5G Future: Business Models For Monetization: Author: Mark Newman, Chief Analyst Editor: Dawn Bushaus, Managing Editor

5G FUTURE: BUSINESS
MODELS FOR MONETIZATION

Author: Mark Newman, Chief Analyst
Editor: Dawn Bushaus, Managing Editor
September 2019
Sponsors:
inform.tmforum.org
03 05 11
Contents
14 17 22
The big picture Section 1: Is relying on Section 2: 5G’s potential
connectivity alone risky? impact on business models
25
Section 3: Consumer 5G Section 4: 5G helps mobile Section 5: Make it happen –
services point to fixed- operators target Strategies for developing
mobile convergence enterprises 5G business models
Additional features and

resources
inform.tmforum.org 2
e big picture
Communications service providers (CSPs) worldwide are under considerable competitive and
financial pressure. This necessitates discussions about future business models, and for many
operators talk quickly turns to the potential role for 5G in tapping new sources of revenue.
Consider the tough challenges The research note pointed to two financial markets believe that market
operators are facing: potential scenarios that could help rationalization can lead to market
the sector improve. recovery.
Revenues are stagnant
The first is network sharing,
principally in the radio access
Can 5G help?
network, to lower capital expenditure Interestingly, there was little focus in
Digital-native companies the research note on the potential for
(CapEx). Although the authors of the
continue to disrupt the increasing revenues – and no
research said they expect to see
market for communications reference at all to the potential of 5G.
savings on operating expenditures
services Given that most financial analysts
(OpEx) through digitization, these
Despite fierce competition, gains will be offset by higher CapEx take a strong steer from the operators
regulators are not always resulting from sustained investment in themselves, this suggests that
willing to allow the market to fiber and 5G. However, if multiple European CSPs have modest (some
consolidate operators were to use the same might say realistic or even pessimistic)
infrastructure through sharing aspirations for 5G.
Cutting costs is difficult if not agreements, cost savings could be
impossible because Our research finds that many
greater than expected.
customers are constantly executives working for CSPs and
demanding better, faster networks Secondly, the research speculated on telecoms suppliers do not share this
and services the possibility that the new European pessimism. This spring we conducted
Commission might take a more a survey about future telecoms
lenient approach towards market business models. We received 143
rationalization and separation of responses from executives working
Is telecoms broken?
A research note published earlier this CSPs’ networks and services for 64 different CSPs and 103
year by a leading European bank said businesses. In many European executives working for 47 suppliers.
that investors perceive the telecoms countries, regulators have prevented
sector to be broken and that this mergers and acquisitions between
perception is unlikely to shift so long mobile operators because of concerns
as it continues to deliver poor returns. that prices would rise. Certainly,
e big picture
Who are the Future business model survey respondents?

CSPs Suppliers
143 103
respondents from 64 respondents from 47
unique companies unique companies
opera ng in 40 countries
57%
converged operators
8%
fixed operators
41% 27%
network func ons OSS/BSS so!ware
23%
mobile operators
7%
digital service providers
14%
consultant or
12%
cloud solu ons
(IoT, smart ci es, etc.) integrator
TM Forum, 2019
A majority of CSP respondents said This in itself is telling: At a time when n How spectrum availability, cloud
they are at least reasonably optimistic the most successful companies are computing and edge computing
about their prospects for success in fusing expertise in technology and could revolutionize business models
the short term (one to two years) and business, most CSPs retain clear
long term (two to five years). Indeed, divisions between the teams n Which consumer 5G use cases are
about two thirds are optimistic about responsible for network, IT, products most promising
their companies’ prospects. and sales (consumer and enterprise
Why early 5G pricing for consumer
lines of business) and finance. To
n
services points to fixed-mobile
compete effectively and realize the
convergence
promises of 5G, operators must adopt
Unified approach
Part of the reason for respondents’
a unified approach Why B2B is important for 5G
optimism likely correlates to their job n
– more than a third work in the IT This report examines the new n Which business models operators
department. IT staff are keenly aware business models CSPs can use to are considering for enterprises
of the power of software and cloud, capitalize on 5G. Read it to
both of which will feature prominently understand: n How the first 5G deployments are
in the 5G core. However, they do not targeting consumers and
necessarily have insight into the n Whether it’s necessary for CSPs to enterprises simultaneously
commercial and financial aspects of diversify and move beyond
delivering services. connectivity n Why it’s important to consider
platform business models
Section 1
Is relying on connectivity
alone risky?
Communications service providers (CSPs) and their suppliers are optimistic about the future
of their businesses. They also recognize the need to diversify, but they are not sure which new
business models to embrace. As 5G deployment begins, many operators are evaluating
whether to move beyond connectivity – and if so, how?
Who responded?
From February through June, we surveyed CSPs and their suppliers about their visions for the future of telecoms, a future
that in many cases will hinge on 5G. We received 143 responses from executives at 64 CSPs globally and 103 executives
working for 47 suppliers.
About a quarter of CSP respondents said they hold management or strategy positions, while 35% work in IT. The rest were
split among roles such as network, product management, and sales and marketing. About 10% of CSP respondents have
responsibility for enterprise lines of business, while another 10% focus on consumer lines of business.
Locaon of CSP
6% 36%
North America Europe and/or
Russia
10% 27%
La n America/ Asia-Pacific
Caribbean
15% 6%
Middle East
Global
and/or Africa
Type of CSP
57% 7%
8% Converged operator (some combina on of
mobile, fixed voice and data, and TV)
Digital services provider
Fixed operator (e.g. IoT, smart ci es)
4% 1%
23% Data center/
cloud provider
Cable
operator
Mobile operator
Section 1
Size of CSP
Number of subscribers
37% 30%
Fewer than 5 million to
5 million 25 million
12.5% 5.5%
25 million to 50 million to
4% 11%
100 million to More than
Type of supplier
7%
Other
8.5%
Consultant
41%
11.5% Telecoms network
Cloud services / vendor
solu!ons provider
5%
Systems
Integrator
16%
So ware (BSS/OSS)
vendor
Section 1
Fortune telling
Most CSP respondents are at least reasonably optimistic about their prospects for success in the short term (one to two
years) and long term (two to five years), although they are less certain about the long term, with about 20% saying they are
very or reasonably pessimistic.
How opmisc are CSPs about the future?
1% 7%
10%
22% 19%
14%
26%
1-2 years 2-5 years
19%
41% 41%
Very op mis c Reasonably op mis c Neither op mis c nor pessimis c Reasonably pessimis c Very pessimis c
TM Forum, 2019
Where will revenue come from?
20% 20.5% 15%

26%
CSPs Suppliers
22.5%
33% 21% 42%
A slow, gradual stagna on in Flat revenues with data and Gently increasing revenues as Solid revenue growth
revenues (and profitability) as TV services compensa ng CSPs roll out TV services and from expansion into
compe on and regula on for decines in voice make promising entries into the TV, IoT and ICT
con nue to bite IoT/ICT services business services
TM Forum, 2019
Section 1
We asked this question in a more Despite the general tone of optimism,

specific way of CSPs and their however, more than one in four CSP
New business models
suppliers (see graphic on page 7). We respondents expect a slow, gradual CSPs and their suppliers continue to
wanted to know how they believe stagnation in revenues, which is be very divided over whether CSPs
revenue will grow. Most respondents troubling. That vendors are more should seek new business models. We
said they expect the global telecoms optimistic than CSPs generally is a have been posing the same question
industry to record either gently consistent finding in all our surveys. about business models in our surveys
increasing revenue or solid revenue The likely reason for their optimism is for the last three years, and their
growth, which is consistent with that suppliers need to make a strong answers remain consistent. In this
responses to a similar question that case for how their solutions can help survey, just over half of CSP
we ask in all our Digital Transformation operators increase revenue at a time respondents said they believe that
Tracker surveys. when CSPs are under considerable telcos should diversify by providing
pressure to cut spending on end-to-end digital services or
technology. becoming platform providers to bring
third-party services to market.
What should CSPs aspire to become?
23% 18%
19%
32%
CSPs Suppliers
21%
26%
32%
29%
Best-in-class Mul -play operators and Full digital service providers offering a Pla!orm providers working
connec vity providers service providers (fixed, range of end-to-end digital services, with partners to bring
mobile, TV, broadband) some mes in compe on with players services to market
such as Google and Apple
TM Forum, 2019
Read the latest Digital Transformation Tracker report:
Section 1
Many telcos feel – with some If CSPs focus exclusively on CSPs will need to acquire new skills or
justification – that their legacy in connectivity they may need to accept become resellers of third-party
terms of people, skillsets, systems, a different role in the value chain – services in order to diversify beyond
products and business models makes becoming a wholesale provider or connectivity. The types of services
it difficult, if not impossible, to evolve enabler rather than a service provider. they could offer include:
into modern digital service providers. They already fulfill this role in the
Furthermore, they need to be mobile virtual network operator Content (TV, video, etc.) –
convinced that telcos can successfully (MVNO) business and with sponsored traditional pay-TV is
combine traditional telecoms data, which is a variation on the already a mature sector for
operation, in terms of services MVNO model. But new opportunities many telcos; indeed, many are leaders
provided, with a digital business. We’ll in wholesale likely will appear in the in national markets worldwide.
discuss this in greater detail in the B2B market (see Section 4).
IP voice and messaging –
next sections.
CSPs are rolling these
Beyond connectivity services out slowly to
Diversifying revenue Most CSPs and suppliers believe that consumers (see Section 3 for more
It’s fairly easy for CSPs that serve only telcos must expand beyond about consumer market
one connectivity market – for connectivity if they are to thrive, and opportunities).
example, pure mobile operators or that revenue diversification
fixed/cable TV operators – to diversify necessarily means offering services Systems integration and
by expanding into other types of beyond connectivity and professional services –
connectivity. Indeed, in assessing the communications. CSPs look enviously CSPs can target enterprise
last five years of telecoms evolution, at the growth of digital-native verticals by focusing on specific use
the transition to multi-play has been companies – often with resentment cases, but to do so they will need to
the single biggest change. that they have been the main acquire skills to deliver complex
beneficiaries of investment in high- solutions that include a mixture of
But there are plenty of other speed broadband networks. connectivity and IT services with a
connectivity-based opportunities for focus on software. Today this role is
CSPs, particularly as they roll out 5G, SingTel highlighted the problem during mainly fulfilled by systems integrators
such as: a recent financial results presentation and professional services firms such
when executives asserted that as IBM, Accenture, Infosys and Tech
Leveraging 5G for fixed- “participating in the digital economy is Mahindra or by IT software vendors.
mobile substitution (cord- a non-negotiable strategy.” The
cutting) or rolling out fixed company showed a version of the
wireless access services using graphic below in the presentation,
millimeter spectrum bands noting that collectively the growth of
digital-native companies is far
Building and operating
outpacing telco growth.
private cellular networks
for large enterprises using
capabilities such as network slicing Parcipang in the digital economy is a non-negoable strategy
and software-defined networking
Connecting things rather

than people in the internet
of things (IoT)
Value of top 10 Value of top 10
telcos was 70% of telcos was only
top internet 20% of top internet
companies companies
2013
2018
TM Forum, 2019 (recrea on of SingTel graphic)
Section 1
New partnership models

Rather than developing their own Spotlight on payments for diversification
skills and capabilities to target new Many CSPs are experimenting with Most operators around the world
markets, CSPs have the option of platforms to deliver banking offer carrier billing, and a few have
partnering with companies that services to consumers. The types identified it as a major growth
already have them. They can do this of services they can offer include opportunity. Leaders include
through wholesale/retail relationships mobile payments, mobile wallets Japan’s DoCoMo and South
(for example, reselling services from and digital commerce, which Korea’s SK Telecom, both of which
content providers like Netflix or includes carrier billing (also called have been generating revenues
Spotify), revenue sharing, or bundling direct operator billing) for goods from payments for digital goods for
free over-the-top services (for and services. several years. Recently business
example, offering a limited number of has slowed, however, as customers
WhatsApp messages as part of a Safaricom and Orange have been migrate to other global and
bundle). particularly successful at delivering national platforms.
payment services in Africa. Based
In most cases CSPs bundle third-party in Kenya, Safaricom is by far the BT has expanded into the B2B
services with their own, but most successful in the world, banking and financial services
sometimes they deliver their own generating nearly a third of its total sector with a dedicated subsidiary
services in a wholesale arrangement revenue from the M-Pesa mobile called BT Radianz, which operates
as is the case with MVNOs. As B2B payments service. M-Pesa has a neutral platform for financial
digital services become more evolved from being a pure trading applications.
common, CSPs will need to explore payments service to a platform
and pursue both approaches (see where customers can buy goods So far there has been little activity
Section 4 for more about enterprise and services from hundreds of to create 5G applications
opportunities). different providers. There are specifically for banking, payments
162,000 M-Pesa agents today. and commerce. However, the low
Platform business models remain an latency of 5G and guaranteed
Orange is most committed to
aspiration for CSPs, but identifying quality of service could be
banking with its Orange Money
examples of where it’s happening exploited by traders who attach
service, although total revenues, all
successfully is difficult. The one huge value to high-speed
derived from its African
exception is perhaps the M-Pesa connectivity.
subsidiaries, account for less than
service in Kenya (see panel opposite).
1% of total group revenue.
While there has been much buzz Rakuten – and one which is
Leading the way
Until examples emerge of CSPs
about both companies, their business consistent with its core e-commerce
successfully diversifying and
models don’t really differ significantly business – would be to offer
embracing new business models,
from other mobile operators. Reliance discounts on Rakuten Mobile
healthy skepticism will remain about
Jio’s model was innovative in India purchases (or usage) when customers
their ability to change. But startups
because it was the first operator to make other purchases, and vice versa.
like Reliance Jio in India and Rakuten
offer data-centric pricing plans (and
Mobile in Japan may provide In the next section, we’ll look at how
voice for free). It also offers attractive
inspiration because of their use of spectrum availability, cloud computing
content bundles and has launched
cloud-native technologies. This and edge computing could help CSPs
many of its own apps. As such, its
approach helped Jio scale incredibly diversify.
approach is similar to Turkcell’s.
quickly to meet strong demand for its
services which initially were offered Rakuten has yet to show its hand in
for free. In Rakuten’s case, the terms of pricing and services (its
company is deploying cloud October 2019 launch has been
extensively in the network. delayed). The most likely approach for
Section 2
5G’s potential impact on
business models
Whether 5G amounts to revolution or evolution for mobile operators is a topic of hot debate.
TM Forum’s recent report 5G: Evolution or revolution? argues that in the short term 5G is
evolutionary, but in the long term it is likely to be revolutionary. This section looks specifically
at the potential to revolutionize business models through spectrum availability, cloud
computing and edge computing.
Read TM Forum’s latest 5G report: enterprises, or enterprises could The availability of spectrum may give
decide to bypass CSPs by building CSPs more confidence to launch
their own networks or contracting unlimited data pricing plans without
with new wholesale players. worrying about spectrum constraints.
In addition, fixed wireless access
5G: EVOLUTION
AND REVOLUTION
Author: Mike Hibberd, Contribung Analyst
April 2019
networks could be a viable alternative

to fixed broadband using extremely
What about consumers?
While 5G is often discussed in the
high frequencies in the millimeter band
context of new enterprise
of spectrum between 30Ghz and
opportunities, it could be highly
300Ghz. Operators could exploit this
disruptive to the core consumer
Sponsors:
to compete with cable operators for

connectivity business as well. The
inform.tmforum.org
home and small business broadband,

combination of faster speeds and
Spectrum availability and to serve remote areas where fixed
unlimited data plans raise the prospect
The way the mobile industry functions, broadband has not been viable. See
of consumers using 5G as an
and to an extent the pricing of mobile Section 3 for further discussion of 5G
alternative to home broadband.
services, depend on the availability (or consumer business models.
scarcity) of spectrum. 5G improves
access to spectrum for existing
players, while regulators are also
reserving some spectrum for new Which path to 5G for enterprises?
local, regional and wholesale networks.
And in some countries, there is
opportunity for businesses to use
shared or unlicensed spectrum to
develop their own private 5G
networks.
It’s not clear whether spectrum Mobile operators use
abundance and liberalization will

network slicing to New wholesale players and
enterprises cut operators
fundamentally change the mobile

dominate the
enterprise market out of the equaon
sector, but there is already enough

interest in private 5G networks to
assert that they will have an impact.
The graphic opposite shows the
possible paths. Mobile operators could
use network slicing and shared or
leased spectrum to sell 5G services to TM Forum, 2019
Section 2
allocating huge amounts of new between 9 a.m. and 4 p.m. Monday

spectrum to dramatically increase through Friday would be able to buy a
Cloud’s potential
Cloud and software-defined capacity. very different service compared to a
networking (SDN) could prove even national fleet management
more impactful than spectrum Time of day – not all people organization that needs a relatively
availability because they give CSPs the or applications require low-bandwidth nationwide service that
opportunity to provide new connectivity 24/7. is available 24/7.
networking capabilities dynamically, on
demand and at lower cost though Location – in the B2B market
network slicing and IT capabilities that many applications will be
Exposing capabilities
enable customer self-service. Today’s location specific and thus The key to realizing the full potential of
networks have been built to manage require connectivity with only a small network slicing lies in being able to
traffic at peak times, but if it were number of cell sites. expose the capabilities to customers
possible to give customers the ability so that they can manage their own
to scale network resources up and Security – 5G takes a very services. This happens through CSPs’
down as needed based on many different approach to security IT support systems (see below).
variables, theoretically the cost of from previous generations of Customers’ requirements are unlikely
delivering the service would be lower mobile technology in that it is to remain static over a prolonged
and customer experience would embedded in the technology (for period, particularly in use-case driven
improve. example, all traffic is encrypted and enterprise markets. As such, cloud
data integrity is protected). computing can help CSPs pass this
Using network slicing and network as a network flexibility and elasticity on to
service (NaaS), CSPs hope to develop So, a factory in a single location their end users.
new business models for delivering requiring super-fast throughput
varying levels of service to different
groups of customers. Services could be
based on the following: Helping CSPs deliver intelligent connectivity
Quality of service (QoS) – TM Forum members are exploring can work together to provide
refers to the technologies that how to deliver intelligent network slices connecting
manage data traffic by connectivity services using hospitals.
reducing latency, packet loss and jitter network slicing, which requires
on the network; in 5G, operators will understanding the full lifecycle of “This is where orchestration and
be able to manage many QoS the services from ordering to the OSS/BSS [operational and
parameters. billing. Part of the TM Forum Open business support system] roles
Digital Framework (see page 34), really come into play because they
Throughput – 5G offers the Open Digital Architecture need to make sure that the slices
theoretical download speeds (ODA) provides a functional are activated on-demand on two
of 10-50Gbps; early 5G architecture that operators can use different carriers, using different
deployments have achieved average for end-to-end management and ways, using different agreements
speeds of 100-250Mbps and peak orchestration of 5G and other and different contracts,” explains
speeds of 1Gbps. digital services. Marco Gatti, OSS/BSS Principle
Consultant, Ericsson. “That is quite
Latency – this is the time it Using learnings from several TM complex.”
takes to connect; latency on Forum Catalyst proofs of concept,
today’s LTE networks is more the ODA team is developing an Watch this video to learn more
than 50 milliseconds, but 5G is aiming implementation framework that about the Skynet Catalyst:
for less than 10 milliseconds. can support 5G use cases. This
work is detailed in a document
Capacity – in some urban called User guide for network slice
areas the capacity of mobile management.
networks is stretched to the
limit, which results in degradation of An ongoing, award-winning
service. With 5G, regulators are Catalyst called Skynet Phase II
recently demonstrated how CSPs
Section 2
Although they are making progress Promises of edge compung

technically in proofs of concept like the
one illustrated above, CSPs are a long It will enable development of new lines of
way from settling on pricing for services
85%
business by providing cloud-based
that use network slicing. But it would

services to enterprises 62%
seem likely that they will be able to use

cloud and SDN to deliver more It will deliver cost savings to operators by
customized private network solutions.

71%
enabling them to route traffic more efficiently
across their networks 62%
Today, most businesses pay their mobile

service providers on a per-month/per- It is not clear that operators will be able to 41%
SIM basis, much like consumers, but 5G

mone ze edge compu ng
and network slicing should allow for

44%
usage-based billing that considers many

variables. See Section 4 for more on
CSPs Suppliers
enterprise business models and NaaS. models, many of them aren’t confident He talks about this in terms of the
Also, an upcoming companion report about how it will be monetized. ‘Intelligent Edge’, which encompasses
called 5G future: Targeting the millions of edge devices and hundreds
enterprise, which will be published later of edge data centers. As complexity
this month, will provide more detailed increases and the edge expands, telcos
Possible scenarios
analysis of the network slicing How and when edge computing will be have an opportunity to deliver not only
opportunity. deployed is still unclear. The following 5G connectivity, but also value-added
scenarios, which are not mutually services such as data analytics, security
exclusive, are all possible: and QoS guarantees.
Edge computing
In the short and medium term, CSPs Edge computing will be dominated by “We are not going to compete by
won’t have to rely on 5G to deliver IoT the same players that building an edge network with 5G – we
services because most of them have dominate today’s public cloud have no plans whatsoever to do the last
built low-power wireless access market (Amazon Web Services, mile,” Troup emphasizes. “We’re not
networks using LTE or other Google, IBM and Microsoft). They will building the 5G edge. We are using it –
technologies, but latency is an issue on explore an array of approaches for we need it to work – but we’re not
such networks. According to data from installing edge computing including building it.”
mobile analytics company Opensignal, potentially leasing facilities from CSPs.
latency on US LTE networks ranges
between 54 and 64 milliseconds from Mobile operators will play an important Bottom line
the mobile device to base station. role in edge computing. Their Given that scenarios for the rollout of
primary motivation will be edge computing are uncertain, making
CSPs and their suppliers believe they driving down costs and predictions about when or if it will
can reduce the delay to just 1-2 increasing operational efficiency in the happen is risky. If 5G can deliver a
milliseconds using 5G. However, end- management of traffic over their reduction in latency similar to that
to-end latency is likely to be networks, but delivering latency- achieved by LTE over 4G, end-to-end
considerably higher, particularly if data sensitive services to business users will latency would be about 25-30
must travel deep into the network. also be a driver. They will leverage their milliseconds. The question is whether
Getting end-to-end latency down into own passive infrastructure to install that’s enough to spur new business
single digits consistently and reliably will edge computing capabilities. models.
require edge computing.
Edge computing will be driven by Applications like remote surgery, drones
Respondents to our survey are quite enterprise users. Given that a as a service, multi-player gaming and
bullish about the potential for edge large proportion of edge- financial trading need very low latency
computing, especially CSPs. A full 85% enabled applications will be in- and will require QoS guarantees. This
of them said they believe it will enable building, they will require 5G coverage could be challenging for in-building
new lines of business by providing and cloud computing on the premises. services or for services that require
cloud-based service to enterprises. The coverage in remote areas.
graphic above reveals the percentage of Microsoft’s Eric Troup, Chief Technology
respondents who agreed with the Officer, Worldwide Communications In the next section we’ll look more
statements shown. Interestingly, even and Media Industries, envisions closely at how 5G could affect business
though CSPs and suppliers believe edge partnering with CSPs to deliver edge models targeting consumers.
computing will enable new business computing capabilities to enterprises.
Section 3
Consumer 5G services point
to fixed-mobile convergence
So far, mobile operators have struggled to come up with compelling new use cases for 5G in
the consumer market. LTE already does a decent job of streaming video, so the key to
monetizing 5G for this market lies in exploiting the enhanced reliability it offers. This section
“
looks at the potential for new 5G use cases and analyzes early pricing models, which point to
a convergence of fixed and mobile networks.
In a recent blog about the difference Impact of 5G consumer use cases on CSPs’ businesses
between 4G and 5G, UK operator EE
offers a realistic assessment of the
benefits of 5G:
Enhanced mobile broadband with 53% 32% 15%
unlimited data pricing plans
Fixed wireless access 41% 39% 20%
Virtual and augmented

reality services
36% 35% 30%
Unlike 3G to 4G, 5G is not
a replacement for 4G. It Big short- and long-term impact Big long-term impact Li le impact short or long term
enhanced mobile broadband with compete in terms of bringing new

adds another layer to the
unlimited pricing plans will be most services and business models to
network to provide more
capacity in the busiest impactful in the short and long term market.
(see graphic above).
Gaming is the other consumer service
parts of the UK’s busiest
cities.” However, mobile operators will seek that is tipped for success with 5G
to bundle content with their 5G because of its requirement for low-
pricing plans, just as they have with latency connectivity. Vodafone has
Nevertheless, there is enough
their higher-end LTE packages. South partnered with cloud gaming
demand for high-quality mobile
Korean telcos have been particularly developer Hatch to offer its 5G
broadband services that once
active in this regard. SK Telecom has customers a free three-month trial
incorporate 5G and a reasonable level
acquired exclusive live e-sports that gives users access to more than
of coverage is achieved, the consumer
content for its 5G users and has 100 mobile games (see panel on page
market for 5G mobile broadband will
uploaded a large library of virtual 15).
rapidly take off.
reality (VR) videos onto its platform.
Rival operator LG Plus says that One option for operators is to create
Which services? augmented reality (AR) and VR a dedicated gaming network slice that
As part of our survey on future account for 20% of its 5G traffic. guarantees low-latency connectivity.
business models, we asked Finnish operator Elisa has already said
communications service providers In practice, the availability of AR and that its prices will vary based on
(CSPs) which of the main consumer VR content requiring 5G will be speed and latency.
services and use cases for 5G will driven by the Android and Apple
have the biggest impact now and in ecosystems. Indeed, the dominance
the future. More than half of of these ecosystems makes it
respondents said they believe extremely difficult for operators to
Section 3
Gaming needs help from CSPs

At Digital Transformation World delivering a good gaming Watch Jutila and other C-level
2019 in May, Hatch Co-founder & experience for streaming executives discuss the potential for
Chief Commercial Officer Vesa technology.” 5G:
Jutila explained why it’s seeking
partnerships with mobile operators. He added that mobile operators
should take a much more active role
“When you stream music or movies, in optimizing network traffic, and
you can always buffer them before also giving companies like Hatch
you start, but gaming is the sole access to network health indicators
interactive, real-time experience,” so they can optimize and adapt
he said. “That’s why having a services to sudden changes in the
reliable, high-quality, low-latency network environment.
connectivity is essential for
Unlimited pricing Comparison of early 5G pricing plans

When it comes to pricing plans for
broadband services, CSPs have
Monthly cost How much data? Plan details
always treated fixed and mobile

$46 8GB Speeds decrease to 1Mbps a er data cap
services very differently. In most $62 150GB Speeds decrease to 5Mbps a er data cap
countries, fixed broadband usage is

unlimited and pricing depends on
$74 200GB At the end of December, price will rise to $78
per month and a cap of 200GB of data
speed, regardless of usage levels. $104 300GB Data is unlimited un!l end of December
Mobile broadband prices, on the

other hand, are typically based on
$85 Unlimited Always subject to thro"ling and only offers slow
hot-spot speeds and 480p video
usage. Operators have tried, but First 22GB of data are unthro"led; also includes
generally failed, to sustain a price

$95 Unlimited
15GB of LTE hot spot and 720p video
premium for high-speed mobile $105 Unlimited First 75GB of data are unthro"led; also includes
services.
20GB of LTE hot spot and 720p video
But this is changing. The table

$37 20GB
opposite, which shows 5G pricing

$45 40GB
plans for five early entrants, suggests $51 50GB Fastest speeds, no thro"ling
a drift towards unlimited data pricing

– even if in many cases the plans
$57 60GB
include caveats and exemptions. $63 100GB
Further analysis of operators’ 5G

pricing strategies reveals that:
$56 Unlimited Speed 1Gbps
$45 Unlimited Speed 600Mbps
n All launches include unlimited voice

and texts.
$28 Unlimited Maximum speed 2Mbps
Maximum speed 10Mbps
In most markets 5G is available only

$31 Unlimited
n
for plans with the biggest data
$36 Unlimited Maximum speed available
buckets, and in some cases it is

available only with unlimited data
TM Forum, 2019
usage.
n Most early entrants are pricing 5G

at a significant premium over LTE.
n Some operators are bundling

content with 5G (for example, SK
Telecom has secured exclusive
rights to broadcast e-sports events).
“
Section 3
Another aspect of convergence in the

5G era relates to pricing strategies.
Mobile broadband
It is likely that most mobile operators While mobile operators have priced
will follow the trend of launching at mobile broadband services based on
least one unlimited or nearly volume of data consumed (regardless
unlimited pricing plan for 5G. This of speed), fixed broadband providers
In the UK, we intend to
means that when viewed holistically – price services based on throughput.
target the base with our
from a capacity, performance, use
case and commercial perspective – But in July UK operator Vodafone
new Be Unlimited offers,”
5G is beginning to look a lot like the announced an overhaul of its mobile
he said. “However, we will
high-speed broadband business. pricing which includes 5G, switching also target new customers,
from the conventional approach of
It is much too early to understand prices based on inclusive data to
as we are effectively a
how this apparent convergence of unlimited data usage with prices
challenger in the UK
fixed and mobile networks will play based on speed. This approach is
out. However, some potential
consumer market. is is
already used in Switzerland and
scenarios illustrate the implications:
why we’ve priced 5G at
Finland. zero premium, in contrast
Operators will be able to offer a
combination of fixed and mobile
to Germany, where we are
Lasting premium?
network connectivity with the same In most early 5G launches, operators
charging an additional €5
capabilities, meaning that the have priced 5G at a significant per month on our lower
customer does not need to know if premium over LTE. The one exception
the connection is ‘fixed’ or ‘mobile’.
plans.”
is in South Korea where it is 5% to
10% cheaper. While South Korean
If 5G and fixed broadband services Whether 5G can sustain a price
operators are keen to start moving
can deliver the same capabilities, then premium – be it just for incumbent
traffic away from their congested LTE
there should be a strong case for a operators or for the market as a
networks, operators in other
convergence in terms of pricing. In whole – is unclear. When CSPs
countries are under no such pressure.
general, consumers spend less on launched LTE services, they priced
They are happy to test the market for
mobile broadband than home them at a premium over 3G, but
5G and capture any price-insensitive
broadband. within the first couple of years
early adopters before the market
premiums disappeared.
The distinction between home matures, more devices become
broadband and mobile broadband available and competition from other Given that the performance
could begin to blur. 5G increases the operators arrives. enhancement of LTE over 3G was
potential for cord-cutting for those arguably greater than that from LTE to
Vodafone Group CEO Nick Read gave
homes well served by 5G mobile 5G (for example, video streaming was
some interesting insight into pricing
networks. For example, Verizon’s 5G not possible before LTE), it is difficult
strategies in his address to
mobile broadband services offers to see how premiums will last.
shareholders to announce the
unlimited data and unlimited Furthermore, early 5G adopters are
financial results for the first quarter of
tethering. already having to pay a premium over
2019.
LTE because of the higher cost of
devices.
In the next section, we’ll look at how

5G is impacting CSPs’ business
models for enterprise customers.
Section 4
5G helps mobile operators
target enterprises
Business to business (B2B) services account for 20% to 30% of communications service
providers’ (CSPs’) annual revenue globally, which makes B2B a $300 billion to $450 billion
business. So far, this market has been dominated by fixed-line operators, but 5G could change
that, opening a huge opportunity for mobile operators to target enterprises and governmental
organizations with not only connectivity services, but also platform-based services delivered in
conjunction with partners. In this section, we look at some of the business models they are
considering to monetize 5G.
The substantial revenue generated by However, traditional B2B revenue is Forum survey conducted late in 2018,
B2B services is not shared equally under acute pressure. For example, 46% of CSP respondents said that
among CSPs because the market is enterprise voice services have proven their organizations generate less than
dominated by incumbent fixed-line even more vulnerable to the 10% of revenue today from B2B
providers that enjoyed a monopoly on disruption from IP telephony than the services. But overwhelmingly they
serving businesses and government consumer market. Furthermore, traffic expect B2B’s share of the market to
users before markets were liberalized between company locations is falling, grow rapidly over the next 5-10 years,
in the 1980s and 1990s. Incumbent while traffic to and from public and with more than 70% saying B2B will
telcos continue to dominate because private clouds is surging. Current represent more than 50% of revenue
most enterprise end users work in enterprise spending on by 2029. It’s unclear whether there
fixed locations connected through communications does not reflect this are genuine grounds for such a
local area, metropolitan area and wide transition in traffic and requirements, seismic transformation, but there
area networks (LANs, MANs and but inevitably it will shift. certainly are more opportunities for
WANs). Indeed, our analysis growth in B2B than B2C market when
concludes that mobile connectivity it comes to 5G.
accounts for only 30% to 40% of the
Optimism around 5G
CSPs are optimistic about the bump
total B2B market.
5G could bring to B2B. In a TM
CSP revenue from B2B services
11%
17%
46%
11.5%
0-10% More than 50%
43% 71.5%
Now Medium term Long term
TM Forum, 2019
Section 4
Reasons for CSPs’ bullish attitudes continuing growth of public cloud Services acquired Basefarm, a leading
about B2B include: providers – principally Amazon Web player in cloud-based infrastructure
Services (AWS), but also Microsoft and services and the management of
General excitement about Azure and Google. critical applications.
digitization and Industry
4.0. – CSPs feel they missed Following are some of the business Cloud hosting – Vodafone
out on digitization of the consumer models CSPs use to target enterprises and Deutsche Telekom (T-
market, which has been dominated by in the cloud-computing market: Systems) have moved away
digital native platform providers, so from offering their own proprietary
they are desperate to play a leading Providing public cloud cloud services to reselling and hosting
role in B2B. services in direct other providers’ clouds. For example,
competition with AWS, Deutsche Telekom sells Huawei’s
Industry vertical use cases Microsoft and Google – while many FusionSphere as its own brand cloud
for 5G – CSPs are focusing telcos have abandoned the idea of while Vodafone hosts Alibaba in
on myriad use cases in delivering public cloud services, Germany.
verticals such as autonomous cars, Deutsche Telekom and NTT are
financial services, remote healthcare competing directly with cloud-native Creating cloud
and smart cities, all of which have providers. Operators are also having marketplaces – some CSPs
varying requirements for latency, success in some developing markets, have set up cloud
reliability, coverage and availability where there are strict rules on data marketplaces aimed at small to
(see note below). sovereignty and global cloud medium-sized enterprises, but results
providers don’t have a local presence. have been lackluster, so they have
Support from key For example, China Unicom has built scaled back the initiatives. Examples
influencers – suppliers and a large data center and cloud of cloud marketplaces included
consultants are talking up computing business that generated Telstra’s Apps Marketplace and MTN’s
the B2B market opportunity (and 5.7% of its total revenues in 2018. cloud marketplace.
delivering the necessary technology),
which helps CSPs feel confident Bundling connectivity with Rolling out edge computing
about deployment. third-party cloud services – – some CSPs are making a
some operators are proactive move into the
reselling cloud services at or close to fledgling market for edge computing;
cost to protect their core connectivity they are enthusiastic about the
Current B2B models
CSPs predominantly provide fixed and
revenue. For example, CSPs all over potential for leveraging existing
mobile connectivity and virtual private
the world resell Microsoft 365 as part (passive infrastructure) assets. South
networks to enterprises today. They
of a bundle, not because it generates Korean CSPs Korea Telecom and SK
also sell and/or resell third-party
significant profits but because it helps Telecom have already started to
hardware, software and cloud-based
as part of the relationship with B2B deploy edge computing as part of
services.
customers. their 5G roll-outs. SK Telecom
As noted in Section 2, adoption of launched its 5G Mobile Edge
Helping enterprises Computing Platform in March which it
cloud computing is changing the B2B
manage public cloud says it will open to third-party
market, blurring the distinction
services – this is an developers and to enterprises.
between IT and telecoms and
emerging market where CSPs are
spurring competition among CSPs,
competing with systems integrators
systems integrators, software
and IT managed service providers. For
companies and cloud service
example, in 2018 Orange Business
providers. This has resulted in
TM Forum will publish a companion report to this one later in September called 5G future: Targeting the
enterprise. The report will cover in detail how CSPs intend to use technologies like network slicing and edge
computing to target enterprises. In addition, it will explain which verticals CSPs view as most promising,
through analysis of the B2B strategies of the world’s top 25 telcos using publicly available financial results
and presentations to investors.
Section 4
Early 5G deployments target consumers and B2B simultaneously

Even if they are successful in with cutting-edge ICT including AR its 5G rollout. Speaking to investors at
developing new B2B business [augmented reality], VR [virtual reality] its interim results presentation in
models, CSPs won’t be able to and AI [artificial intelligence].” The April, CEO John Donovan explained
monetize them until there is sufficient company is building these clusters in how the company is realizing
5G coverage. This prompts an business districts, parks and factories enterprise opportunities as it rolls out
important question: How will CSPs to target consumer and B2B sectors its network, city by city.
factor the enterprise market into their simultaneously.
plans for rolling out 5G given that “We announced Chicago – Rush
most deployments will leverage CSPs’ The idea is to attract new subscribers Hospital – we’re going to…do
existing LTE (and 3G/2G) network by allowing people to experience advanced 5G in the patient intake
infrastructure, which has been differentiated services at cluster sites, and ambulatory care,” he said. “We
designed for smartphones rather than and SK Telecom also hopes to announced Austin as a 5G market –
enterprise applications? promote development of 5G new we’re doing Samsung robotic
services. For example, the company is manufacturing deployment, and we’re
Two early 5G deployments are planning to build 12 mobile edge building the campus out for Magic
showing how operators may be able computing sites for applications Leap to do their next-generation
to address both markets including manufacturing, media, headset with 5G. So, everything that
simultaneously. In South Korea, SK finance and gaming. we have done has not been to
Telecom has developed what it calls a scattershot a city – it’s been designed
“5G Cluster Strategy”, which seeks to In the US, AT&T is integrating around the enterprise play.”
build “an advanced 5G environment enterprise market opportunities into
below shows the continuum of offers Learn more about telco business
that are possible. We outlined the models:
Continuum of models
When it comes to targeting four approaches in detail in our 2018
enterprises and specific verticals, report Vision 2020: Future CSP
CSPs can take a variety of business models, but we’ve provided a
approaches, from delivering best-in- short recap below with a narrower
class connectivity to providing full focus on 5G.
end-to-end services. The graphic
Divergence and diversificaon away from core competencies
As-a-service End-to-end
Connec vity Pla!orm
connec vity services
TM Forum, 2019
Section 4
intrinsically linked with cloud understood, how to manage slices

computing. Rather than buying and and the number and kinds of new
Connectivity
Fixed-line operators already provide integrating IT software solutions, services CSPs will be able to deliver
several types of connectivity to sometimes from different vendors, as- are not. Visions vary from just a
enterprise customers, such as virtual a-service models allow the enterprise handful of differentiated connectivity
private networks, LANs, MANs and to pay for a hosted the service on a services to fully customized services
WANs. WANs also are a core offering monthly basis. New releases are for large enterprise users.
for mobile operators. In addition, delivered regularly with no disruption
mobile operators deliver private or downtime. For more about network slicing, see
networks by leasing spectrum to this report, and watch for the next
enterprise customers, but this is a 5G future report later in September:
niche offering. 5G and NaaS
CSPs move network functionality and
As noted in Section 2, new rules IT operations to the cloud (a lengthy
May 2019 | www.tmforum.org
around spectrum allocation in some and complex process), they will be NETWORK
countries make it possible for able to expose the capabilities
AS A SERVICE:
enterprises to consider deploying through application program
ADDRESSING THE FULL
ENTERPRISE
their own private 5G networks. Any interfaces (APIs) to enterprise OPPORTUNITY
approach that bypasses CSPs is customers in order to deliver more as-
clearly a threat. However, many a-service offers (see panel on page
Author: Tim McElligott, Senior Analyst
enterprises will not be interested in 12).

managing and operating private 5G
network and will prefer to partner Many CSPs envision offering network Platforms and 5G
with CSPs. We’ll discuss this potential as a service (NaaS) in conjunction In our Vision 2020 report we
threat in more detail in the 5G future: with 5G because of 5G’s network identified two potential platform
Targeting the enteprise report. slicing capabilities. The first NaaS approaches for CSPs to pursue, with
services have been mostly many variations and options possible:
All core connectivity services typically connectivity-based, such as software-
include charges for materials (router, defined WANs, virtual customer n Enabler– CSPs expose core telco
cabling, etc.) and subscription fees. premises equipment and WAN assets (connectivity, billing,
But from the customer’s perspective, optimization, all of which are colocation, security, etc.) to third-
these services typically lack flexibility delivered over fixed networks. But service providers who control the
in terms of pricing and ability to self- deployment of a software-defined 5G relationship with customers
configure. core makes it feasible to deliver this
End-to-end service provider– CSPs
as a mobile service.
n
Many CSPs also offer ‘as-a-service’ use platforms to expand into new
models (for example, network as a While the capability of offering lines of business, such as internet of
service, infrastructure as a service, differentiated services using 5G things (IoT), and control the
software as a service). These are network slicing is relatively well relationship with customers
B2B2X CSP partnering scenarios
XYZ Telco’s role as the B2B2X enabler XYZ Telco’s role as the B2B2X service provider
XYZ Telco’s role is to enable, aggregate

XYZ Telco’s role is to enable the partners to
and commercialize offerings
commercialize their offers
XYZ Telco Partner Scenario A Partner XYZ Telco Scenario B
XYZ Telco as XYZ Telco as

operator/CSP + Content Content
End operator/CSP End
partners’ provider or provider or
user + partners’ user
integrated distributor distributor integrated
services services
Scenario A: Customer rela!onships are managed Scenario B: Customer rela!onships are managed
end to end by partners end to end by the telco
TM Forum, 2018
Section 4
“
But CSPs’ progress on platforms is Plaorm business models get mixed reviews
slow-going. In a report published in
May, consultants at McKinsey &
Company identified some of the key
Our senior management doesn’t really
72%
challenges for incumbent operators:
know what a pla orm business model is
or how it relates to our business
We are experimen!ng with pla orm

business models but only for new lines of 37%
business with no real expecta!on that it
will become a major line of business
Platforms raise difficult We are developing network and IT

systems with an expecta!on that they 29%
questions for CEOs of will support pla orm business models in
the medium to long term
incumbent companies
pushing ahead with their TM Forum, 2019
CSPs have long debated whether new

digital transformations.
‘digital’ businesses should be
End-to-end services
Some CSPs are providing new digital
Should they emulate the
integrated into their core businesses.
services end to end, particularly in the
front-runners, join forces
The main advantage of doing so is
with them or not play at all? IoT. The table below compares three that it allows the digital business to
Not playing may seem risky examples, but in all cases the leverage existing sales and marketing
companies resulted from acquisitions channels. The disadvantage is that the
and operate largely independently
in a world where ‘platforms
digital business may lose its focus and
from the parent companies. desire to be successful.
beat products’. Yet building
No clear patterns have emerged in

your own platform, in a
terms of how and where these
majority of markets where
global platforms are already businesses leverage or intersect with
their parent companies. SK Telecom
acquired SK Infosec with a view to
thriving, may be akin to
exploiting synergies in IoT, security
arm wrestling with a
bulldozer.” and smart home, but the company
still operates as an independent
business.
McKinsey notes that many telcos
often choose to collaborate with
global platform providers like Amazon CSPs acquiring IoT expertise
and Microsoft, but the deals carry risk
of the platform provider moving in on IoT business Details
the partner’s core business. US-based Verizon doled out $5 billion
Verizon Connect acquiring Fleetmatics, Telogis and Movildata
TM Forum’s most recent survey about to create its telematics business
future business models delivers mixed
results. The graphic above reveals the One of three businesses that resulted from
percentage of respondents who Telus’ 2007 acquisition of Emergis, Telus
Telus Health
agreed with the statements shown. Health provides IT solutions to Canada’s
While one in three respondents said healthcare industry
their senior management team does

not even know what a platform SK Telecom acquired data security solution
provider Infosec in 2018 to prepare for
business model is, more than 70% expansion into 5G services for autonomous
said their companies are developing SK Infosec driving, smart home and smart factory; SK
network and IT systems with the Infosec is South Korea’s biggest data security
expectation they will support platform solution provider with around $175 million in
annual sales
business models in the medium to
long term. TM Forum, 2019
Section 5
Make it happen – Strategies for
developing 5G business models
5G networks will be built regardless of whether mobile operators develop new business models
and lines of business. The next generation of mobile technology is needed to support the
continuing demand for mobile broadband services and growing traffic levels. However, new
business cases (or lack thereof) can impact the speed of deployment and prioritization of
coverage.
In addition, 5G is a loose term. Many of the new business models covered in this report require that communications
service providers (CSPs) adopt network virtualization and software-defined networking and move their IT systems to the
cloud. While most CSPs include this digital transformation as part of their overall 5G strategy, they are not necessarily one
and the same.
Following are some steps CSPs can take today to ensure monetization of 5G:
Appraise competences Embrace wholesale Don’t dismiss connectivity

Many 5G use cases will require CSPs often talk about their role as Some CSPs will be able to survive, and
specialized competences and enablers, but many are unclear about indeed thrive, by becoming best-in-
capabilities that few CSPs possess. where this capability resides within the class 5G connectivity providers. Many
Skills in software development, systems business. Logically, enablement means observers perceive connectivity as a
integration and professional services wholesale, but within most CSP commodity and suggest that
are essential for delivering large IT organizations the existing wholesale diversification is required for
projects, whether they include business is not set up as an engine for profitability. This may be true for
connectivity or not. CSPs either need growth. Wholesale departments manage incumbent CSPs with mature fixed,
to acquire these skills (many large traditional interconnection, roaming and mobile and broadband businesses, but
operators are, indeed, building strong settlement functions and look after the others can leverage 5G to enter the
professional service capabilities) or be mobile virtual network operator (MVNO) fixed broadband or enterprise
willing to forge strong partnerships business. connectivity business because 5G
with specialists – unless, that is, they offers huge improvements over legacy
prefer not to take a use case-driven But most CSPs seem to prefer the retail communications networks in terms of
approach to 5G and focus instead on business. For example, carrier billing, cost, flexibility and elasticity.
becoming a best-in-class connectivity which is strictly a wholesale service, does
provider. not typically sit within the wholesale
division. Similarly, monetization of
application program interfaces (APIs) – a
line of business which could sit within
wholesale – tends to sit within the retail
division. CSPs should elevate the
wholesale division and convert it into a
digital services enabler.
Section 5
Consider acquisitions Prepare for 5G disruption Learn about platforms

The odds are stacked against CSPs that In the consumer market, multi-play and The survey we conducted to support
want to deliver 5G services based on bundling has been the preferred this report points to a lack of
use cases in vertical markets. When It strategy for CSPs of all sizes, but 5G understanding within CSP board rooms
comes to perception and expertise, threatens to disrupt multi-play – or at about platform business models.
mobile operators sit a long way behind the very least make it much more Indeed, developing cloud-based
vertical market specialists (think, John competitive (and less profitable). 5G’s platforms to support end-to-end
Deere or Cargill in agriculture) and performance promises to be the same services or marketplaces for consumers
multi-vertical systems integrators and or better than performance achieved and enterprises requires software skills
professional services firms like through digital subscriber line and fiber that most CSPs don’t have. Many CSP
Accenture, IBM and Infosys. So, if a facilities, which means ‘cord cutting’ is executives may believe that it’s simply
CSP aspires to become an ICT or likely. Customers will be able to not practical to deliver these types of
internet of things (IoT) provider in a abandon fixed-line services in favor of services.
specific vertical, acquiring a firm in the mobile, positioning mobile operators
right country or region may be that have been left out of lucrative But that doesn’t mean that operators
essential. local broadband markets as formidable can’t participate in platform businesses
challengers to wireline providers. through partnerships with third-party
providers. They can and should seek
out opportunities to partner as
platform enablers, particularly as they
deploy 5G in the core network and can
deliver differentiated connectivity
services. Given the profound impact
platforms are having on businesses
across all sectors, doing nothing and
ignoring them represents a dereliction
Integrate decision-making
In successful digital organizations, Make premiums stick of duty for any CSP executive.
technology and business decisions are In early 5G launches, CSPs have been
so closely aligned as to be inseparable. positioning 5G as a premium service,
Technology is used to create value for but if history serves as a guide, prices
the business. This is not the case with will drop as soon as competition heats
most CSPs. up. But 5G should carry a premium
Technology tends to be carved off into because its performance matches fixed
IT and network divisions and is broadband.
managed as a cost item, while the rest To sustain premium pricing, CSPs
of the organization is set up to sell should build strong content bundles for
technology that is deployed. Smaller, 5G, potentially including non-digital
multidisciplinary teams with customer- benefits such as discounts on physical
facing responsibilities are needed to goods. For example, UK operator O2
understand what customers want from has a long-running loyalty program
5G and then to play an active role in called O2 Priority that offers discounts
delivery. on many goods and services, with a
special relationship with music and
concert venues.
Section 5
Allow for experimentation Merge networks and IT

In addition to merging networks and IT, Why would a CSP deploy cloud-native
CSPs must adopt an Agile DevOps capabilities within the network but not
culture that allows for experimentation. extend the power of those capabilities
Digital-native companies often stress to customers? This is the risk operators
the importance of being allowed to fail face if they continue to manage
fast as they seek to develop new network and IT divisions as separate
capabilities. Software developers organizations.
working for Amazon and Google use
DevOps practices to create new CSPs should be single-minded in their
services rapidly. If the services succeed, pursuit of delivering a better digital
they’re monetized; if they fail, they’re experience for customers, and this
abandoned, and the team moves on to includes giving them self-service
develop the next new service. capabilities. Operators must combine
software-defined networking with
Within CSP organizations allowing for cloud-based IT systems to deliver
failure requires cultural change, but it intelligent connectivity services. The
also relies on having the right digital TM Forum Open Digital Architecture
systems in place to test a new service (ODA), part of the Open Digital
or functionality and then quickly roll it Framework (see page 34), provides a
out or abandon it based on the results. functional architecture that operators
As CSPs begin to deploy 5G, they need can use for end-to-end management
to have a network and IT architecture and orchestration of 5G and other
in place to confidently try out new digital services.
services.
Additional features and resources
26 | Overcoming the challenges of monetizing 5G investments with new
Digital Services
29 | Move over passive platforms! Make way for ‘ACTIVE’ Platforms
34 | TM Forum Open Digital Framework
35 | TM Forum Research reports
36 | Meet the Research & Media team
Overcoming the challenges of
monetizing 5G investments with
new Digital Services
Over the last few years, the Telecom companies have experienced diminishing returns due to
market saturation, price competition and the rise of over the top (OTT) competitors. Their
traditional revenue generating services like SMS based messaging services or voice calls have
been almost killed by players like WhatsApp.
On top of that, premium SMS based

VAS services from partners have died
with the shift in IP and App based
delivery models of those services.
Obviously, data revenue has been
increasing for most of the operators
around the world with the move to
better network technologies – from
3G to 4G/LTE and now with 5G.
Over the last 12 months, lot of
enthusiasm has gathered around 5G
and experimental roll-outs are
happening, but, very few operators
seem to be absolutely clear about
how to improve their revenues with
the new 5G investments. With 5G,
there are new technical enablers like
higher speed, lower latency, and
network slicing helping specific use
cases - streaming video and AR/VR
apps with high speed; drones,
connected cars & remote surgery
with low latency; network slicing can
bring in QoS differentiated offerings
targeted to different application and
business segments. The ability to
support massive amount of We, at Tecnotree, with 40 years of risks. Partnering with companies who
simultaneous connections at lower global telecom experience, believe provide new-age digital services is
latency will also support varied IoT that the future monetization models definitely the option that the
use cases and applications. The real will be based on the current pillars of operators can think of. It demands an
question is to find out what will be strength of the various players: ecosystem to be in place with which
the killer applications and services Customers (Consumers & continuous innovation from the
which will help the operators to Enterprises), Operators and Partners. market can be brought in front of the
monetize their investments. Key operator’s subscriber base for faster
In a situation, where the next go-to-market and adoption. This is
question is that whether there will be
winning digital services are yet quite different from the traditional
new value chains emerging to
unknown, it is quite difficult for approach of doing business with
support new business models
operators even to start building partners from an operator’s point of
enabled by 5G.
those by themselves and take the view.
Currently, it takes a long time to As such, there should be a natural would require the whole customer
integrate & roll-out partner offerings tendency between all the players to domain applications to behave in a
to the market through the operator’s come together and work towards new-age Digital manner, in contrast
own channels and Business Support benefiting from the capabilities of to legacy systems.
System (BSS). Once a partner is new 5G networks. Consumers &
selected, the offering needs to be Enterprises are looking forward to 2. Digital Platform: Along with the
created in a product catalog with great new services brought to them product capabilities, we believe that
configurable pricing parameters, to enrich their life and automate operators can build a strong platform
bundling options and service their business, while Digital Services business based on certain key APIs
configuration parameters in order to and App providers are experimenting being opened up for consumption by
provision the service for a customer. with new services and hungry to partners – be it KYC/Customer
Next is to integrate billing and reach more and more customers, and profile APIs to partners for validation
subscription management systems Operators have the reach, network of customers, or be it billing and
for invoicing, collection & settlement and infrastructure to sell, provision, invoicing APIs to allow new
with the multiple partners in case of charge & bill for the services from businesses like Billing-as-a-service or
a complex multi-party offering. Once the subscribers. Invoicing-as-a-service for SMEs.
it is launched, apart from the needs Additionally, many operators who
to offer an omni-device self-serve The speed and agility required to have successfully implemented
application for consumers, the compete in the marketplace and to Mobile Money services can open up
operator’s sales agents would also bring great consumer experiences their Mobile Money Wallet APIs for
need to know about the new with new services mandate a very partner integration. Today’s killer
services, pricing and offers. They also efficient and effective Digital BSS apps like messaging when
need to be educated about how to system that can help the operators successfully deployed across
sell the non-traditional new to build an ecosystem for digitally geographies by an operator group,
Digital/IoT services. Traditionally, connected communities and can also be tomorrow’s super-app for
with a very limited number of new empower them. The key focus of performing various transactions over
services launched, the operators such a Digital BSS system would be messaging interface. The operator’s
tried to manage it with minimum on the following: can also create new businesses by
changes in the existing BSS system. exposing and metering those APIs for
1. Digital Products: In a 5G world, consumption by partners.
However, even if this approach has
the BSS needs to have capabilities
worked to some extent in the past
required to provide a self-onboarding 3. Digital Delivery & Operations:
with a very limited number of
system for the partners to register, While it is important to build new
partners, it has become a major
create offers and push those to the functional & platform capabilities to
challenge for the operators to roll-
operator’s product catalog for address the ecosystem needs, it is of
out new digital services on a
bundling and propagating to all sales utmost importance to remember that
continuous basis with more and more
channels. The product catalog needs agility and speed are key to building a
partners.
to understand, capture and customer-focused ecosystem. The
Also, looking at it from a new Digital propagate the provisioning speed of introduction of new services
services partner’s viewpoint, it’s parameters for the service offering has to match the likes of the
always a go-to-market challenge for and seamlessly enable catalog driven Facebook’s and Google’s of the world
those companies who are bringing order fulfilment. Idea of a single – which means CI/CD to be
innovative new services to the customer identity is extremely deployed, features, functions and UX
market. It also takes time to partner important across the services, since to be A/B tested and continuously
with an operator due to their lower traditionally customers have been improved for better customer
risk-taking appetite as well as limited identified by the service id/MSISDN experience and also understanding of
expertise in the new areas of number in a typical CRM system. customer behaviour to make data-
business. However, such start-ups or Having a single customer profile and driven decisions based on AI & ML.
new age companies are typically id, allowing multiple services from Containerisation of the software stack
hungry for new business and would both the operator and partner to be plays a vital role in that for providing
welcome faster go-to-market associated with the customer, to rolling software upgrades with zero
partnerships with operators, as they manage periodic subscriptions, try & downtime and self-healing
have a huge captive audience. buy models, target, re-target capabilities.
customers for new services sales,
5G based new network capabilities faster than traditional telcos and have only a few are trying out new
will also bring in a new opportunity the right software play to make all this innovative business models. We have
for MVNOs to succeed in their vision happen. been working hand-in-hand with our
of becoming the AirBnb’s and Uber’s key customers globally to help them
of the telecom world, whereby they Tecnotree understands both the Digitize and Transform their IT
would not require the infrastructure opportunities and challenges faced by systems with Tecnotree Digital BSS
or the services to make a business out the operators with the new 5G Suite 5 which not only addresses the
of it. They need to just focus on investments. In absence of a clear operator’s need for Digital
creating an ecosystem with partners business model for the new huge Transformation, but also helps in
which delivers the best new investments, many of the operators creating an ecosystem with partners
consumer experiences to the market, are in a wait & watch mode, while to create new monetization models.
Move over Passive platforms! Make
way for ‘ACTIVE’ Platforms
In “Active” platforms, a communications service provider (CSP) creates additional value to the
actors on its marketplace and to the end consumers of the goods or services on offer. Such
additional value is offered through orchestration of the CSPs own core assets, processes and
functionality, with that of the market actors’ goods or services thereby significantly enhancing
the overall value to consumers. CSPs that actively enrich various elements of the value chain
are able to create a strong network effect, disrupting established industries and entering into
entirely new business models.
This stands in stark contrast to a n API-enablement services – Enterprise Mobility enablement,
“Passive” platform, which is a limited whereby a CSP, API-enables a etc
marketplace offered by a CSP, where marketplace actors’ core
the market actors can buy and sell capabilities. Examples: Inventory, n CSP’s could also consider offering
goods or services and conduct Customer Profile, Dynamic Pricing, turn-key B2B “as-a-service”
commercial transactions. There is no Order Management, Service propositions to the market actors.
added value or “enrichment service” Management, Trouble Ticketing, Examples: Billing-as-a-service,
offered by the CSP. Such platforms etc. CRM-as-a-service and even
are likely to lose out over a period of “Digital Transformation as-a-
time, as they are perceived to be a n Offering own products and Service”.
mere “yellow pages” directory with services to demand-side and
supply-side participants. Examples: Progressive levels of digital
search and match algorithms.
Secure API Gateways, Cloud opportunity for a CSP to enable
Following are some examples of enablement, SaaS-enablement, etc. Active Platforms is shown below:
enrichment services CSPs can offer Also, core telephony services such
to enable an Active platform: as Messaging, Location services,
Business models are “the design or design and operation of the various
architecture of the value creation, elements of the value chain”
Future Business Models
enabled by 5G: delivery and capture mechanisms
Before we look at future business employed. The essence of a business
models, it may be useful to have a model is that it crystallizes customer
common definition and understanding needs and their ability to pay, defines
of a “business model”. As per the the manner by which the business
definition given by Teece D.J. enterprise responds to and delivers
("Business Models, Business Strategy value to customers, entices customers
and Innovation", Long Range Planning,): to pay for value, and converts those
payments to profit through the proper
Keeping this definition in mind, we n IoT device manufacturers, and manufacturers listed above and
could look at some of the “active” enriches this offer with its own
platform business models CSPs can n IoT platform vendors, communications infrastructure. Such
offer immediately: a solution provides best-of-breed
System Integrators,
combinations of goods and services,
n
1. IoT-Centric Smart City Platform helping governments launch Smart
Cloud service providers,
IoT-centric solutions offered by CSPs
n
Cities faster. To offer variety, scale
allow core network capabilities to be n Communication infrastructure and flexibility, an IoT-centric Smart
monetized as a bundled B2B offering. providers (5G), etc. City platform offered by CSPs caters
Enriching it with an “Active Platform” to different types of demands and
business model can further aid value- CSPs can choose to bid just for the
budgets. A typical IoT-centric Active
creation. connectivity bit by offering a
Platform for Smart cities, offered by a
dedicated 5G network infrastructure
CSP would look like the below image:
A typical initiative where such a for this initiative or play a much
solution applies is a “Smart City” bigger role of an “Active Platform”
project. For an initiative of this provider. Through an Active Platform,
magnitude, a government entity will the CSP is able to put together the
need to collaborate with the following entire Smart City solution in
types of participants: collaboration with third-party vendors
Smart Surveillance Emergency

System Providers Services
Electronic
Independent App Technicians
Developers PARTNER ENABLEMENT
SERVICES Smart Home and
Building Manufacturers
Recycling and Waste
Management Experts 5G Network
API-enablement Billing Smart Grid
as a Service Manufacturers
Smart Parking
Providers Telco-powered Order
AI and ML
as a Service
SM ART CI T Y Management
Traffic Management
ACTIVE PLATFORM Solution Providers
Smart Energy Security

Providers Cloud and Infra Solutions
Services City Planners
IoT System
Integration
Analyticsasa
EnergyManagement Service IoT Platform Government Data
Solution Providers
Source Providers
Public Transportation Smart City Solutions

Providers Startups
Smart Sensor
Manufacturers
A Digital Marketplace can be fairly Most building management software guests. The company is constantly on
easily incorporated into a CSP’s packages available in the market today the look-out for cutting-edge travel
existing IT landscape as shown in the are not designed to inter-operate with technology ideas and collaborates with
diagram above. The examples of existing technologies such as access a number of start-ups to provide
demand-side and supply-side doors, alarm systems and identity personalized, creative solutions to
participants, the goods and services management systems. Though IoT enhance guest experience.
shown in the diagram are just a subset platforms exist to address this problem,
of entities and offerings in the digitally significant System Integration work is Some of these start-ups are working
connected ecosystem. CSPs can required to get them to interoperate with Hilton to build a state-of-the-art
choose to on-board any number of robustly. This represents an building experience solution for
participants: service providers, opportunity for CSPs as it lends itself Hilton’s existing and new properties.
government agencies, freelance to an active platform business model. These startups could use the Smart
communities, foreign collaborators, The vision of a Smart Building Digital Building Digital Hub to connect
start-ups, product vendors, IoT Hub, powered by a CSP, is shown in standard and non-standard building
companies etc. thereby delivering not the diagram below: devices and to access building data in
only utilitarian value in-terms of real-time. Using such an Active
efficiencies created, but also superior A CSP will provide a smart “Building platform and the APIs offered by the
user experience and the ease of doing Management Digital Hub” as depicted hub, a startup can provide tailor-made
business. above, through an Active platform solutions by creating devices with
model, consisting of a toolbox of assets Open APIs and Analytics.
2. Smart Buildings Digital Hub offered to the platform actors and end-
consumers, by integrating its own core The CSP on its part will provide the
CSPs can consider offering “building
offerings with that of the participants’. required tools and services for
management in a box” to facility
This bundle will include frameworks integration and on-boarding onto the
managers of large building
powered by APIs and Microservices in platform in an easy manner through a
establishments such as corporate
order to fulfil end customer simple drag-and-drop user interface,
offices, hospitals, airports, etc. Such a
expectations. using rich visualization tools that
package will typically include IoT
enable the entire project to emerge in
devices, building management
Now let’s examine Hilton hotels as an front of the customer’s eyes. The
software, Smartphone Apps, etc. along
example to see what the customer marketplace will also offer the CSP’s
with installation and setup services
journey will look like. Hilton, as we core infrastructure capability to the
offered through certified technicians.
know, leads the way in developing participants, such as dedicated
game-changing technologies that networks, industrial Wifi setups, etc.
enhance travel experiences for its
Consumer Community
Facility Managers
Building Constructors - Hotels, Hospitals, etc
Building Security Staff
Energy Auditors
SM ART BU I LDI N G DI GI TAL H U B
Third-party BMS Device Manufacturers Enriched by Third-party Providers
Independent Technicians
Digital Marketplace
(Powered by Digit Market)
Enterprise Software Vendors

EcosystemAccelerators Core Telco
Provided by Published by
Capabilities
Telco Provider Community
Repository of Pre-configured Building Smartphone/Tablet 5G / 4G dedicated Networks
Management APIs Apps
Provider Community
IT Services for Wifi Infrastructure
Application Integration Reference Data
BMS Startups developing innovative Apps
Configurable Microservices forz Connectors & APIs for
Mobile Device Management
Third-party BMS Device Manufacturers
common BM use cases Legacy Devices
Electrical System Integrators QoS Guarantee
Adapters to common third-party Reusable Rules
Sensors for BMS
Third party HVAC Manufacturers Messaging Services
API Gateway and Rules Engine for
BMS Microservices
Lighting vendors Partners to API-enable Legacy
IoT Platform
Edge Gateway Manufactures Connectors for ERP
Billing, Order Management as SaaS
Software
Legacy Device Manufacturers
Enterprise Software Vendors
CSP’s Smart Building Active Platform
Accelerating your path to
Active Platforms
Torry Harris provides enterprises with a
ready set of tools & services to easily
create and manage active digital
platforms. This marketplace-in-a-box
product, DigitMarket™, helps create a
secure channel to share and monetize
data, allowing businesses to become
platform enablers, grow profitable
partnerships and build new channels to
market. The components of
DigitMarket™ are as opposite.
DigitMarket™ allows easy onboarding

of partners, curation of content, and
can function as a marketplace for both
physical and digital products (such as
APIs) for enterprises and its partners.
The product is vertical agnostic
(although vertical templates are
available) and can be white labeled to
allow enterprises flexibility in how they
want to market their platform.
DigitMarket provides a cost-effective,
viable solution for enterprises to
quickly build and scale a digital
platform rather than building one from
the ground up.
For more information, visit:

www.thbs.com/products/digitmarket
TM Forum Open Digital
Framework
Delivering the tools to go from concept to cash in just 18 days

The TM Forum Open Digital
Framework is an interactive,
continuously evolving collection of
tools, knowledge and standards
that give communications service
providers (CSPs) an end-to-end
migration path from legacy systems
to modular, cloud-native IT
components. Simply put, it is a
blueprint for service providers to
deliver intelligent operations fit for
the 5G era.
A prototype version of the

framework is available now for TM
Forum members to explore. It is
being developed through the TM together with standards simplifies and de-risks
Forum Collaboration Program and maximizing the potential of AI to transformation projects
Catalyst Program, and builds on the enhance customer experience
success of the Forum’s established and increase operational The goal of the Open Digital
Open APIs and the Frameworx efficiency Framework is to help service
suite of standards. Specifically, it providers increase agility and
includes: n Reference implementations – a drastically reduce the development
framework for assembling and cycle for products and services
n Open Digital Architecture (ODA) validating ODA components in from 18 months to 18 days. Much
– an enterprise architecture the Forum’s Open Digital Lab, of the collaborative work that is
blueprint, common language and fostering the creation of a part of the framework is already
key design principles for modular, services marketplace available, but it helps to organize it
cloud-based, open digital and make it more accessible. The
platforms that can be n Practical guidance – guides and framework is a work in progress
orchestrated using AI videos showing how the Open and will improve through
Digital Framework can be used crowdsourcing.
n Open APIs – 50+ standardized to transform the core business
REST-based APIs to facilitate and enable new business growth If you would like to learn more
zero-touch integration and zero- about the project or how to get
touch partnering n Foundational libraries – involved in the TM Forum
normalized models providing a Collaboration Community, please
n Data & AI standards – an common language for business contact Andy Tiller.
industry-agreed data model, processes and information that
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5G FUTURE: BUSINESS

MODELS FOR MONETIZATION

Additional features and

Who are the Future business model survey respondents?

How opmisc are CSPs about the future?

Where will revenue come from?

20% 20.5% 15%

33% 21% 42%

We asked this question in a more Despite the general tone of optimism,

What should CSPs aspire to become?

Read the latest Digital Transformation Tracker report:

Connecting things rather

TM Forum, 2019 (recrea on of SingTel graphic)

New partnership models

networks could be a viable alternative

to compete with cable operators for

home and small business broadband,

It’s not clear whether spectrum Mobile operators use

abundance and liberalization will

fundamentally change the mobile

sector, but there is already enough

allocating huge amounts of new between 9 a.m. and 4 p.m. Monday

Although they are making progress Promises of edge compung

that use network slicing. But it would

seem likely that they will be able to use

customized private network solutions.

Today, most businesses pay their mobile

SIM basis, much like consumers, but 5G

and network slicing should allow for

usage-based billing that considers many

Fixed wireless access 41% 39% 20%

Virtual and augmented

enhanced mobile broadband with compete in terms of bringing new

Gaming needs help from CSPs

Unlimited pricing Comparison of early 5G pricing plans

always treated ﬁxed and mobile

countries, ﬁxed broadband usage is

Mobile broadband prices, on the

generally failed, to sustain a price

But this is changing. The table

opposite, which shows 5G pricing

a drift towards unlimited data pricing

include caveats and exemptions. $63 100GB

Further analysis of operators’ 5G

$45 Unlimited Speed 600Mbps

n All launches include unlimited voice

Maximum speed 10Mbps

In most markets 5G is available only

buckets, and in some cases it is

n Most early entrants are pricing 5G

n Some operators are bundling

Another aspect of convergence in the

In the next section, we’ll look at how

CSP revenue from B2B services

Now Medium term Long term

Early 5G deployments target consumers and B2B simultaneously

Divergence and diversificaon away from core competencies

intrinsically linked with cloud understood, how to manage slices

enterprises will not be interested in 12).

How opmisc are CSPs about the future?

Although they are making progress Promises of edge compung

Divergence and diversificaon away from core competencies