The 5G wave and the 'Customer', the promise of profitability
Rory Meffen | Today 11:28 AM | 3 Views
Given the excitement and promises of 5G having visited #MWC2017, it is hard not to get caught up in the wave of anticipation of new services offerings to the market. The 5G buzz is here to stay but is the current vision is flawed? Have we prioritized capacity for tomorrow over customer engagement experience now? It's easy to raise economic questions, because users may not value the higher data rates that are promised and may not need the higher 5G capacity forecast. Will technological advances in capacity be sufficient to realise the new service visions and the case is still out, as many operators are insufficiently profitable to afford it. The unit cost of 5G network will decrease of course when the volume of services increases or when combined with bundled service offerings, promoting positive externalities. The question remains, will service margins prevail for current and 'Value Added Services' if the 'Utility' ( the value a user derives from a network service ) is not derived for the subscriber and economic rationality does not equate to that 'Utility'. 'The sum of subscribers 'Utility' for all subscribers in an operator minus the cost of 5G (while maintaining other networks), is a gamble on attaining profitability. We can watch as disruption in the market evolves around 5G advances (Reliance Jio) where market share in a 5G world, is defined as the percentage of data share, within a given market.
There is an alternative vision in the near term where Operators focus on consistent subscriber quality of service and customer engagement excellence to drive acquisition and retention over more dollars on capacity for tomorrow to drive profitability.