5G no silver bullet for telcos hoping to tap smart manufacturing sector

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Telcos must do more than offer basic 5G connectivity if they want to gain a foothold in the smart manufacturing sector, ABI Research has warned.

The research firm said that private LTE networks are only just beginning to make their way onto the factory floor, and therefore still lack the success stories needed to prove their worth. As a result, ABI Research predicts that mobile service providers will play a secondary role in the manufacturing market, putting the revenue opportunity at just $2.6 billion by 2022.

ABI Research said telcos need to be patient and align their ambitions with what the sector wants.

"The manufacturing market looks for enhancements, not disruption, and for solutions, not technologies. MSPs should tailor their offerings, including 5G, to these enhancements and solutions," said Pablo Tomasi, Senior Analyst at ABI Research.

Telcos frequently tout network slicing as one of the 5G technologies that will help them to adapt their connectivity services to the specific needs of any sector.

However, as well as offering technology, telcos must also build trust with manufacturers, citing the recently-announced partnership between Orange and Siemens as an example of what needs to become a growing trend.

"MSPs have a chance to enter the smart manufacturing market building from the ground up, gaining trust as partners, and proving that the value of their offering is beyond what is currently delivered in the market. 5G is a promise, but alone is not enough and with doubts on what business model will support it, 5G's ability to integrate with legacy technologies, and the actual results delivered in harsh factory environments, there is much uncertainty about whether 5G will be a game-changer for MSPs in manufacturing," Tomasi said.

"The manufacturing market has grown without MSPs so far, and if they don't play their cards right, it will continue to do so," he warned.