The blending of 5G, edge computing, and artificial intelligence (AI) provides a potent opportunity for CSPs to create much-needed new revenue streams. This blend already provides a unique foundation to support new groundbreaking use cases in almost every industry, from manufacturing and automotive to healthcare and agriculture (see figure 1 below). The advent of 5G brings much more to the table than just increasing speed and throughput. In addition to enhancing mobile broadband (eMBB) for higher data rates across wider areas, it will empower massive machine-type communications (mMTC) to support internet of things (IoT) services being adopted en masse across many industry verticals. Plus, it will offer ultra-reliable low-latency communications (URLLC) for mission-critical applications.

Teaming up: Edge computing and 5G
But 5G is only one of whole a set of technologies coming together to kick off a new chapter in the history of telecommunications. Another essential is edge computing, including multi-access edge computing (MEC).

Without edge computing, 5G applications and services will rely upon connecting through the core network to centralized cloud resources for storage and computing, the massive use of bandwidth would mean losing much of the positive impact of 5G’s latency reduction. The reduced network congestion and latency edge computing offers is crucial for latency-critical applications dependent on continuous corrective actions.

Of the CSP executives surveyed by IBM, 56% reported they are already planning for, or experimenting with, edge computing. For example, AT&T has been testing edge computing in a retail environment, connecting 6-foot-tall retail robots to 5G and the edge. Among all CSP executives interviewed, 94% expect edge computing to have a positive impact on operational responsiveness within five years followed by lower operational costs, automated workflows, faster decision-making, and lower data-processing latency (see Figure 2 below).

Ramping up AI in 5G networks
Industry digitalization, the increasing number of connected devices, and the demand for immersive experiences will require more and more processing power at the edge of networks. Gartner predicts that by 2022, more than half of enterprise-generated data will be created and processed outside of data centers, and that by 2025 about 75% of data will be analysed and acted upon at the edge.

AI has become the key driver for the adoption of edge computing. Edge computing brings AI closer to where the data is created and where actions need to be taken. AI can process large amounts of data in short periods and provide the insights to drive quick, local, data-informed decision making. Locating AI close to the edge is crucial for applications where near-real-time feedback and optimization are a priority for applications such as machine control, equipment monitoring, and remote surgery.

Uncertainties remain
It is expected that 5G will reinvent entire industries, but this ‘revolutionary’ aspect of 5G remains beyond the near-term horizon. Though the technology strategy is fairly mature, it will still take years to migrate to the type of 5G environment necessary such a transformation. It all depends on having a cloud-native 5G core network, leveraging extensive network virtualization, and implementing AI-based automation. Most CSPs are still in the early phases of developing this envisioned ubiquitous 5G network infrastructure. A significant amount of work remains in standards, regulations, and, in particular, operational and business support systems.

Uncertainty about business cases and the expected return on investment is also delaying full-scale 5G deployment. Confidence in the technology is high, but the uncertainties around the strength of the business cases and the underlying economics make many CSPs hesitant to go full speed ahead with 5G investments. After all, CSPs are also dealing with risks such as increased competition, fast arrival of new technologies, changing regulations and access to finance.

Preparing for the true transformational power of 5G
For CSPs, the real prize of 5G is in addressing enterprise needs. The most advanced 5G use cases –and those that offer the greatest revenue growth opportunities for CSPs – are found in the enterprise and industrial markets. In particular, 5G holds the potential to become the foundation for many new industrial applications and to support entirely new use cases not possible with current networks.

In industrial IoT, 5G is the crucial element in the industry 4.0 evolution toward increasingly smarter and more dynamic manufacturing. The concept of 5G with network slicing and edge computing in an industry 4.0 environment is already being evaluated by some CSPs – by Vodafone, for instance – for the German electric microcar company e.GO Mobile AG at its Aachen complex.

It will still take several years before we begin to see a significant uptake of 5G in the industry verticals. But for CSPs to thrive in a 5G enterprise world and reap the benefits from 5G, network slicing, edge computing, and AI, they should do the following:

Prepare for the revolutionary part of 5G
Drive network virtualization, cloudification and cognitive automation to support advanced 5G services.
Invest in related technologies such as network slicing, edge computing, and AI.
Focus on updating or replacing operational and business support systems, essential to the management and monetization of new sophisticated 5G services.
Explore new business models for generating entirely new enterprise revenue streams.
Consider specialization

Arguably, a single CSP can’t be all things to all customers and all industries. Therefore, focus on certain verticals, or offer horizontal capabilities, such as augmented reality (AR) and virtual reality (VR), deployable in multiple verticals.
Make sure you have the right knowledge and skills through acquisitions or partnerships with specialists or specialized companies.
Build an ecosystem of innovation partners that add value to the core connectivity, explore new opportunities, and help expand the addressable market.

Create the ability to rapidly prototype solutions

Make comprehensive test environments available to rapidly prototype solutions for and with enterprise customers.
Develop tools to effectively examine the operational aspects of new solutions with your enterprise customers.
Be flexible and quick to work closely with both your customers and solution partners, especially in the feasibility and prototyping phases.

It is key for CSPs to do things differently from the past and to focus on the fundamental changes needed to optimally benefit from the 5G revolution. Specifically, they should provide their customers with capabilities and intelligence that address their pain points and help them create business value in a 5G world. Effective partnering in ecosystems is crucial.