Multinational professional services firm EY, which has an office in Luxembourg, has announced the publication of its survey on 5G investment entitled "Maximizing the 5G opportunity for enterprise".
According to the study, 5G investment set to soar and yet more than half of enterprises lack the confidence to implement. Indeed, while 15% of enterprises are currently investing in 5G (rising to 69% within three years), 52% are not confident in their organisation’s ability to transition to 5G-based Internet of things (IoT). Moreover, 74% indicated that they need to overhaul the operating model to realise implementation.
The EY study found that most enterprises (74%) believe 5G will enter the fabric of their business over the next five years. However, of those investing in 5G 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 cited integration with existing technologies as the biggest internal barrier to 5G adoption (37%), while the perceived immaturity of 5G technology topped the list of external challenges (35%).
Gaël Denis, Partner, Telecommunications Leader at EY Luxembourg, commented: “Enterprises are aware that 5G can fundamentally reshape their organisations. 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 revealed that forming the right partnerships could be the key to unlocking 5G potential. 79% of respondents believed they require external support to generate robust 5G use cases, while 77% said they will prioritise vendors that can deliver 5G business outcomes as partners rather than offering pure cost benefits. Notably, 60% indicated that their organisation is currently struggling to identify the right 5G vendor and 67% said their vendor interactions to date have largely been transactional and tactical.
Gabriel De Maigret, Partner, 5G specialist at EY Luxembourg, added: “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 5G 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 twelve months, compared with 43% in Asia-Pacific and 38% in Europe.
Ajay Bali, Associate Partner, Digital Advisory Services, stated: “5G is a fundamental change impacting Telecoms to reinvent as a partner, not just a utility provider. It also offers a unique opportunity for convergence for many sectors to come together to offer new products and services to end-user in a seamless manner. Over the new next few years, we will see many new collaborative business models across industries and further enabling Digital transformation”.
The energy (23%) and technology (22%) industries are currently 5G investment leaders, with health care (61%) and financial services (58%) organisations projected to emerge as the biggest investors within three years, according to the study.
For the purposes of this study, EY surveyed more than 1,000 enterprises globally on the 5G opportunity. The full results are available at https://assets.ey.com/content/dam/ey-sites/ey-com/en_lu/topics/technology-media-entertainment-telecommunications/maximizing-the-5g-opportunity-for-enterprise.pdf.