Is 5G a calling for telco CIOs?

CIOs will play a vital role in delivering savings and changing operational methods as telcos roll out 5G and need capex for the infrastructure investment.

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On October 13th, 2020, Apple announced the iPhone 12; a device built intentionally for 5G networks. Business technology leaders in the telecommunications sector face major challenges, but also opportunities to change the way their businesses operate as 5G becomes the latest network standard. 

Pre-pandemic, technology analyst house Gartner predicted that globally, 5G network infrastructure revenue would reach $4.2 billion in 2020. The pandemic may have delayed infrastructure rollout and therefore the revenues, but demand for increased connectivity and capacity has a habit of returning to health pretty quickly.

With 5G expected to make smart cities, factories, transport and agriculture a reality, along with remote healthcare, the pandemic will, in all likelihood, accelerate these technology megatrends. As IDG Connect recently detailed, remote care is growing across the world; and before the pandemic, the western world was struggling with productivity and considered these technologies as a solution, the supply chain shortfalls of 2020 will increase smart innovation and investment, observers believe.

"Financial services, gaming and gambling are looking at how low-latency technology can deliver new micro-services," says David Doherty, an experienced telecoms sector CIO who has led technology at the likes of NTL, Easynet, Gamma and regulatory body Ofcom.  Not only will telecom operators benefit from the adoption of 5G, in France, the state has received €2.8 billion in revenues from the sale of 5G spectrum.

"We can sense the demand in the market," says Geert Standaert, CTO at Proximus, a telecommunications provider in Belgium. "Companies want to use 5G to speed up their digital transformation. We already have various test projects running with customers, where we are using test frequencies. Generally speaking, there is little doubt about the potential success of 5G. You just have to look at the growth in the use of mobile data. It is a thousand times higher today than 10 years ago.This trend is set to continue. Video resolution, for example, keeps increasing."

The challenge for telecoms operators, and therefore their CIOs and CTOs, is that the customer demands greater capacity and services, but is rarely willing to pay more.  In a research note, advisory business McKinsey stated: "Each generation of technology opens new opportunities for telecommunications players. But when 4G launched in 2009, mobile operators didn't see the great returns they'd captured with earlier generations. Despite their investments in 4G infrastructure, revenues showed flat or tepid growth. In a few regions, including Europe and Latin America, revenues even dropped after 4G's introduction."

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