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Basic and Differentiated 5G Connectivity for Enterprises

One of the 5G differentiators that has been touted for a long time is its ability to offer different QoS to each user and each slice. In practice we have yet to see this granularity in the commercial networks as this requires Standalone 5G networks that are yet to roll out. This has not discouraged any operator or vendor in producing any concept videos to prepare the end users that change is coming.
I have talked about 5G consumer uses cases here, 5G enterprise use cases here and looked at real life enterprise 5G use cases in China here. The 5G Guide produced by GSMA talks about how operators will be able start offering differentiated 5G Connectivity for enterprises as opposed to basic connectivity. There is also the option to offer 'Beyond Connectivity' and 'Managed Solutions'. While in this post, I want to really only look at Basic vs Differentiated connectivity, I will look at the other two as well for completion.

The following is from 'The 5G Guide':

While operators are primarily purveyors of connectivity products, they can offer enterprises four different offerings positioned around the core connectivity offering as shown in Figure 3.7.1. Basic Connectivity
Operators should seeks ways to capture incremental value from basic connectivity 

Operators will continue to offer basic connectivity to enterprises in the 5G era using the core eMBB proposition or, for fixed/mobile operators, fixed broadband offerings. This is generally a strong business for operators and can be quite profitable in areas with unique infrastructure. With the growth in IoT services, operators have the opportunity to cultivate the market for billions more IoT connections.

However, whether as the default option or as a backup, connectivity is largely commoditised and the basic connectivity offering for enterprises is largely undistinguishable from the consumer proposition. This lack of distinction muddles efforts to segment the market appropriately, resulting in many SMEs being served as if they are residential customers (i.e. faux consumers).

In the 5G era, operators should step up efforts to capture incremental value from basic connectivity. This could come through special SLAs (differentiated connectivity) or by bundling additional services (beyond connectivity). Differentiated Connectivity
Operators can better monetise connectivity using a bespoke or customised connectivity offering

Both fixed and mobile operators have, since the early 1970s, sought to offer differentiated connectivity to enterprise customers. With this, operators seek to offer different quality-of-service (QoS) to different customers at different price levels.

Table 3.7.1 (below) provides a brief review of 15 differentiated connectivity capabilities that have been introduced in the telecoms industry since 1974. Several of these capabilities (e.g. Leased Lines, ATM) have been productised and marketed to enterprises for several years. However, there have also been historical challenges in selling differentiated connectivity.

This context will shape the introduction of network slicing and other 5G differentiated connectivity offerings. Given that enterprises already indicate their lack of clarity on the 5G proposition, operators need to be clear that they are solving a specific business need for a customer instead of pushing network slicing as a technology. Beyond Connectivity
Operators will develop new solutions, sell more third-party products/services/solutions and develop platforms for APIs

Operators already offer several non-connectivity products and services to enterprises and these will grow in the 5G era. Many of these propositions are complementary to connectivity (e.g. devices, cloud/backup storage, security) while some are supplementary to connectivity (e.g. IT support, business apps, web hosting).

In the 5G era operators will extend their beyond connectivity propositions in three additional ways. Firstly, they will leverage their deep knowledge about the needs and behavior of the customer, plus management of the network infrastructure to develop new products and services.

Secondly, they will deepen their role as resellers of non-operator products and services (e.g. insurance, fraud detection, business productivity software [e.g. Office 360, Salesforce]). Importantly too, and as was evident in the enterprise engagement, the SME market will welcome operators providing end-to-end services. These businesses have limited budgets and will opt for plug-and-play products from operators that can simplify their tasks.

Thirdly, in a push to expand their role in the value chain, operators will develop platforms/market exchanges to commercialise network APIs and platform enablers. This is one of the main lessons from the enterprise engagement, highlighting the need for operators to develop horizontal enablers that can be used to serve customers in different industry verticals. Managed Solutions
Operators to position as co-innovators with their customers in the 5G era by offering managed services

Operators are increasingly entering the market to create and manage a range of connectivity plus solutions for customers. The benefit of this approach is that operators can co-innovate with their customers. For example, by applying data science and AI tools to IoT customer data (e.g. fleet management company), an operator can help the customer to identify new business opportunities or more efficient ways of running their business.

An important opportunity in the 5G era will be to manage 5G private networks that several large enterprises seek to deploy. As history shows that businesses generally benefit from outsourcing connectivity solutions as a non-core function, operators will need to put together a compelling value proposition that could include leased spectrum, equipment, and management.

Designing and building technology solutions for large enterprises is a market traditionally dominated by large system integrators, especially in developed markets. Operators will have to compete in this market by upskilling themselves and building up their brand to achieve market recognition and reputation. Operators in developing markets, with less system integrator competition, have a stronger opportunity in this space.

An example of Beyond connectivity is NTT Docomo creating 5G Open Innovation Cloud, allowing other companies to create and offer new innovative services on the NTT Docomo network.

While this is a good explanation on how operators can move beyond basic connectivity, I doubt if all operators will offer all the options explained. Differentiated connectivity should be easy to offer as it would use the 5G native architecture, without any additional features. The other two will depend on operator will and how much effort they are prepared to put into it. I doubt many will.

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