Telcos not ready to make money from 5G - Nokia

Telcos are woefully underprepared to make money from 5G, according to new research from Nokia.

Mary Lennighan

February 18, 2022

3 Min Read

Telcos are woefully underprepared to make money from 5G, according to new research from Finnish kit vendor Nokia.

The company surveyed 100 CSPs worldwide and discovered that most do not have sufficient BSS systems in place to enable them to monetise 5G effectively. You could be forgiven for scrolling on past this headline finding, given that Nokia has a vested interest in persuading telecoms operators they need to buy more kit for 5G. But a closer look at the vendor’s survey results shows that even with some carefully-worded questions, there is an issue here.

Just 11% of CSPs have the required BSS capability required for 5G-enabled business models, including monetisation tools. Admittedly, we don’t know exactly how prepared or otherwise the 89% who said they are planning to modernise their BSS really are, but that’s still a sizeable number.

Similarly, a staggering 98% of respondents said they would need to alter their BSS in the coming years in order to put up-to-date monetisation tools in place. As Nokia puts it, that means that telcos understand the importance of having 5G-ready monetisation systems and the fact that they need to invest in that area. But you could also argue that just 2% of telcos are fully ready to get the best out of 5G.

Their top investment priority is real-time charging, with two-thirds believing it to be essential for 5G monetisation. Meanwhile, 70% of CSPs are considering deploying monetisation systems on the public cloud, to improve their ability to react and meet the needs of customers. These figures could arguably be higher; surely most telcos are looking at real-time charging, for example. But again, the wording of the survey could be coming into play here. On the subject of cloud monetisation, the respondents were actually responding to the statement ‘deploying BSS via public cloud is a viable option for us,’ rather than commenting on the benefits of the technology itself.

Nonetheless, it is perhaps worrying that so many think cloud-based BSS is not viable for them, particularly in Europe, where only 57% of respondents are looking to cloud native monetisation systems.

Without slick monetisation systems, telcos will struggle to reap all the financial benefits 5G has promised for many years. Delivering new services, like those that require network slicing, faster and at scale, will be vital for telcos looking for faster returns on those hefty 5G network costs. And they need the kit to do that.

“To unlock 5G revenues and move beyond the traditional data plan model, a major shift among CSPs is needed toward adaptable monetization systems that utilize cloud-native, scalable and flexible infrastructure and open APIs for easy integration and deployment; and I think this survey highlights the work still to be done,” said Hamdy Farid, Senior Vice President, Business Applications at Nokia, in a statement accompanying the survey results.

And we don’t just have Nokia’s word for it.

“Most Service Providers are ill-prepared to effectively engage and monetize emerging 5G-enabled use cases and need to urgently transform their BSS,” said John Abraham, Principal Analyst at Analysys Mason. “With Service Providers looking to get that ROI on 5G, now is the time for them to invest in flexible monetization systems especially as 5G brings to the forefront the importance of real-time charging capabilities,” he added.

That message is pretty clear: telcos are running the risk of missing out on the additional 5G streams that will justify the cost of licences and infrastructure. Unless they think they can boost their toplines through data plans alone – hint: they can’t – then operators need to act.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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