How 5G Is Reshaping the Telco Industry and Its Impact on Customer Retention

By Jess Warrington

Jess Warrington

When it comes to 5G, you think of faster and more — more information, faster, and more applications, faster. The new standard in mobile wireless networking brings improved internet connectivity in a digital-first world. The capabilities of 5G have opened opportunities for the telco industry to serve customers closer to the edge of the network with more solutions.

Across sectors from medicine to the metaverse, telcos can help businesses do more because of the speed, low latency and reliability of 5G networks. Increased enterprise opportunities could mean more than $13 trillion in global economic value by 2035, generating more than 22 million jobs.

This article will focus on how 5G is opening capabilities for telcos as well as the businesses they serve.

Focusing On Customer Retention

With market saturation and a high average churn rate, telcos have been under increased pressure over the past decade to reinvent themselves as digital service providers (registration required). Customers are looking for a unified digital experience from a single trusted provider who can offer services and products in a one-stop shop. This is opening an opportunity for providers to complement core services with digital services.

Telcos are no longer selling just phones and services, they’re partnering with media companies such as Netflix, Sky Sports and other entertainment platforms to offer connectivity and entertainment bundles. For example, a T-Mobile customer can get mobile service, along with subscriptions to streaming services for shows and music, on one bill. This type of convenience and simplicity makes it less likely that the customer will switch companies. The situation is similar for business customers.

Since telcos are already service providers for connectivity and other core services, they can bundle even more services on top. It entails catalog expansion, global marketplaces and anything-as-a-service (XaaS) bundle management.

Telcos are offering a new catalog of digital solutions based on cybersecurity, productivity, resources from public and private clouds, collaboration, and unified communications and business support solutions. This evolution enables telcos to compete to be the provider of choice for solutions such as software-as-a-service (SaaS), security-as-a-service (SECaaS) and infrastructure-as-a-service (IaaS).

By offering these bundles, telcos can help simplify their customers’ operations while increasing average revenue per user (ARPU) and reducing churn. The more deeply telcos get into complex automation, the more personalization they’ll be able to offer through the automated deployment of packages, such as a workplace-as-a-service (WaaS). The increased bandwidth of 5G has also supported the growth of remote work, as workers can accomplish more tasks they couldn’t take on with lower bandwidth.

High-Speed Digital Marketplaces

Many telcos are looking to partner with cloud platform providers to capitalize on infrastructure and scale. These partnerships are increasingly popular because managing an expanded portfolio manually drains time and increases costs as every vendor requires a dedicated integration, while every subscription model is different.

A global cloud marketplace platform enables telcos to expand their reach as they provide business customers with a self-service storefront. Telcos can grow their own services and offer more third-party collaboration as they sell, cross-sell and up-sell service solutions. And with 5G, they can do it faster. It’s essential for telcos to create a simplified system through end-to-end automation of ordering fulfillment and billing of subscriptions.

Telcos On the Edge

Telcos will be able to meet customer expectations more effectively and efficiently with the power of 5G. Telcos’ future success as IT services providers ultimately depends on their ability to move from simple connectivity providers to first-choice business solutions enablers.

Combining the computing power of the cloud and 5G connectivity with intelligent devices at the edge of the network is creating a framework for …

… building impactful business solutions. Telcos are focused on maximizing the opportunity of 5G investments and accelerating time-to-revenue with business customers. One example is the partnership between Nokia and a 5G-connected microbrewery at the University of Technology Sydney (UTS). Students are utilizing a cloud-based digital twin of an actual brewery as they perfect the brewing process.

Investing In the Future

With 5G, telcos can take advantage of three distinct markets faster — cybersecurity, cloud services, and the internet of things (IoT). Telcos aiming to thrive in these markets have used a two-pronged approach of freeing up cash, then re-investing those funds into low-latency infrastructure (fiber optic network and 5G) and cloud services companies. For example, Verizon sold off its media properties and focused instead on its wireless networks and other internet provider businesses.

Faster internet means easing the bottlenecks and buffering you may experience from time to time. The amount of bandwidth and the speed of that bandwidth grows exponentially. Adoption of 5G is still a work in progress, however. In 2021 we saw an additional 72 million 5G connections in North America — a gain of 292% year over year. Telcos must strive to create applications that consumers and businesses want.

5G is opening a new world of possibility for smart solutions, IoT solutions, private networks and connectivity. Private networks are powering different smart solutions such as vehicle traffic management, public internet and smart airports. These types of initiatives demand bundled solutions that include connectivity, access to network components with configuration and setup services included, such as software-defined wide area network (SD-WAN) solutions.

These services may be bundled together and offered as a recurring subscription, providing telco business customers access to sophisticated network offerings in an affordable format that is aligned with the new way of consuming services. By creating these kinds of bundles, telcos are making full use of their networks, monetizing investments in 5G infrastructure, and creating an environment of efficiency that leads to greater sustainability.

Ultimately, the aim of 5G is to bring the agility, scalability and efficiency of the cloud to telcos. Those communication networks with little cloud experience will likely need help developing their 5G cloud strategies. As 5G rollouts expand, telcos are looking toward cloud computing to help them expand their catalogs, offer a wide range of third-party solutions, end-to-end automation and bundled offerings.

According to Deloitte, as 5G reshapes the telco industry and telcos expand their offerings as digital service providers, enterprises can begin exploring a broader range of leading-edge applications such as artificial intelligence (AI). This may include everything from precision robotics to AI-driven security, quality control and predictive maintenance systems. For business customers, this means on-demand cloud services and tools will perform at a higher level with 5G.

Just how much of an impact 5G will have on communications and business overall remains to be seen. But there’s little doubt that 5G activity will continue to grow and transform the way businesses connect and function internally and in the marketplace. As telcos reinvent themselves as digital service providers, they’ve unlocked opportunities to provide various solutions and services to their customers at faster speeds, with lower latency and higher bandwidth because of 5G.

Jess Warrington is general manager and leads CloudBlue’s sales and presales team in North America. He also is responsible for CloudBlue’s overall go-to-market strategy in the region. CloudBlue helps service providers scale in the digital economy with a technology solution that automates an end-to-end digital supply chain and enables cross-connecting ecosystems. You may follow him on LinkedIn or @ThisIsCloudBlue on Twitter.