digital transformation expertise

Meanwhile, Tom Loozen, EY Global Telecommunications Leader, advised telco operators to step up in their transformation expertise as companies rely on their capabilities as experts.

The report finds that only 18% of company respondents see telco operators as digital transformation experts, a vital competence that must be improved as enterprises increasingly turn to 5G to drive transformation agendas forward. The majority of respondents see IT services and application/platform vendors (51% and 65% respectively) as digital transformation experts.

When asked what their top 5G priority was, 36% stated it was around exploring 5G’s relationship to other emerging technologies; while 5G’s integration with existing technologies and processes was seen as the number one challenge, cited by 38% of business respondents.

“Organisations understand the importance of 5G, IoT and other emerging technologies; however, the capability gap among suppliers is a key concern,” Loozen said. “Telco operators should take steps to improve their transformation expertise, recognising that businesses want suppliers to act as partners that provide end-to-end solutions. For this to happen, operators should explore new ecosystem positions while focusing on the opportunities for business model overhaul that 5G can enable.”

Source: Corporate interest in 5G and IoT up amid COVID-19