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What Is 5G Monetization? And How Long Until Communications Service Providers See ROI?

5G network technology wristband on a factory worker's wrist
[®PER IMAGES/Stocksy United]

After spending billions in 5G infrastructure, communications service providers (CSPs) need to monetize their networks for returns on their investment. These terms, technologies, and use cases shorten the path to monetization.

5G technology is making headlines. Sports fans use AT&T’s 5G aerial camera on ESPN to control camera angles as they watch games. Music lovers attend 5G-enabled concerts that let them hold up their smartphone to the stage to watch their favorite band up close through augmented reality (AR). While these experiences generate buzz and excitement, they come at a high cost for communications service providers (CSPs). Only 5G monetization can show a return on their multi-billion dollar 5G infrastructure investments.

Dig deeper into 5G monetization approaches

Learn more about three key approaches that communications service providers can use to increase their 5G ROI.

What is 5G monetization?

5G monetization is defined as the strategies, business models, and tactics that CSPs must put in place to earn revenue from their infrastructure investments. CSPs won’t recoup these capital investments from consumer business alone. TM Forum predicts that 50% of revenue will come from business customers, such as manufacturers and healthcare organizations that can use 5G to improve processes and data-sharing.

Let’s explore the basics of 5G monetization and ways you can see real business value.

Definitions of three 5G monetization terms you need to know

Discussion around 5G monetization is often riddled with acronyms and technical jargon. Let’s start by defining four of the most common terms you’ll hear:

  • Network-as-a-service (NaaS): Think of NaaS as a subscription service for enterprises. This business model offers on-demand purchasing so that companies can adjust their 5G networks based on their needs.
  • Value-add services: It’s not enough for CSPs to have 5G. Value-add services create blurry adjacencies between what a CSP can offer and the organizations they must work with to run and optimize the network. In business-to-consumer (B2C), CSPs work with music venues and sports stadiums to create immersive, live experiences with their 5G networks. A CSP wouldn’t be able to do that on their own — they need a way in with another organization to add value to the network.
  • Network slicing: Say an operator wants to offer fixed wireless access and enhanced security for mobile. They can offer a dedicated “slice” of their 5G network. Each slice meets service-specific requirements based on customer needs. 

The digital tools and strategies that support 5G monetization

To make 5G monetization possible, CSPs need the right tools and strategies, especially when securely opening up their networks to partners for the first time. These are the common ones every CSP needs:

  • An API strategy: CSPs need to confidently and securely work with partners to extend their 5G network. Through application programming interfaces (APIs), partners can connect to a CSP’s 5G network. Information is shared freely and securely through the API to deliver fast service.
  • Business support service (BSS): BSS systems help CSPs orchestrate APIs with external partners. They can also provide the logic that partners need to configure, price, and quote services all on one platform. Salesforce Communications Cloud is an example of a BSS.
  • Developer ecosystems: Each industry and category, from smart homes to wearables, will require its own ecosystem of partners to enable the network. Developers will need to rely on trusted ecosystems that allow them to innovate quickly and help the business bring new offerings forward for each use case.

Five complementary technologies that enable 5G monetization

5G on its own is powerful. When coupled with technologies like the Internet of Things (IoT) and augmented reality, it opens up the door to tons of network monetization opportunities. Consider these five examples:

Drones

One of the core components of 5G is the ability to process data at a nearby cell tower instead of streaming it back to a data center. Project SharkEye, a joint research initiative with Salesforce and The University of California (UC) Santa Barbara, uses drones to fly over the California coastline for shark sightings. Imagine processing a video image of a shark at a local cell tower and sending it to the lifeguard at the local beach in milliseconds to get people out of the water fast.

The Internet of Things (IoT) 

IoT and 5G are like salt and pepper. They just go together. In manufacturing, you can couple IoT with your 5G network to monitor equipment performance with more precision than you could with 4G. Imagine using live location tracking from a mobile device to determine exact, up-to-the-second traffic patterns.

Augmented reality (AR) and mixed reality (MR)

We’ve gotten headaches from the fuzzy images of AR or MR, but we’ve only scratched the surface. Many of the life-like live event fan experiences combine 5G with AR or MR and take advantage of lightning-fast data streaming.

Artificial Intelligence (AI)

AI helps operators predict the spectrum and bandwidth of their 5G network and identify points of failure. When coupled with IoT, AI can help companies pinpoint problems before they even happen. For example, in Project SharkEye, Einstein Vision detects the sharks in the water and sends the alerts.

Autonomous vehicles

Precision makes 5G valuable to its customers. Think of seaports, which have huge cranes that take containers on and off ships, on and off trucks, and back onto ships. Some port operators are starting to experiment with autonomous cranes and trucks. 5G makes it possible for ports to run the state-of-the-art cameras and programmable logic controllers (PLCs) on cranes needed to ensure precise movement of cargo.

Three real-world 5G monetization use cases

Real-time data sharing through 5G is a major value to companies because it can save money, mitigate risk, and, depending on the business, save lives. While widespread adoption of 5G isn’t expected until 2025, according to Statista, over the next 12-24 months, we’ll see dedicated 5G networks for specific enterprises and organizations like these: 

Manufacturing

A manufacturer can use 5G to monitor their campus and production lines down to the millisecond. By streaming real-time data, they can monitor exceptions on the production line, manage those exceptions, and correct them. This is a big deal when there’s millions of dollars on the line.

Oil and gas

Oil and gas companies can use 5G to see if their stacks are getting too hot. They can also survey private property to ensure no unauthorized vehicles have trespassed inside. Both benefits allow them to get ahead of potential hazards or security breaches before they happen.

Healthcare

Remote patient monitoring dramatically improves with 5G. If a patient has a chronic health condition, a mix of IoT and 5G can help providers monitor a patient’s condition in real-time outside of a healthcare facility. If something appears abnormal, the provider can contact the patient and recommend the proper course of action, which can improve health outcomes.

Are you ready to see a return on your 5G infrastructure investment?

When it comes to 5G monetization, CSPs would be remiss to only focus on the “cool” stuff. Sure, it makes headlines, but CSPs must consider all kinds of customers. Ask yourself: How can your 5G network solve different kinds of business problems? What types of technologies would unlock the true value of your network? From there, you’ll be able to build a 5G monetization strategy that can show a return on your investment for years to come.

Learn more about monetizing 5G with B2B2X partners

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Jonathan Phillips Senior Director, Communications Industry Marketing

Jonathan Phillips is the senior director of communications industry marketing at Salesforce. He brings over 25 years of experience in business and technical architecture, solution consulting, and enterprise applications of CRM, contact centers, and telecommunications networks. As a well-respected industry leader, he regularly engages with customers and speaks at conferences and training sessions around the world.

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