Study finds 5G investment set to soar
The study finds that most enterprises (74%) believe 5G will enter the fabric of their business over the next five years. However, of those investing in fifth generation technology today, 67% are either engaging in trials or are in discussion with suppliers, rather than moving to the operational phase.
This caution is driven by several key factors, including knowledge gaps around use cases (75%) and a perception of 5G as an incremental progression on 4G (69%). In addition, respondents cite integration with existing technologies as the biggest internal barrier to adoption (37%), while the perceived immaturity of 5G technology tops the list of external challenges (35%).
Tom Loozen, EY Global Telecommunications Sector Leader, says: “Enterprises are aware that 5G can fundamentally reshape their organizations. To succeed, they need to develop a road map that is aligned to the broader landscape of technology transformation, but anxieties persist around technology integration, maturity and cybersecurity. To overcome this inertia, 5G vendors need to articulate a more compelling vision of the opportunity, while enterprises need to educate themselves on the game-changing possibilities that go beyond efficiencies alone.”
The study reveals that forming the right partnerships could be the key to unlocking 5G potential. Seventy-nine percent of respondents believe they require external support to generate robust fifth generation use cases, while 77% say they will prioritize vendors that can deliver 5G business outcomes as partners – rather than offering pure cost benefits. Notably, 60% indicate that their organization is currently struggling to identify the right 5G vendor, and 67% say their vendor interactions to date have largely been transactional and tactical.
Adrian Baschnonga, EY Global Telecommunications Lead Analyst, says: “It’s clear that enterprises now want consultative dialogue that delivers business outcomes through end-to-end solutions. 5G providers need to reinvent themselves as trusted partners, prioritizing access to an ecosystem of competencies that can deliver 5G capabilities at scale. Delivering actionable solutions that encompass the full spectrum of enterprise needs – from use case creation to cybersecurity – will be critical in the long-term.”
Geographically, US enterprises lead the fifth generation technology adoption curve according to the study, with 19% currently investing compared with 13% in Europe. Just 10% of Asia-Pacific enterprises are currently investing, despite representing the highest level of planned expenditure over the coming year. Overall, US enterprises are set to remain ahead, with almost half (48%) planning to invest within the next 12 months, compared with 43% in Asia-Pacific and 38% in Europe.
The energy (23%) and technology (22%) industries are currently 5G investment leaders, with health care (61%) and financial services (58%) organizations projected to emerge as the biggest investors within three years.
To read the study in full, visit www.ey.com/tmt.
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