5g

3 strategies for digital service providers to monetize 5G

5G is more than just the latest iteration of the mobile wireless network. It’s an industry game-changer. Digital service providers (DSPs) that embrace 5G wholeheartedly can expect to unlock additional revenue streams of up to 35 percent by 2030, according to 2019 industry research from Ericsson. The reality is that 5G is a fundamentally different product, with powerful features and functionalities that simply did not exist or were not nearly as advanced as in prior iterations of mobile wireless networks. Among other things, 5G will enable massive IoT (Internet of Things) density, as well as dynamic resource allocation to enable a broad spectrum of wireless applications and IoT connections. 

As a result of 5G’s advanced capabilities, DSPs have an unprecedented opportunity to expand the services and products they market to customers. DSPs also have an opportunity to fundamentally rethink their buyer journeys and use cases—across B2B, B2C, and B2B2X, as well as across multiple industry verticals. Let’s explore three essential strategies that DSPs should be deploying in the near term to monetize 5G:

 

Logically divide shared network infrastructure based on network attributes

With older generations of wireless networks, DSPs’ traditional role has mostly been to offer a single, consistent network experience to all customers. 5G is flipping this paradigm on its head. With 5G, DSPs can endlessly customize their network experience to optimally and uniquely serve different types of customers. Specifically, DSPs should be customizing the 5G network experience based on the customers’ preferred data rate, latency, and availability. That means a broad menu of different configuration options should be offered to optimally meet customers’ unique needs. For example, households that stream disproportionately large amounts of video content should have the option to pay more for a high-speed >1 Gbps data rate, while a company whose business model depends on time-critical transactions should have the option to pay more to get > 1 ms latency and 99.999 percent availability.

 

Offer self-optimizing subscription options

In the fast-changing business world, as well as in people’s personal lives, mobile network usage can vary dramatically for individual customers from month to month, and even from day to day. With older generations of mobile networks, DSPs have traditionally defaulted to imposing hefty fees for exceeding SLAs—a customer-unfriendly practice for DSPs that can now be readily solved with 5G. DSPs can and should start offering self-optimizing 5G subscriptions, where each customer’s 5G plan and/or set of enabled features automatically and dynamically changes based on the customer’s unique 5G usage patterns. For example, if a car manufacturer wants to target both middle- and upper-income customers in marketing a connected car solution, the manufacturer might want to market the connected solution for mid-priced car buyers as offering safety and efficiency features only, while luxury car buyers might be offered entertainment and information features as well. In this scenario, all drivers will retain the flexibility to tap into the full range of their car’s connected features, regardless of the car’s sticker price, and these customers’ subscription plans will be auto-adjusted for the specific connected features that they are or aren’t using in a given month.

 

Forge mutually beneficial partnerships with third parties

5G gives DSPs more options than ever before for partnering with other companies to market products and services. DSPs should take full advantage of these new opportunities to forge mutually beneficial partnerships with these third-party companies. For example, if an over-the-top (OTT) provider has a vested interest in guaranteeing a high-quality, no-buffering experience for customers that are streaming ultra-high-definition video content, the DSP could guarantee this experience for these specific customers (i.e., by tapping into 5G’s inherent ability to customize the network experience for individual customer types). In exchange, the DSP could receive a commission from the OTT provider for every customer who takes advantage of this 5G service guarantee. Similarly, if a gaming company is trying to market high-end interactive VR that requires a top-tier 5G data rate, a DSP could partner with the gaming company and begin marketing this VR technology to the DSP’s own customers; under this partnership, the gaming company might have a profit-sharing arrangement with the DSP for every VR headset that the DSP sells.

Monetizing 5G effectively requires upfront thinking, planning, and strategy by DSPs. But the benefits are well worth the investment. When a DSP logically divides its network infrastructure based on customer attributes, and when a DSP offers self-optimizing subscription options and forges mutually beneficial partnerships with third parties, the DSP can expect to see new revenue streams optimized. Meanwhile, the DSP’s long-term product design and development costs will go down, as will the time-to-market for these products.

Infosys and Simplus specialize in helping DSPs develop revenue optimization models for the 5G age. To learn more about how we can help you conceptualize new use cases for your 5G products and implement a 5G service modeling approach that uses an industry-standard framework, please reach out to us today. We’ll be glad to help you ride the 5G wave to maximum profitability.

 

 

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