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CSPs' share of enterprise 5G deals down 5% in 2021

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A new annual report find telcos are still too slow to react to enterprises' demands.

Beyond by BearingPoint and analyst house Omdia released their annual enterprise 5G report which found the share of enterprise 5G deals led by communications service providers (CSPs) has fallen from 21% in 2020 to 16% today.

While the number of enterprise 5G projects doubled over the course of the year, and despite telcos recognising "the need for a multi-technology, omni-partner, solution-oriented approach" for enterprise 5G, they are not faring well against the competition.

The study found that CSPs are starting to realize the importance of the enterprise 5G market but must fully commit and put the dedicated resources in place faster if they are to capture the opportunities as they emerge.

One year on

In 2020, the first report, Industries and Enterprises are ready to reap the benefits of 5G, found that 72.3% of CSPs believed most 5G revenues would be derived from B2B, B2B2C, or government/smart city opportunities. 

It also found that CSPs were cut out of enterprises 5G engagement and the solution building by enterprises and other players in the market. Only 21% of enterprise 5G deals were led by CSPs and in 40% of the deals CSPs were the secondary supplier. 32% were led by enterprises and 7% by alternative service providers. 
 
One year on, CSPs' thinking has evolved. The study reveals that CSPs now realize that solution-oriented production models also require mastering multiple technologies (such as cloud, edge, AI, Wi-Fi 6 etc) and partnership options to complement 5G networks.

According to this year’s report, more CSPs understood the opportunity and started to provide private networks and 5G solutions to the enterprise. However, they are still too slow to react to enterprise demands.

In fact, the research shows that in the past 12 months, the number of enterprise 5G projects doubled while the share of CSPs deals dropped to 16%. On the contrary, alternative service providers such as private networks specialists, ramped up their efforts and operations and outpaced CSPs. Indeed, alternative service providers increased their share of enterprise 5G deals from 7% last year to 27% this year.

Looking to CSPs

The report also looks at the role of CSPs in the ecosystem through the eyes of potential partners such as systems integrators, global vendors and vendor specialists. Surprisingly, all ecosystem players expect CSPs to take the lead on orchestrating different services, technologies, and capabilities and believe there is more to be done by CSPs to capture this role.
 
Angus Ward, CEO, Beyond by BearingPoint, said, “Despite developing and launching new strategies and forming partnerships, CSPs failed to move at the speed of enterprise demand. It’s clear that enterprises are eager to adopt 5G solutions and reap the benefits the technology can bring to their businesses but these findings can only lead us to one conclusion: CSPs understand the opportunity, but their determination and speed are lacking. 

“CSPs need to stop hesitating and continue to be more collaborative even when they may not be in full control of the product or solution. They must start living up to the expectations that enterprises and partners have of them, experimenting with business models, accelerating testing and monetizing new offerings that are co-created with ecosystems of partners.”

More than connectivity

“It’s clear the enterprise 5G market is not just about connectivity. CSPs need to prove their prowess in security, network architecture and design and demonstrate commercial creativity to win the trust of enterprises to do more,” says Evan Kirchheimer, Research Vice President, Service Provider & Communications, Omdia.

“CSPs have technological assets and expertise. To bring these to life and monetize them in the 5G world they will need to form relationships with new partners and think creatively about what type of partner organization will help them address the enterprise opportunity.”
 
“Despite the headline figures, we remain optimistic about the ability of CSPs to turn the situation around. The 5G enterprise game is far from over, ” continues Ward. “Many global and regional CSPs have now launched 5G enterprise services, still more now understand the need for a multi-technology, omni-partner, solution-oriented and verticalized approach for enterprise 5G. This is really encouraging. But as an industry, CSPs need to move faster, orchestrate ecosystems and fully commit to enterprise 5G in order to capitalise on the opportunity.”
 
Download a free copy of CSPs readiness to reap the benefits of 5G – A year on