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COVID accelerates interest in 5G, digital transformation and IoT

By Shannon Williams
Mon 28 Jun 2021

The COVID-19 pandemic has accelerated interest in 5G, according to a new study. 

The EY Reimagining Industry Futures Study 2021 found almost three quarters of enterprises (71%) believe that the COVID-19 pandemic has accelerated existing digital transformation plans, with 52% signalling greater interest in 5G and the Internet of Things.

The study found 74% of organisation respondents across a range of sectors believe 5G will represent an opportunity to reinvent their processes over the next five years.

“Just as 4G networks has fundamentally disrupted consumer technology, 5G will be the game-changing technology for industrial transformation across all sectors," says Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications Leader Elect.

"Access to 5G networks will be key to realising the potential of industrial disruptive technologies such as AI and IoT that will enable enterprises to establish their market leadership," he says.

"Laggards will face strong barriers to entry and struggle to bridge the digital divide.”

As organisations continue to build out their transformation plans, 65% of respondents believe that emerging technologies will play a critical role in their business’ recovery from the COVID-19 pandemic. However, most organisations are approaching their deployments with caution, with just 17% of enterprises currently investing in 5G. At the same time, another 73% plan to invest in three years’ time.

Sixty-four percent of enterprise respondents reported that they are struggling to identify the right kind of vendor to address their 5G strategy, while 74% of respondents stated that vendors must provide a more coherent vision of 5G to construct a robust investment case. Priorities stated by respondents when it comes to choosing a 5G vendor include that vendors must deliver business outcomes as partners rather than pure technology benefits (79%), and end-to-end solutions are a preferred supplier attribute (30%).
Asia-Pacific pulling ahead in terms of current and future investments

5G investments among organisations in Asia-Pacific are further ahead than the Americas and Europe, with 78% of organisations currently investing or planning to invest within the next two to three years, compared with 71% of organisations in both the Americas and Europe.

Meanwhile, 27% of Asia-Pacific organisations signal significantly greater interest in 5G and IoT since the COVID-19 pandemic, compared with 13% and 15% in the Americas and Europe, respectively. Overall, the study finds European enterprises are lagging compared with the other regions in terms of recognising 5G’s potential: 70% believe that 5G will enter the heart of their business processes, compared to 80% in Asia-Pacific and 75% in the Americas.


Singapore, Thailand and Vietnam have also publicly announced their 5G network deployment plans, and Malaysia is targeting to roll out its plans by the end of 2021.

“Despite strong government support for 5G in the Southeast Asia, the region is lagging behind other markets. After all, telco operators in Southeast Asia are still recuperating their investments from laying out 4G networks," says Wang.

"Furthermore, the capital expenditure of 5G technology is significantly higher than that of 4G, and industry demand is still nascent given that 5G business use cases are still emerging. Without clear and established cost benefits, overall delays can be expected in the region," he says.

If the status quo remains unchanged, and enterprises are unable to leverage 5G as a key enabling technology in their digital transformation plans, this will significantly impact the fundamental competitiveness of the region. The resulting bipolarisation of technology-enabled productivity could lead to a widening digital and economic gap between developed and undeveloped countries.

Wang says addressing the complex and critical challenge of enabling 5G in the region will require more than government support alone. 

"The collective buy-in, as well as collaborative investment and effort of enterprises, telco operators and all stakeholders in the entire ecosystem, will be needed for the successful rollout of 5G.”

Telecommunications operators lack digital transformation expertise
The report finds that only 18% of respondents see telecommunications operators as digital transformation experts, a vital competence that must be improved as enterprises increasingly turn to 5G to drive transformation agendas forward. The majority of respondents see IT services and application/platform vendors (51% and 65% respectively) as digital transformation experts.

When asked what their top 5G priority was, 36% stated it was around exploring 5G’s relationship to other emerging technologies; while 5G’s integration with existing technologies and processes was seen as the number one challenge, cited by 38% of business respondents.

Tom Loozen, EY Global Telecommunications Leader, says, "Organisations understand the importance of 5G, IoT and other emerging technologies; however, the capability gap among suppliers is a key concern. 

"Telecommunications operators should take steps to improve their transformation expertise, recognising that businesses want suppliers to act as partners that provide end-to-end solutions," he says.

"For this to happen, operators should explore new ecosystem positions while focusing on the opportunities for business model overhaul that 5G can enable.”

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