02/27/2024 | News release | Distributed by Public on 02/27/2024 15:05
Convergence by the numbers: revenue and costs
For enterprise networks to do more, they have to be more; that is, they must become more agile in how much they can do and how they do it. Convergence is the buzzword of the hour, but it's not a single, simple concept. It can apply to various business case-driven implementations, but whether it's a converged 5G/Wi-Fi network,a converged O-RAN and DAS/small cell, or a converged public and private network-in each case, for MNOs, it's all about simplifying the architecture and monetizing its services.
First, let's look at the revenue opportunities. 5G networks in B2B enterprises represent a key opportunity for MNOs to monetize converged network offerings. A recent survey conducted by GSMA (discussed in this webinar, free registration required) revealed that 83% of MNO chief executives see their enterprise and government customers as their strongest revenue opportunity for 5G deployments.
The same survey showed that almost two-thirds of MNOs consider private wireless networks as an important part of their enterprise strategy. While not discounting considerable consumer interest in 5G-driven services for things like gaming on the go, B2B enterprise is clearly the strongest 5G opportunity for MNOs in 2024, driving 5G indoors through on-premises public and private 5G networks.
The reasons for this interest in the enterprise space are many, but here are a few of particular interest:
Secondly, let's consider the potential for cost savings. MNOs are increasingly able to offload 5G network deployment costs-in whole or in part-to the enterprises they serve, broadening the revenue stream beyond that generated by carrying traffic. Recent advances have made this business model even more attractive because of the multiple efficiencies they afford, namely:
It's also worth noting that many of these cost-reducing factors provide a significant secondary benefit in the sustainability profile of the enterprise network, as they require less material, energy, and cooling than older analog networks. This green dimension can add more depth to an already strong product offering, as many enterprises hold public commitments to pursuing sustainable practices. The actual per-case benefit is determined by a large number of factors unique to the deployment, but there is almost always a sustainability argument to be made.
What enterprises want-and expect-from converged 5G networks
The capacity, low latency, and high security inherent to 5G are all key advantages in any number of operational categories, including voice and video, IoT device connectivity, and more. Enterprises can take advantage of the next level of converged on-premises networks to bring 5G into their facilities, but enterprises expect simplicity of operation and minimal infrastructure footprint.
While the applications are as diverse as the enterprises that use them, one common expectation MNOs and third-party operators alike will find with increasing regularity is the need for simplicity and as close to zero-touch management as possible. Enterprises that invest the CapEx to deploy such networks don't want to double up expenses by staffing up IT to manage it.
For MNOs, this is where their own branding, NaaS, and analytics offerings can help put converged 5G networks back on the table for those enterprises that otherwise wouldn't be willing to afford the total cost of ownership that comes with a business-changing network.
2024 is the year of enterprise 5G
The 5G wave continues to roll. This year, it arrives as an office, retail, or manufacturing location near you. MNOs stand to ride a surge of enterprise interest in converged 5G networks. Like the ongoing slate of 5G deployments in large public venues, the downstream market represented by the diverse enterprise category is shaping up to be a key opportunity, even in a tightening economy.
Enterprises need stronger, more flexible connectivity between employees, customers, devices, and applications. O-RAN-compliant DAS and small cells deliver all this, along with a highly diversified product portfolio that's resilient to market disruptions. MNOs stand to win big because deployment costs are shouldered by enterprises to a greater degree than public venues, the ongoing upsell opportunities are many and varied, and remote NaaSbusiness models create reliable, long-term revenue streams as they deliver more value to key enterprise customers.
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This article was first published in Network Computing.