Scaling innovation in the 5G era

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Fifth generation mobile, or 5G, is about to disrupt the wireless communications industry in a major way. Products, services, businesses and operating models are all set to change. Growth opportunities are unimaginable.

Naturally, operators and vertical industries are clamoring to get on board and innovate. But wanting to harness the power of 5G is one thing; actually reimagining your products and services so you can successfully scale your 5G investment is quite another.

Amol Phadke, Accenture’s Global Network Services Lead, explains what businesses need to know to stay ahead of the 5G curve.

Ultimately, you have to be laser sharp in the definition of what value you want 5G to deliver.

Which 5G application is best for your business?

Unlike previous generations of mobile services, 5G isn’t just relevant to CSPs; it has many applications for many industries. This presents a set of unique challenges for creating a spectrum business strategy. According to Phadke, there are typically three business applications for 5G:

  1. Massive scale: This includes any industrial levels of IoT and large-scale devices that want to use 5G.
  2. Ultra-reliable, low-latency services: This refers to tasks where latency matters, where seconds of delay can mean the difference between good performance and loss of service.
  3. Extremely high-capacity bandwidth

Each requires a different frequency spectrum band. Spectrum remains a critical resource in 5G and availability and cost will have a major impact on the business case. Depending on your particular operator and country, you’ll decide to choose one of these three, two of these three, or all of them.

You’ll want to understand which frequency you’d like to acquire from the government in whichever market you operate, as that will dictate which services you launch and how you make money. Is it going to be a cellular service? Are you going to take 5G and offer high-speed broadband? Or are you going to create value by using 5G and talking to mining, finance, automobiles and other adjacent industries outside of telecom to help them monetize their supply chains and their operating models?

“Ultimately, you have to be laser sharp in the definition of what value you want 5G to deliver,” says Phadke.

Catching the 5G wave

business meeting in modern wavy building architecture

When a new product or technology like 5G is introduced to the market, two things begin to happen. First, market and competitive pressures will start pushing the switch of the product. As soon as a set of consumers start moving to a newer product in the market, it creates the network effect.

“There’s no point in launching something the market is not ready for,” Phadke says, “but you want to start positioning 5G products so you can capture the wave and the clients.”

Second, savvy businesses will look at 5G as an enabler, if not right now, then in the near future. Gaming is a prime example. “If virtual and augmented reality (VR and AR) becomes an affordable reality—not just in studios, but in our homes—it could trigger a new kind of customer,” says Phadke. “This customer thinks, ‘I’m ready to pay this much extra because I love the idea of gaming in my home and I need a service that doesn’t exist yet.’”

In these cases, you create a demand for users who are willing to pay a premium to switch to 5G, knowing that premium would come down over time as more people switch.

Businesses need to ask themselves: How much support should we provide towards scaling the efforts for 5G?

What about my successful legacy products?

When looking at the product life cycle for all companies, there is a cost component to new products that goes away after the first few years. That means some of the older products in your portfolio at the moment are some of the most popular. When a newer technology like 5G comes along, there will be more costs than return in the first few years.

Businesses need to ask themselves: How much support should we provide towards scaling the efforts for 5G? At what point are we jeopardizing our legacy products and services?

“There’s the classic question: ‘How many of these resources can I really allocate to where I know the future industry is heading when I know there are profitable businesses I have to consider in the short term?’” says Phadke. “It’s just as important to think about getting a return on your investment and the state of the business you are in today.”

So if you invested significantly in 4G and LTE around mobile services, you want to make sure there’s enough ROI before you start diving headfirst into 5G. On the other hand, there could be certain operators or markets where you could capture a market share that isn’t yours today.

Getting your organization on board

business people reviewing strategy

Internal organizational change can be a big problem for scaling innovation, so address these issues head-on.

“Often times, the biggest challenge isn’t setting the vision but getting the rest of the organization towards that vision,” says Phadke. Assuming you’ve decided a certain amount of value 5G will deliver in a particular segment, the rest of the company needs to be on board.

One way to motivate the organization is to have the innovation conversation early. Especially for 5G, a lot of this is still being talked through, explains Phadke, who urges a group collective mindset of, “Let’s try something.” You don’t have to wait for the fully-baked business case. You just need a direction where it makes sense to experiment. Try something in the market and learn through that.

“You need to quickly start [innovating] so you can test things in the market and withdraw,” Phadke says.

One way to motivate the organization is to have the innovation conversation early.

Start small and move quickly

The changes promised by 5G won’t happen overnight but through a gradual yet fundamental shift. “Instead of saying, ‘let’s do five things and try to do them sequentially in the next five months,’ pick one thing where it makes the most sense,” says Phadke. “Then build something around the concept of an MVP or minimum viable product.”

In other words, test one hypothesis all the way to implementation. If your product does take off, build some scale around it and learn from that. Replicate and go onto the next one. This is a more prudent strategy than choosing a number of different offerings, but having to wait a year to put them all into effect.

Don’t get left behind

With any new disruptive technology, you’ll want to participate instead of waiting on the sidelines. By taking small incremental steps to get ready, you can always scale up or scale down, depending on the “hype cycle” versus reality.

The one thing you shouldn’t do as an industry is look at 5G as yet another incremental change or something you’ll get to in due course. Because before you know it, you’ll be left behind.

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