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75% of industry wants to leverage 5G but barriers remain, finds survey

Most industrial companies plan to leverage 5G within two years, with many even willing to operate with their own private licenses 75% of industry wants to leverage 5G but barriers remain, finds survey image

New research from Capgemini has revealed that there is a significant appetite for 5G, with 75% of industrial companies planning to leverage 5G within the first two years of availability – but there are many barriers still to overcome to get there.

According to the Capgemini Research Institute, which surveyed over 800 industrial companies’ executives and 150 telecoms executives across 12 countries, when firms were asked which technologies will be the most central to their digital transformation over the next five years, 75% mentioned 5G, 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.

Private 5G licenses are becoming popular

Of the firms surveyed, 33% are planning to apply for their own private 5G license. This is fueled by an ambition for greater autonomy and security controls along with concerns that telecom operators are too slow in rolling-out 5G public networks. However, there will be regulatory barriers which differ across countries.

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Gunther May, head of technology and innovation, business unit automation and electrification at Bosch Rexroth AG said: “As a solution provider and a manufacturer, we are monitoring the 5G landscape closely and we believe there are multiple benefits to holding our own license. It would allow us to be in full control of our 5G strategy by giving us the freedom to either deploy the network alone or with a telecom operator.”

Industrial companies will pay more for premium services

Despite uncertainties around the speed of deployment, manufacturers are already willing to pay a premium charge for enhanced 5G connectivity. 72% of industrial companies will pay more for enhanced mobile broadband speed and increased capacity, yet only 54% of telecom operators think there is an appetite for this. This presents an opportunity for telecom operators to consider how they build a highly profitable 5G business model.

AI and IoT: two sides of the same coin

The market is seeing significant investments in the convergence of AI and IoT, and its already begun creating new markets and opportunities

“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,” said Pierre Fortier, Principal Consultant in Telecom, Media and Technology at Capgemini Invent.

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