March 1, 2018

Is Telecom’s Future About 5G or Changing the Consumption Model?

Service providers are finding that customers are more concerned with the ease of service consumption than faster network speeds.

The prevailing wisdom seems to be that 5G is still in the future. Service providers are continuing to generate revenue in 4G and LTE networks. And there are still opportunities to drive more profit from 3G and even 2G networks with new applications. So it begs the question: Is a faster, 5G network what really matters, or is the key to success changing the consumption model for services across all networks?

Satisfying Enterprise Demand

This is not a question that undermines 5G’s value. In fact, 5G’s greatest value is most likely in B2B services. But the path to deriving and maximizing that value likely runs through a consumption model change that aligns telecom services with the self-sufficient way enterprises now consume cloud-based IT services. Self-service is critical. Robust and open APIs catalyze speed and innovation. Making mobile network services available in this mode may not be easy, but it’s likely necessary. If service providers want to remain relevant and move up the value chain, they need to be able to differentiate services and make it easier for their customers—especially groups of large enterprises who work together—to use, access, modify and build their own digital services.

Differentiating the Service

Today, there isn’t much of a difference between consumer and enterprise mobile services. The enterprise may have a chance to pool data or attain discounts, but the basic service—an activated phone, hotspot or first-generation IoT device—is the same. The enterprise often relies on a representative to manage add-ons, number ports, device swaps, billing issues and other day-to-day needs. Self-service applications have evolved to help enterprises become more self-sufficient, but enterprises have yet to achieve autonomy in their consumption of mobile services. It can be argued that this needs to change or that if service providers don’t proactively make this change, their competitors will. And an opportunity of this magnitude is not worth missing.

Achieving Autonomy in Service Consumption

Imagine you’re the CIO of an enterprise that sells organic produce. When you need file storage to be integrated with your supply chain application, all you need to do is leverage Amazon’s S3 API. Now, you can deploy location and temperature sensing devices on every crate of lettuce transported from the warehouse to the grocery store. Each device only needs a 2G or 3G connection to deliver its data and SIM activation. You don’t need phone numbers, and you don’t need separate bills or data plans for the devices. You just need a functioning mobile network that charges for what you use. You want to be able to activate devices with a high degree of automation on an as-needed basis, ideally through an API call from your enterprise logistics application. You do not want the service provider to be an intermediary in the process, especially because you ship 3 million crates of lettuce per month.

Unfortunately, mobile offers available today are considerably outdated when compared to the example above, in which storage is consumed easily via S3. This is the reality service providers face and it is not about “speeds and feeds.” It’s about making it much easier for businesses to consume the services they need, when they need them and to use mobile network services as part of the mashups they create within their digital initiatives. This adds substantial value to mobility services and helps service providers move away from the declining price, race to the bottom scenarios they face today. From this perspective, offering the network as a service, and as a platform for innovation, is more important than finding reasons to roll out the next faster network.


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