For organizations active in the industrial sector, 5G is the main enabler of digital transformation, and they therefore intend to implement it within two years of market deployment. According to a recent study by the Capgemini Research Institute entitled “5G in Industrial Operations: How Telcos and Industrial companies stand to benefit“, interest in 5G is manifesting itself towards private licenses, with almost half of the large companies in the industrial sector (47%) intending to buy them.
According to the study, 5G is considered a catalyst for digital transformation after cloud computing and manufacturers estimate that this technology will offer more secure and efficient operations.
Below you can read the main findings of the study, conducted on 800 executives of companies in the industrial sector and on 150 managers in the telecommunications sector in 12 countries.
5G is fundamental for digital transformation
When executives of companies in the industrial sector were asked about the technologies that will most enable their digital transformation strategy in the next five years, 75% said that 5G is a key enabler, placing it in second place after cloud computing (84%) and before other innovative technologies such as advanced automation and AI/machine learning. Industrial companies believe that the versatility, flexibility and reliability of 5G will help address connectivity challenges (considered a limiting factor of digital transformation for 44% of respondents) and will generate several use cases.
Industrial companies want to quickly deploy 5G
There is a widespread sense of confidence in the potential of 5G, with nearly two-thirds of industrial companies (65%) planning to implement it within the first two years of the technology’s uptake on the market. In Italy (35%), France (30%) and Canada (27%) more than a quarter of respondents intend to use 5G within the first year, while 75% of companies in the industrial sector in the United Kingdom and Italy, 69% of those in Spain and 68% of those in the United States and Norway plan to start implementation within the first two years. It is much more likely that the largest manufacturers will implement 5G first than the sector in general: 74% of companies with annual revenues of more than 10 billion dollars, in fact, plan to start using this technology within the first two years, compared to 57% of companies with a turnover between 500 million dollars and 1 billion dollars.
A third (33%) of industrial companies are planning to buy their 5G license
47% of the companies in the sector are already expressing a strong interest, which arises from the desire for greater autonomy and security, combined with the concern that telecommunications operators are too slow in the implementation of the 5G public network. However, there will be different regulatory barriers depending on the geographical areas.
Gunther May, Head of Technology and Innovation, Automation and Electrification Business Unit at Bosch Rexroth AG, said: “As a manufacturer, we are closely monitoring the 5G landscape and believe that acquiring a proprietary license can offer several benefits. It would allow us to have full control of our 5G strategy and allow us to have more freedom of action in the development of the network independently or together with a telecommunications operator.”
Operational and security benefits will drive 5G adoption
When asked about the business reasons that drove them to invest in 5G, more than half cited increased operational security (54%) and operational efficiency coupled with cost savings (52%). The companies also claim that 5G will help enable or improve use cases, such as real-time analytics, video surveillance, remote control of distributed production, AI-enabled or remotely controlled movements, remote operations through the use of AR/VR, etc.
Companies in the industrial sector will pay more for premium services
Despite the uncertainties related to the speed of deployment, manufacturers are already willing to pay a surcharge for greater connectivity derived from 5G. 72% of industrial companies will pay more for increasing mobile broadband speed and capacity, but only 54% of telecom operators believe there is real interest. This represents an opportunity for industry players to develop a strategy on how to build a highly profitable 5G business model.
Gea Smith, Telecom, Media and Technology Director of Capgemini Business Unit Italy, has declared: “This research shows that companies in the industrial sector have confidence about the benefits that 5G will bring, even before the technology arrives on the market. 5G is an emerging technology and there will be quite a few challenges to overcome before it is ready to be deployed on a large scale. A co-innovative approach between the realities of the industrial sector and the telco ecosystem is essential, in terms of pilot projects and open experimentation platforms, to create a winning business environment, with services and operating models that will accelerate the adoption of 5G.”