As mobile operators struggle with an identity crisis, their vendors have been acquiring new strengths to tackle the potential with digital through M&A. For examples, Ericsson acquired Vonage, and IT players have been encroaching into the network space; Microsoft acquired Metaswitch, for network capabilities to further tap on the enterprise opportunity. Only a handful of mobile operators such as Singtel, Vodafone, and T-Mobile are leading the way with 5G solutions for enterprises. 5G solutions are coming out of boxes to make it easy for enterprises to adopt but more success with 5G is needed.

The industry cites cost and monetization as challenges faced by 5G. However, the business case could still make sense at high cost if monetization was not an issue. Hence, not cost but monetization may be the bigger problem; however, cost still needs to be managed. New innovative business models need to be crafted to re-engineer cost and reduce risk. In a 2022 Frost & Sullivan survey, 60% of respondents cited that they do not believe the “Build it and they will come” approach will be sustainable from 5G onwards. Mobile operators and their regulators need to consider new approaches to improve future prospects.

If there is need, 5G will be embraced. Indeed, 5G is finding a place in some of the most automated industries, for example, in existing semiconductor factories in Taiwan, driven by use of augmented reality and artificial intelligence. The reality is such that some companies and some parts of the industry are moving faster with 5G because there is an exact fit for the need being addressed but others require some development. The success of a few companies that are taking a different approach and achieving better outcomes such as Rakuten Mobile, signals that it is time for review of the relevance and effectiveness of global alignment. Competing global IT players can craft and execute monetization strategies faster than the global associations that bring together more than 750 mobile operators.

Beyond connectivity, the need for end-to-end integrated services cannot be met without greater collaboration. The legacy mentality of control needs to give way to trust as future growth of the telecom industry depends on how well companies can collaborate. Of the many partnerships that have been announced, many are collaborations with companies that do not compete. Part of the reason for this could be attributed to collaboration skills being rare amongst the telecom industry workforce, where a large majority of workers still comprise of men and the industry struggles with discrimination. Another reason is that tapping on the opportunity requires companies to be more open, which is still not something that is intuitive for companies, especially in the telecom industry.

The telecom industry faces skillset shortage that hampers the adoption of new emerging technologies and practices. Attracting top talent is a challenge as the industry is no longer a high growth industry. The incorporation of automation in parallel further adds complexity as mobile operators need to find the right balance between human touch and automation.

The industry is well aware that change is necessary but achieving change is an uphill challenge. Until recently, decisions have been for the short term. The business transformation that is necessary at this juncture are meant for long term, where clarity is elusive, and success is not guaranteed. This increases the difficulty in getting everyone—investors and customer—onboard. However, the future of the telecom industry is at stake if effective change is not made an immediate strategic imperative in the agendas of mobile operators’ CEOs.


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About Quah Mei Lee

Quah Mei Lee is a Director with Frost & Sullivan’s ICT practice. Working on Mobile & Wireless Research for Asia-Pacific, her area of expertise lies in telecoms strategy with a specific interest in 5G.

Quah Mei Lee

Quah Mei Lee is a Director with Frost & Sullivan’s ICT practice. Working on Mobile & Wireless Research for Asia-Pacific, her area of expertise lies in telecoms strategy with a specific interest in 5G.

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