5G and IoT Offer Big Opportunities for Communication Service Providers (CSPs): Ericsson

A handful of the first 5G enabled smartphones are being released this year, signaling the start of a new era of faster data speeds, more reliable connections and significantly lower latency for many electronic devices.

The impact of 5G will be felt across a wide-reaching group of businesses and industries, creating entirely new sources of data and allowing it to be transmitted and analyzed with speed, accuracy and completeness that was simply not possible using previous generations of wireless communications technology.

The Swedish multinational telecom Ericsson has worked closely with many of the world’s leading communication service providers (CSPs) and recently released its “Realizing IoT Strategies” study, drawing on its planning, operational and strategic experience to examine the traditional strengths and weaknesses of CSPs and highlight how they are working to position themselves for the enormous opportunity that 5G technology represents.

To win share in this lucrative new frontier, CSPs will need to think beyond merely providing connectivity and capitalize on the continuously growing amounts of data at their disposal.

While much of the early 21st century has been dominated by advertising and social media companies like Google and Facebook, Ericsson believes CSPs like itself are in a uniquely strong position to challenge the data dominance of these organizations. CSPs have access to massive amounts of data ranging from geolocation, payments, network activity and demographics, in most cases across a significant portion of the countries or regions where they operate.

While these are valuable in their own right, 5G adoption and integration will add millions of data points from thousands of new IoT sensors on things like environmental conditions, logistics services, and road and pedestrian traffic that will be wholly or in part under the stewardship of CSPs around the globe.

Internet of Things (IoT) and blockchain

Such a flood of data has major implications for the future of the internet of things (IoT) in particular, according to Ericsson, as most existing applications of IoT have been focused on data generated and shared internally within an organization, used to improve maintenance schedules or automate chained manufacturing tasks.

Blockchain and other recent advancements have produced a nascent “data sharing” ecosystem where mutually beneficial data transparency has helped generate some additional efficiency across closely related groups of businesses, but CSPs are particularly well positioned to dominate the next evolution of data exchange, the study says.

Securely handling incredible amounts of data transmission has been the core competency of CSPs since their inception, but to maintain their relevance and continue to grow their business, Ericsson identifies ripe potential for CSPs to become the “data brokers” of the next decade and beyond.

To monetize this valuable resource, CSPs can already provide analytics on IoT primary use case data.

Substantial chunks of IoT data across a host of industries are already transmitted via cellular networks — and CSPs can parse this data as it is passing through their systems, allowing organizations to focus on their core business operations while still deriving insights and improvements from integrated IoT data without developing in-house capabilities to do so.

As more data sources come online, CSPs will have the opportunity to develop a data marketplace that works with data providers to validate, integrate and anonymize information on users and use cases that can then be sold to third parties for use in any number of applications.

For example, data on the number of customers served at a retail outlet could be aggregated within a geographical area to understand changing consumer preferences, combining information from a variety of outlets and types of customers to spot trends faster.

Transport and Logistics

Transport and logistics are two of the most promising applications for IoT and 5G integration identified by Ericsson as presenting significant opportunities for CSPs.

Providing embedded connectivity, fleet management and platforms for connected vehicles have already been undertaken by some service providers, but other key growth opportunities have also been identified by Ericsson.

Location-based marketing can use anonymized data aggregating users shopping habits, preferences and travel routines to serve special offers from nearby restaurants or businesses.

The increasing numbers of connected vehicles can contribute data to helping civil planners design better infrastructure and traffic flow, substantially reducing the time needed for initial analysis and advancing the potential for real-time traffic routing away from crashes or other impediments. (For more on this, Phil Goldstein takes a closer look at improving cities and traffic via IoT and connected vehicles for StateTech.)

Ericsson notes that leveraging the oceans of data will not come without challenges to CSPs.

Existing data-driven giants are always looking to increase their market share and provide many of the IoT services that CSPs would be wise to pursue, developing navigation tools and aggregating data for later sale in ways that bypass existing CSPs entirely.

The growing private space industry is increasingly launching satellites that provide alternatives means of communication and data sharing. And open standards built on blockchain technology are a serious threat to private data brokers.

M&A Activity

Ericsson notes that while many CSPs sometimes struggle with public perception and trust, they typically command considerable cash flow. As such, M&A activity, especially in the transport and logistics IoT verticals, is one of the most promising routes for providers to develop new sources of revenue while continuing to lead technical development of connectivity standards and service quality.

Ericsson also said that many CSPs have struggled to effectively integrate acquired entities in the past, indicating that businesses that are bought up may remain wholly owned subsidiaries with only limited integration to provide them with the technology and data they need to make them more effective in their existing markets.