According to a recent analysis from Finnish gear vendor Nokia, telcos are severely underprepared to profit from 5G.
The company studied 100 CSPs worldwide and discovered that the majority do not have appropriate BSS systems in place to properly monetize 5G. Given that Nokia has a vested interest in convincing telecom operators that they need to buy more 5G equipment, you could be forgiven for skipping over this headline finding. However, a closer examination of the vendor’s survey findings reveals that, despite some cleverly phrased questions, there is a problem here.
Only 11% of CSPs have the necessary BSS capability for 5G-enabled business models, including monetization tools.
To be sure, we don’t know how prepared or otherwise the 89 percent who stated they plan to modernize their BSS are, but that’s still a sizable amount.
Similarly, 98 percent of respondents claimed they will need to change their BSS in the coming years in order to implement modern monetization techniques. According to Nokia, this shows that carriers recognize the importance of having 5G-ready monetization systems and the need to invest in this sector. However, one could argue that only 2% of telcos are properly prepared to take advantage of 5G.
Meanwhile, 70% of CSPs are considering placing monetization systems on the public cloud in order to better their ability to respond to and satisfy the needs of their consumers. These estimates could be argued to be higher; after all, most telecoms are considering real-time pricing, for example. However, the phrasing of the poll could be a factor here as well. On the question of cloud monetization, respondents were actually replying to the phrase ‘deploying BSS via the public cloud is a viable alternative for us,’ rather than commenting on the technology’s merits.
Nonetheless, it is concerning that so many believe cloud-based BSS is not a feasible option for them, particularly in Europe, where only 57% of respondents are considering cloud-native monetization systems.
Without sophisticated monetization mechanisms, telcos would struggle to reap all of the financial rewards that 5G has promised for many years. Delivering new services, such as those requiring network slicing, sooner and at scale would be critical for telcos seeking faster returns on those pricey 5G network expenses. And they’ll need the gear to do it.
“To unlock 5G revenues and move beyond the traditional data plan model, a major shift among CSPs is required toward adaptable monetization systems that utilize cloud-native, scalable, and flexible infrastructure, as well as open APIs for easy integration and deployment; and I believe this survey highlights the work that remains to be done,” said Hamdy Farid, Senior Vice President, Business Applications at Nokia, in a statement accompanying the survey results.
We don’t have to take Nokia’s word for it.
“Most Service Providers are ill-prepared to properly engage and monetize future 5G-enabled use cases and must urgently modernize their BSS,” said Analysys Mason’s John Abraham, Principal Analyst. “With Service Providers trying to earn that ROI on 5G, now is the moment for them to invest in flexible monetization solutions, especially as 5G brings the importance of real-time charging capabilities to the forefront,” he added.
That message is clear: operators risk missing out on additional 5G streams that might justify the expense of licenses and infrastructure. Unless they believe they can raise their bottom lines only through data plans – hint: they can’t – operators must act.