According to Frost & Sullivan, the value-added service element of 5G could contribute more to the revenues in this new sector than the underlying connectivity itself. In the words of Sofea Zukarnain, Research Associate, Frost & Sullivan, “Mobile operators are aggressively entering the 5G space to grasp opportunities presented by expanding their portfolio, in order to increase revenues and improve customer experience. To enjoy the full potential of 5G, mobile operators ought to focus on industry partnerships and collaborations, which will reduce overall costs and hasten the deployment of the new use-cases enabled by the introduction of 5G,”
That leaves us with just one question… What will these value-added services be, and which ones will allow operators and service providers to rise to the top with 5G? Let’s take a look at some of the contenders for the crown.
IoT and Mobile data management
Cloud storage is already a winning VAS, as device data continues to multiply, and enterprises and individual users alike need somewhere to keep their sensitive information secure and compliant. With the rise in 5G, the data explosion is poised for another boost, and managing and maintaining all of that information will be no mean feat. It’s easy to see how subscribers would pay more for a smart system where they can search, access and download the information that they need when they need it, including multimedia, recipes, maps, and more, areas that are already managed by many users from their mobile devices.
For enterprises, the need for smart management capabilities will be even more important when IoT truly finds its feet. While users might have a single cell phone or tablet computer, some enterprises will be launching thousands or even hundreds of thousands of IoT sensors or devices, and this scale can only be managed with automation and centralized control.
There’s no doubt that the automotive industry and transport more widely are going to be revolutionized by the connectivity potential of 5G. Think vehicle to grid communications that allow for smart traffic or weather prediction, connected trucks and lorries for deliveries and cargo, smart cities, drones, and connected public transportation, and that’s all before we think about more far away use cases such as autonomous cars.
If you’re already used to answering calls through your car speakers, or linking your maps through your infotainment center, you can imagine the connectivity use cases for Telco companies when it comes to connected vehicles. VAS include security like collision warnings or protection from threats such as IMSI catchers, or navigation services that augment existing solutions, such as adding suggestions to your route based on existing subscriber data. Stop for a Starbucks? Don’t mind if I do.
Entertainment and games
Telcos are strongly placed to compete when it comes to mobile apps and entertainment OTT services, in part due to their existing list of subscribers – a perfect audience who already trust and pay for services.
Entertainment and gaming is an easy entry point, and with the growth of exciting new use cases such as Augmented Reality, (think about the likes of Pokemon Go or Minecraft Earth) or video streaming, (who wouldn’t want a slice of the Netflix pie?) there’s a lot of room for profit.
Especially when it comes to IoT, the ARPU (average revenue per device) is seriously questionable. Devices might use tiny amounts of data over years of their lifespan, so VAS need to be where the money is found. This isn’t a new challenge. Over the past decade, data has become the way that users interact with their mobile devices, and third-party services have gone from being a crazy idea to being true competitors. If you don’t believe us, just think about what messaging services such as WhatsApp have done to the traditional SMS.
Security is a great VAS, as the threats to cellular and connected devices of all kinds only continue to grow, with new attacks including Man-in-the-Middle, ToRPEDO threats, SS7 and Diameter loopholes, Phishing, and location tracking. It’s a serious minefield, and if enterprises are going to trust IoT with sensitive customer information in sectors such as education or healthcare, security is going to need to be there from the start.
Energy and utilities
Imagine the power-house (no pun intended) of communication service providers that can efficiently manage smart-homes, energy management, and security at home. As services that we often take for granted, such as power, water or heat, become potential revenue opportunities for connectivity providers, why shouldn’t Telcos get involved?
Centralizing billing and management across multiple products is of immediate and obvious value to the consumer, and can allow for interesting and unique use cases. Think for example of an onboarding package for a new home rental or purchase, where instead of just internet and phone lines being set up in one go, you can add connected energy and utilities to the mix.
Facilitating these value-added services to make them a reality
For enterprises to grab hold of these VAS and run with them, they need an intelligent billing and rating engine that does more than simply serve a customer with a set invoice at the end of each month. New use cases means new models of payment, such as Bill on Behalf of, where your customer needs to invoice their own customer in turn, or dynamic pricing that can handle tracking and measurement in real-time for new and emerging services.
BD Innovations offers a Business Support System that is inherently agile and flexible, modular in nature, and ready for anything that IoT can throw its way. If you want to be ready for 5G, we’re step one.