BearingPoint//Beyond, in collaboration with Omdia, today released a report highlighting the potential of small and medium-sized enterprises (SMEs) as a major source of future 5G revenue for communications service providers (CSPs). The study, commissioned by BearingPoint//Beyond and conducted by Omdia, reveals that, despite SMEs representing 99% of the world’s businesses – a SME services market estimated to be worth $433 billion by 2025 – the market segment remains vast and untapped with the majority of CSPs focusing 70% of their resources on the 1% enterprise market. Despite this revelation, not enough CSPs are recognizing SMEs as a major source of B2B revenue, especially on 5G. Yet SMEs, many of which already see value in 5G, perceive CSPs as their trusted 5G go-to partner with 42% prioritizing them to execute their 5G strategies.
Currently CSPs identify large multinational enterprises as the segment that will drive 5G revenues, but the large enterprises surveyed do not regard CSPs as their primary 5G provider. In fact, the report finds that 72% of enterprises will prefer to work with a service provider that is not a CSP. Findings show that 31% of large multinational enterprises will choose cloud service providers to execute their 5G strategies and 34% even favor taking a D.I.Y. approach.
“CSPs are still trying to approach 5G the same way they approached 4G, with a clear focus on consumer and enterprise. However, 5G opens new opportunities for CSPs and one of them is the SME segment. Digitalization and COVID-19 have transformed the needs of SMEs and their awareness of the impact that new technologies such as 5G, IoT, and AI can have on their business to enhance productivity and efficiency, and boost sales. In fact, our previous research highlighted that on average 73% of global SMEs see 5G as important to their business. However, it’s clear that it’s not 5G technology that they’re after, instead SMEs understand that 5G is one part of a broader technology solution that they need. In fact, 93% of SMEs told us that it’s more important for CSPs to collaborate with an ecosystem of partners to build solutions that better fit their needs than to simply provision 5G services,” states Angus Ward, CEO, BearingPoint//Beyond
The report emphasizes that CSPs should not squander the opportunity to support SMEs in realizing their 5G ambitions, as SMEs digitalized their business amidst the deeply transformational impact of COVID-19. CSPs are encouraged to consider the business needs of SMEs and assess how 5G can improve productivity and efficiency or enable them to grow their business. Yet today, most 5G offers for SMEs are “Consumer Up”, re-sleeved consumer offers. 5G’s real value for this lucrative market lies in the creation of partner ecosystems to aid them in achieving significant strategic shifts to sell more services and reach larger audiences.