MWC Barcelona is a time for excitement as the telecommunications industry showcases new successes and technologies. It’s also a time for problem solving, as industry players meet to discuss hard questions and economic challenges.
MWC23 had no shortage of challenges to tackle. Security concerns have communications service providers (CSPs) taking measured steps on new processes and technologies, like Open APIs and Open RAN. 5G standalone deployments have been slower than planned, and so has the consumer uptake of 5G network services. While the metaverse remains the destination, the journey to get there will take longer than CSPs anticipated.
Do these obstacles mean CSPs should resign themselves to slow growth? No—many of the business challenges discussed at MWC23 have solutions. Along those lines, here are the most significant observations from the show that will influence 5G monetization and customer experience (CX) throughout 2023.
1. Telcos Are Sold on Strategic Vendor Partnerships: Now What?
CSPs have been reluctant to partner with hyperscalers like Microsoft and AWS—their competition in many respects. But these strategic partnerships are necessary for CSPs to offer the rich portfolio of 5G-enabled digital services that enterprises want, like those harnessing edge computing.
The concept of coopetition isn’t new—analysts (and we at CSG) have been encouraging it for years. What we saw at MWC23 is that CSPs are making strides with strategic partnerships, showing a new comfort level after having taken a step back to re-evaluate their approach to cloud service providers and other vendors. CSPs are as ready as they’ve ever been, strategically, to engage in the co-creation necessary to innovate powerful use cases tailored to industries from healthcare to energy to automotive.
But are CSPs operationally ready? They know the “why” of strategic partnerships. The “how” is another matter. How do they build, launch and monetize these co-created offerings? Do they have a programmable, open standards-based architecture where partners and enterprise customers can easily participate? Fortunately, these are challenges that have solutions.
2. The Metaverse: There’s Work To Do
The metaverse got ample stage time at MWC Barcelona, including a keynote and dozens of other sessions that touched on the topic. Interestingly, much of the talk centered on the obstacles slowing down the development of these hyper-connected worlds. Meanwhile, news that Meta has started shifting resources from metaverse projects to AI seems to indicate that metaverse development is undergoing a regroup.
CSPs are years out from monetizing metaverse consumer use cases like fully immersive gaming, shopping and live events, or industrial use cases like virtual training for employees. However, the metaverse remains a game-changing opportunity for the network operators who would enable it, according to analysts. IDC predicts that by 2027, the metaverse will account for 70% of annual internet media traffic growth (including consumer and business use cases).
CSPs that aspire to enable the metaverse are realizing that they must first harness the power of 5G, particularly B2B2X business models. The work they’re doing to leverage network slicing, edge computing and ultra-low latency connectivity, among other capabilities, are all on the to-do list for realizing and monetizing the metaverse.
3. What Customers Want: Secure and Seamless Experiences
MWC23’s discussions weren’t just aspirational talk of the metaverse and digital transformation. Speakers dug in on plenty of CSPs’ here-and-now concerns—particularly security. How do CSPs manage the ever-growing threats of cyberattacks and maintain security standards as they evolve their network architecture and rely on Open APIs? In a GSMA survey released before MWC23, 72% of CSP respondents rated end-user security as very-to-extremely important to their network transformation strategy (second only to sustainability). Whether they’re leveraging interchangeable components of Open RAN networks or offering network slices to enterprise customers, CSPs need to ensure the growing litany of moving parts won’t increase the vulnerability of their networks.
Another immediate priority for CSPs was customer experience (CX). An IDC survey found that improving CX and reducing churn was the second-most cited goal of CSPs’ digital transformation initiatives (next to speeding up operational agility and time to market). For years, CX has been the difference-maker in the B2C segment as network services for consumers became commoditized. However, we’re seeing customer experience gain importance in the B2B and B2B2X market as well. For CSPs to lead the enterprise space, they need to make it easy for their enterprise customers to configure, price and quote digital services, as well as for their partners to co-create these services.
CSPs are finding ways to tackle challenges where end-user security and experience intertwine by framing them as trust initiatives. We highlight this trend in this year’s “State of the Customer Experience Report.”
4. 5G and Ecosystems: Where Are the Use Cases?
Analysts are surprised 5G hasn’t seen stronger adoption since MWC 2022, and CSPs are hoping for more monetizable use cases in 2024.
One B2C use case, however—5G fixed wireless access (FWA)—was a hot topic at the show for its early success. IDC has named 5G FWA (and eMBB) a top monetization opportunity for CSPs. Because 5G FWA’s speeds can compete with wired broadband connections, research firms are citing it as a viable alternative CSPs can offer cable customers.
With B2B and B2B2X, however, the search for a 5G killer app continues. CSPs showcased their progress with network slicing and offering private 5G networks to enterprises (particularly in manufacturing). It’s fertile ground—half of all enterprises are considering corporate 5G contracts, according to an IDC survey. But CSPs must convince their enterprise customers that 5G is a better alternative to WiFi 6 or to building their own networks. Other CSPs presented extended reality (XR) and augmented reality (AR) use cases. These included digital twin retail stores where digital avatars of customer service employees can assist shoppers who are browsing a brick-and-mortar shop.
Even with the excitement surrounding these enterprise use cases, MWC Barcelona reinforced the idea that CSPs need the capability to build a diverse array of business models to fully capitalize on their 5G network investments. Specifically, their networks and BSS stacks must allow them to pivot to new use cases when the opportunity for them arises.
Unsure What To Do Next?
It’s time to turn the inspiration from MWC23 into action—and help your business capitalize on 5G investments. You can talk to a CSG expert today on what to do next. If you’re looking for more insights on 5G monetization, check out the IDC Infobrief “Lead or Lose: Imperatives to Realize the Digital Service Provider,” which you can download here for free.
