3 Reasons 5G Will Kill Telecom

By Lanie Glittersparkle — Special to Daily Wireless News

 

If Mobile World Congress 2018 taught us anything it’s that telecom loves the idea of 5G’s future. But the industry is quickly realizing it has no idea how to get there. Because mobile operators are too often paralyzed by legacy tech and organizational inertia, 5G will be the ton of bricks that breaks their collective backs. Here are three reasons why 5G will kill the telecom industry:

Telecom doesn’t understand innovation anymore

In the digital era, innovation is a bottom-up process where bigger players expose a wealth of raw materials to new tech communities that drive waves of innovative services. May of those services may fail — which is kind of the idea — but the best rise to the top.

Innovators take on most of the risk and resource providers reap the benefits. Telecoms haven’t done this and when they’ve tried, they’ve mostly done it wrong. They still think in proprietary terms and want to push their own ideas about what’s innovative down on customers in a patriarchal, authoritarian fashion. It won’t work and when they spend the bucks to roll out 5G and try this approach, it will destroy them.

Telecom doesn’t understand B2B markets

Large enterprises have had little choice in the past other than to swallow the barely discounted, poorly supported consumer-version-in-a-bigger-box services mobile operators have offered them. As soon as they’ve been offered alternatives, enterprises have embraced them — which explains why AWS is doing so well. Since 5G is supposed to be about moving up the B2B value chain, getting away from race to the bottom price wars and generating premium revenue with more sophisticated services, telecoms will fail at it.

Not only don’t telecoms understand how to meet B2B customers’ actual demands for things like network-as-a-platform, they aren’t even organized to facilitate this type of service consumption. Telecoms think of vertical industries the same way they think of their networks — as disconnected silos.

The fact is, enterprises across verticals rely on each other. Just think of the endless dependencies across shipping, energy, manufacturing, banking and insurance. These industries are undergoing their own digital transformations with the aim of working together more efficiently, intelligently and with much greater end-to-end visibility – because it frees up cash for everyone.

Telecoms should be the catalysts in this process but instead they’ve been hurdles large enterprises have had to invent ways to work around. Chances are good that when telecoms finally roll out 5G, no one will care. The coffers will run dry and the 5G party will be over before it starts.

Telecom’s digital transformation is a pipe dream

Because telecoms don’t understand how digital innovation works or how to catalyze enterprise customers’ digital initiatives, their own goal of going digital to bring services to market faster, compete for a bigger chunk of the value-added services market and deliver game-changing customer experiences is a fool’s errand.

It’s time for the telecom industry to be honest with itself.

Telecoms understand speeds and feeds. They understand slow-rolled standards and over-engineered specs. But they don’t understand rapid time to market, digital customer experience or ecosystems, much less personalization, AI, AR or VR.

And they really don’t understand vertical industry expertise, which is obvious every time you show up at a telecom event’s panel on telemedicine, for example, there’s no one from biotech, pharma or healthcare in the room.

As telecoms obsess over a 5G future they can’t deliver, they’ll implode. The smart ones that focus on providing the best and fastest dumb pipes might win, because that’s what telecoms are good at (though they still have to align with digital consumption models to be relevant to enterprises). The rest will burn themselves out chasing this imaginary 5G future that doesn’t even make for cool MWC exhibits anymore.

 

About the author: Obviously, Lainey Glittersparkle is a pen name. But behind the cheeky nom de plume is an unfiltered take from an expert with decades of experience at the highest levels of telecom.

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