A recent research report from Nokia and Nokia Bell Labs has identified main barriers to the adoption of 5G.
The report said 5G-enabled industries have the potential to deliver $8 trillion in value to the global economy by 2030.
The Covid-19 pandemic is forecast to increase the value creation potential of 5G in the medium and long-term by accelerating digitization, particularly among the least digitally advanced industries.
The report highlights a correlation between 5G deployment and business performance. Companies at an advanced level of 5G adoption were the only group to experience a net increase in productivity (+10 percent) following Covid-19, and the only group able to maintain or increase customer engagement during the pandemic.
5G mature companies are growing faster than their peers: 49 percent of companies in the expansion phase and 37 percent in the implementation phase – representing the two most advanced stages of 5G maturity – achieved growth last year, compared with 20 percent in the planning, 11 percent in discovery and 5 percent in passive phases.
These findings show that the companies who are most 5G mature, and therefore likely also the most advanced in their overall digital transformation, are showing the highest impact in business performance.
Despite the economic challenges of Covid-19, a boom in 5G investment will see 72 percent of large companies invest in 5G over the next 5 years. The report forecasts a rapid uptick in investment over the next three years as enterprises seek to expedite digitalization. A third of companies across all regions fear being outpaced by the competition should they not invest in 5G within the next 3 years.
Across 8 economies – Australia, Germany, Finland, Japan, Saudi Arabia, South Korea, the UK and the US – 50 percent of companies are at the midway level on 5G readiness, between initial planning, trials and deployment, compared to 7 percent that are classed as 5G mature.
While 13 percent of organizations in Saudi Arabia and 12 percent in the United States rated as 5G mature, fewer than one in 20 were classed as such in Germany (3 percent), Finland (2 percent) and the UK (4 percent).
While many organizations are at the implementation stage, for most this still means trials, pilots or early stage deployments such as 5G mobile phones or limited 5G connectivity for fleet services or rural locations. Few have yet to realize the true breadth, depth and potential of 5G.
86 percent of decision makers said they have some kind of strategy for 5G, and over a third fear being outpaced by the competition should they not invest in 5G in the next 3 years. Only 15 percent are currently investing in its implementation, and over a quarter (29 percent) of businesses are not planning any 5G investment in the next 5 years.
“Organizations must start or intensify their planning now and accelerate business model innovation to remain competitive in a rapidly digitalizing global economy. This will require digitalizing operations, processes and ways of working to capture the full potential of 5G,” Gabriela Styf Sjoman, chief strategy officer at Nokia, said.
Barriers to adoption
# Ecosystem availability
Limited availability of key infrastructure outside urban centers was cited by 28 percent of decision-makers.
# Education and understanding
17 percent said a key barrier is that decision-makers within their business do not understand 5G, while 14 percent said they don’t know enough about it themselves.
Over a fifth of technology buyers (22 percent) said that 5G implementation is not a current priority for their business.
# Cost and complexity
15 percent said they were not confident their company would be able to implement the necessary technologies.
Over a third (34 percent) said that they are concerned about the security of 5G. The report did not mention about Huawei network that is reported to have posed security challenges to telecom operators.