Industrial companies eye private 5G licences, willing to pay more for premium services

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A third of industrial companies plan to apply for a private 5G licence, according to new research from Capgemini.

Large companies are most likely to go this route, with 47% saying they’re interested in the idea.

Executives from 800 companies in 12 countries surveyed by Capgemini said investment in private 5G licences would be driven by a desire for greater autonomy and security, combined with concerns about telecom operators being too slow in rolling-out 5G public networks.

However, there will be regulatory barriers which differ across countries.

Benefits

The research found that industrial businesses have high hopes for 5G. When asked which technologies will be the most integral to their digital transformation over the next five years, 75% mentioned 5G as a key enabler, ranking second to cloud computing (84%), and ahead of technology innovations such as advanced automation and AI/machine learning.

Industrial companies believe that 5G’s versatility, flexibility and reliability will help address connectivity challenges (a limiting factor to digital transformation for 44% of those polled) and fuel future use cases.

Business model

With these benefits in mind, 72% of industrial companies said they would be willing pay more for enhanced mobile broadband speed and increased capacity, yet only 54% of telecom operators think there is appetite for this.

This presents an opportunity for telecom operators to consider how they build a highly profitable 5G business model, Capgemini said.

Almost two-thirds of industrial companies (65%) plan to implement 5G within the first two years of availability. In Italy (35%), France (30%) and Canada (27%), over a quarter intend to use 5G within the first year.

Co-innovation

Pierre Fortier, Principal Consultant in Telecom, Media and Technology at Capgemini Invent, said, “This research makes it clear that industrial companies are confident about the benefits of 5G before it has even come to market. That said, 5G is an emerging technology and there will be many challenges to overcome before it is ready to be deployed at scale.

“Co-innovation between industrial companies and the telco ecosystem, in the form of pilots and open experimentation platforms, will be essential to create win-win business, service and operating models that will foster 5G adoption.”