Unlocking the value of 5G - KPMG Global
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Unlocking the value of 5G

Unlocking the value of 5G

Unlocking the value of 5G

Alex Holt | Leadership,

Lately I have spent a lot of time with the boards and leaders of the world’s largest telecommunications, media, and technology businesses.  When it comes to the telcos, while they are excited for the opportunities 5G presents, they’re concerned about the costs to build out the new networks and the return on that investment.

While it’s true that consumers will probably pay more for a 5G connection, there is agreement that this increase will not cover the investment and pay back the networks. The hype and anticipation surrounding 5G’s remarkable potential for consumers and lifestyles is exciting, but in reality, the greatest benefits of 5G will likely emerge in the enterprise market.

Unfortunately, despite 5G’s vast capabilities to transform everything from communications to manufacturing to healthcare to retail and beyond, a key piece of this enticing 5G picture is still missing. The vision needed to comprehend and strategically align the benefits of 5G with current and future business models is a challenge for most companies I encounter today. Questions about payback on multi-billion-dollar 5G initiatives are top of mind, especially since no industry has yet become a ‘flag bearer’ in bringing 5G to life.  

Their reality is that they will not reap adequate returns from consumers alone. At the same time, most new value created via 5G will go to service platforms – up to 95 percent – rather than the cheque-writing telcos! To make ends meet, their enterprise divisions will need to create profitable new revenue streams, knowing that enterprise customers will invest to dramatically improve productivity, safety and security.

Look to 5G’s enablers of value

5G has five key features that will unlock value by dramatically redefining existing business models or creating new ones. These five enablers of value – Capacity, Reliability, Latency, Bandwidth and Efficiency – will deliver transformational capabilities. 

I see the need for telcos to go beyond these 5G enablers. With better understanding of the what, why, when and how 5G will drive tangible benefit for their enterprise customers, telcos can develop informed strategies for the future. To delay is to lose ground. 

Understand the DNA of 5G Enterprise value 

Research and analysis by KPMG has identified an estimated US$4.3 trillion in value to be unlocked through use-cases over the next seven years across government, finance, healthcare, manufacturing, consumer goods/retail, and the technology/media/telecom industries.

We see 6 components of 5G Enterprise DNA that will drive value for these businesses.  These are not the same as the benefits of 5G. Instead, they are the business outcomes that can be delivered by 5G:

- Machine-enhanced decision making;
- Data rich environments;
- Visualization;
- Agile automation;
- Intelligent efficiency; and
- Trusted connections.

Of course, it won’t be a matter of throwing the 5G switch and seeing a new world emerge. There will be initial roll-outs in smaller areas, what we call campus-style or private networks. These smaller 5G networks will solve enterprise problems and deliver innovations within ‘centralized’ verticals, for example a localized smart-manufacturing environment.

After this, as 5G networks become publicly accessible within cities, we will see the growth of city use-cases, enabling various ‘decentralized’ verticals to unlock value, including healthcare and financial services along with mobility, live entertainment and more. Beyond this timeframe we can expect the emergence of exciting and unprecedented use cases that we cannot yet predict. 

Download the white paper (PDF)