Telcos must be careful about overlaps in their 5G enterprise offerings
AS TELCOS start to unveil 5G service offerings to customers and investors, sceptics burned by the 4G market experience - where players all sold the same basic connectivity and ended up competing on price - may question how the industry can meaningfully differentiate their 5G products.
Even as players stress that innovation will be the name of the game, telcos worldwide have largely cited and tested similar uses for 5G: cloud gaming, smart manufacturing and logistics, telehealth consultations, or industrial drones and robotics.
Still, there are signs that Singapore operators have been giving some thought to how they can stand out. Investors should take the opportunity to scrutinise their plans.
Seeking partnerships
The three main 5G licensees have already volunteered some information on their plans - with some degree of convergence in 5G applications.
StarHub chief executive Nikhil Eapen told The Business Times that facilities management is one of his "first-order priorities" for enterprise 5G. Meanwhile, responding to a question from BT at a recent event, Singtel management named a smart city tie-up with Surbana Jurong among the possible uses for 5G it is exploring.
Not to be left out, M1 last month deployed a 5G-enabled "suite of intelligent solutions", including surveillance and customer service robots, at parent Keppel Corp's Keppel Bay.
Advanced manufacturing is another popular field. Singtel in 2019 inked an agreement to roll out 5G at the Agency for Science, Technology and Research's Advanced Remanufacturing and Technology Centre, which houses a model factory. M1 has teamed up with IBM and Samsung to open a 5G-driven studio that can build and test Industry 4.0 solutions.
With similar industry verticals identified, differentiation will likely come down to finer points in execution, as telcos will be selective in their partners - even in the same sectors.
Joongshik Wang, Asean technology, media and entertainment, and telecommunications leader at professional services firm EY, said "it is unlikely that telcos will all converge and compete on all fronts", since telcos would distinguish 5G offerings based on - among other things - the structure of their ecosystem tie-ups.
Indeed, telcos are not expected to go it alone in developing end-to-end 5G industry solutions for enterprises. Rather, they will likely have to draw on the expertise of other participants in the telecoms ecosystem.
BT reported last month that industry watchers expect some telcos to tap "B2B2X" tie-ups with solutions providers to monetise 5G networks.
Alexander Brock, senior vice-president of technology strategy, innovation and partnerships at Canadian telco Rogers, put it best in a comment to the MIT Technology Review last year: "We are not going to be the experts in every vertical - what we need is to be experts in having an exposed set of capabilities to allow those verticals to plug into us."
Singtel, for one, is clearly headed in that direction, as the telco touts the applications of its 5G-ready multi-access edge computing platform.
Veteran industry watcher Tony May previously told BT that other options for telcos to monetise their 5G networks might include positioning themselves as wholesalers or infrastructure providers, or targeting low-cost digital consumer services.
But, to capitalise on the enterprise segment, he still thinks telcos should "be thinking about your role as that horizontal enabling platform that will ultimately enable multiple solutions for multiple vertical use cases".
"You could imagine telcos who've built this platform going to a vertical solution provider and saying: 'Look, I can make your solution really competitive in the Singapore market, but we'll do it as a partnership and we'll get a revenue share,'" said Mr May, telecommunications partner at Bain.
Setting priorities
As they strike up partnerships and work out their unique selling points, telcos must have a clear focus to win.
EY's Mr Wang said telcos "will need to prioritise industries with the highest potential for their returns on investment", even with the backing of ecosystem partners.
And according to Mark Newman, chief analyst at telecom industry group TM Forum, "even the world's largest B2B (business-to-business) telecoms operators are discovering that they may be able to serve only a few verticals with end-to-end ICT (infocomm technology) solutions".
But how will Singapore telcos pick the best industries to get that bang for their buck? The answer may lie in their corporate structure, existing customer portfolios, and track records.
For example, M1 has taken part in a testbed for automated guided vehicles and automated cranes at Pasir Panjang Terminal in 2019, while its Keppel Bay project involves automated detection of unauthorised vessels in the marina.
It would be a logical extension for M1 to lean into parent company Keppel's extensive maritime background for more 5G uses, on top of the potential urban development synergies with sister entity Keppel Land.
Meanwhile, Mr Eapen told BT that he wants StarHub's enterprise arm to be "more cloudy". With StarHub eyeing digital workspaces and remote device management as potential 5G enterprise services, it could find a natural fit in controlling shareholder ST Telemedia's investment portfolio, which is heavy on cloud-based infrastructure technology companies.
Retail consumers are likely expecting broadly the same types of 5G-enabled services - such as cloud gaming - from all telcos, despite Mr Wang's warning that operators still need to be "more innovative to differentiate their offerings amid intense competition" in the consumer space.
As such, Singapore telcos will have to play strategically on the enterprise front to reap maximum benefits from their costly investments in 5G. With standalone networks still in the rollout stage, telcos must spend these pre-launch months deciding what exactly makes each of them special.
