EY research: 5G implementation a priority for businesses

The third edition of EY’s global survey, “Reimagining Industry Futures Study”, reveals that businesses around the world are turning to 5G technology to better manage the immediate business pressures brought about by the COVID-19 pandemic. 49% of respondents prioritize process optimization as a key application of 5G technology, compared to 28% who favor advanced 5G use cases with virtual or augmented reality.

A number of external factors influence businesses in this direction. 85% of respondents say the impact of the global health crisis has sparked their interest in 5G, up from 52% in last year’s corresponding study. 80% estimate that supply chain disruptions are driving the adoption of 5G technologies, while 71% cite an emphasis on environmental, social and governance (ESG) issues as a key driver. However, to realize these ambitious goals, there is still a long way to go: 37% are concerned that the current use cases offered by 5G and IoT providers do not meet their own business resilience and continuity needs , while 47% do not believe that sustainability goals are met by today’s technology use cases.

Europe leads 5G investment, but global confidence is limited

In terms of future spending intentions, 5G leads the other emerging technologies surveyed in the study, with 56% of the businesses surveyed planning to invest within the next three years. Intention for current and future spending on 5G is currently higher in Europe than last year (76%, up five percentage points), when it lagged behind other geographies. However, the findings warn that investment should not be taken for granted, with intentions falling eight percentage points year-on-year – to 70% – in the Asia-Pacific and Middle East region.

These findings are indicative of a more defensive approach to 5G, but also, more generally, declining business confidence, as only 24% of executives surveyed say they are very confident they can successfully implement 5G (down 1% from last year ). This is compounded by businesses’ lack of understanding of how 5G relates to other emerging technologies, which is cited as the biggest internal perception challenge around 5G.

Private networks growing in popularity as telcos struggle to address reliability gap

The study also finds that enterprises are becoming increasingly receptive to 5G solutions delivered through revolutionary business models. 77% of respondents are interested in using private networks to support the implementation of 5G and IoT technologies, while 71% are interested in purchasing 5G products through an intermediary rather than directly from a telco.

At the same time, telcos face a significant credibility gap regarding their image as experts in digital transformation, with only 19% of businesses perceiving them as such. Conversely, 30% trust network equipment vendors as experts in digital transformation – up from 19% last year.

Collaboration through ecosystems continues to be central to the business development agenda

69% of respondents say they are already working with other organizations as part of a business ecosystem. However, the findings show that businesses are bolder in their approach to partnerships, with 36% seeking new synergies with companies in other industries (up from 24% last year) and 73% prioritizing suppliers who can offer ecosystem interoperability as part of their 5G capabilities.

Commenting on the research findings, Mr. Giorgos Apostolakis, Partner in the Advisory Services Department and Head of Technology, Media and Telecommunications at EY Greece, said: “Following the cycle that other transformative technologies have drawn in the past, 5G has now moved into maturation phase. To deliver optimal results, 5G must work in conjunction with other emerging technologies, which requires greater flexibility and adaptability on the part of providers and a better understanding of market needs. As many companies also turn to private networks to support 5G applications, telcos need to reposition themselves as experts in digital transformation, offering bundled services that respond to changing business needs and create long-term value, not individually, but for all parties who will leverage them; in the context of the creation of business ecosystems”.