What does 5G mean for telecom?

The race to be the first to scale 5G is on. The telecom industry is fast at work building a foundation for the 5G future, including laying the proverbial pipe, imagining and deploying innovative products and services, and striking exciting strategic partnerships. But, winning won’t come easy.

Challenges for telecom

Massive investment is required of already debt-laden network operators to deploy 5G networks including buying spectrum, upgrading core network software to 5G and installing millions of small cells.

Device availability
Most current mobile devices are not 5g compatible. The tipping point is years away.

Pricing
Consumers are largely satisfied with their current internet and would need a clear value proposition beyond faster internet and streaming. Our research shows that users would only be willing to pay an extra $5.06/month in-home service, and an extra $4.40/month on mobile.

Spectrum scarcity
Network operators need large blocks of spectrum to redeploy more efficiently, but US spectrum policy has favored diverse ownership of small blocks of spectrum in each band.

Ban on China-based vendors
The communications industry’s manufacturing relieves heavily on China. The US’s trade war with the country complicates deployment of affordable, fast, and reliable 5G services.

Small cell bottlenecks
According to a CTIA forecast, the number of small cells in the U.S. will increase from 86,000 in 2018 to 800,000 by 2023. But to reach these numbers, carriers need to work with city officials to establish a nationwide small cell information exchange.

Current telco operating models are designed to maintain a 4G network not fit for 5G. To evolve, telcos will need to overhaul everything from infrastructure to technology to functions like marketing and sales.

Building 5G requires unique capabilities, which depend on software more than hardware/equipment. Adapting will have fundamental impacts on the workforce, requiring digital upskilling.

5G market making opportunities for telecom

Maximize coverage across the country

To fund additional investments, carriers must first focus on delivering 5G services that are compatible with 4G core mobile networks. As demand for advanced 5G services grows, carriers can update their core networks and offer more advanced 5G services.

Harness fixed wireless to expand high-speed broadband availability

Fixed wireless access provides high-speed broadband comparable to fiber optic networks without the need to deploy expensive, fixed lines. Fixed wireless access is especially appealing in rural and dense urban areas where laying fiber optic lines is difficult and/or expensive.

Reimagine products and services to make 5G pay

Operators must explore revenue streams in a new realm: “B2B2X” category of business-to-business-to-consumer (or business-to-business-to-business). By replacing legacy network infrastructure with competitive, cloud-based services, operators can go far beyond marketing generic connectivity services and target large enterprises and small to medium sized clients with more valuable services -- in particular with respect to video and IoT.

Helping telecoms succeed - how PwC can help

Aligning your internal strategy with external market conditions, our 5G specialists help you define the best path forward. We take a 360-degree, holistic view across your organization to reveal the strategy, operations, talent, and regulatory factors needed to monetize 5G.

We help you determine market entry, product and service design, go to market approach including partnerships and deals, and evaluate customer and channel pricing and profitability.

We work with you to design the right back and front office infrastructure to support innovation along the path to 5G.

We help you interpret and respond to regulatory uncertainty including spectrum feasibility, small cell deployment planning, trade barriers, data privacy and security across the network.

We help you transform your workforce to cultivate the skills required to build 5G, package products and services, and sell to new and existing customers.

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Dan Hays

US Technology, Media and Telecommunications Corporate Strategy Leader, PwC's Strategy&, PwC US

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Rob Mesirow

PwC Connected Solutions Leader, PwC US

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