PARTNER FEATURE: As attention turns to 5G’s evolution and development, Denis Depoux, Global Managing Director, Roland Berger, highlights the technology’s potential in leading a digital shake-up across industries.
At Huawei’s 11th Mobile Broadband Forum in Shanghai, attention turned to the evolution of 5G and how the leaders in the mobile sector are now looking to sustain growth of the technology while enabling a robust ecosystem through cross-industry collaboration.
Speaking at the event, Denis Depoux, Global Managing Director, Roland Berger, put the focus firmly on industrial digital transformation, an area where he believes the technology will thrive to not only enable new, lucrative use cases, but facilitate the use of the technology in numerous different sectors.
Indeed, in the COVID-19 era, digital transformation across industry has become crucial for businesses to continue to operate, with Depoux remarking that a global crisis such as the current pandemic has been “a wake-up call” for companies to take digital more seriously.
“Suddenly, you realise that communication channels, supply chains, infrastructure, were not really resilient to such a crisis,” he noted.
However, with the world – along with consumers, citizens, and businesses – being forced to operate in a new way, the pandemic has had at least one upside, and that is to advance digitalisation across the board.
“[COVID-19) is doing much more for digitalisation than state leaders, corporate leaders, or consultants, because you’re either digital or you get lost,” said Depoux. “For the next few months, the question of resilience will be put on the table by shareholders, and by authorities… digitalisation is the response. But it’s not only about one technology, it’s about covering the full value chain.”
The industry opportunity
More than 18 months has passed since the commercial launch of 5G, and operators, vendors and corporations are now looking beyond initial enhanced mobile broadband use cases, to what else the technology can offer.
Depoux noted that the ICT industry itself was preparing for more consumer cases around volume for video for example, and there were use cases emerging that focused on the combination of both mobility and massive connections of industrial objects, which would “justify 5G and generate a good return on investment”.
However, there is now also added hype around the technology’s use in industry, which was a hot topic of discussion even before 5G launched. Roland Berger China believes the next-generation of mobile has the potential to power digital transformation across a broad range of sectors.
For example, the company sees vital use cases emerging in the mining industry, as well as in oil and gas.
“Some attempts are being made in the fracking industry, in oil, shell and gas industries, noted Depoux. “These will attempt to use 5G because drilling has to move from place to place, so mobility is important and obviously, this needs massive amount of data and fast processing to optimise drilling, and optimise operations as well.”
Depoux however adopted a caution tone, adding these solutions were still in the early stages.
Providing some context on industrial efforts to adapt businesses in the past, Depoux said there was “quite some disappointment” in the last few years, as digitalisation had not yielded the returns expected.
He explained that in some cases companies wanted to scale-up their digital approach, but there was a start-up mentality to this, which led to hurdles.
“Other scenarios we saw was massive production of data through industrial IoT, especially from new factories or new machines in existing factories, machine tools producing a huge amount of data, but no capability to process that data and make something out of it.”
5G can however make the difference, by connecting all these objects and enabling large cloud computing processing of this data to solve that issue. And 5G, Depoux believes, can also usher in new cases, such as the use of robots in logistical warehouses and ensuring assembly plants can be connected with high-speed and low latency, linking together a large number of objects and enabling interaction with each other.
“That’s the typical use case of 5G, as opposed to existing technologies that do not have the speed or mass connection that is needed,” said Depoux.
So what needs to happen to enable widespread industrial digital transformation through 5G? Well, the Roland Berger executive pointed out that widespread transformation does not necessarily come with advancements in technology, but by an internal analysis of what is needed and what the customer is willing to invest in.
“What are the opportunities for enhanced productivity or efficiency? What can be automated to decrease costs and labour, or to simply improve safety? It doesn’t start with technology, it starts by identifying very concrete use cases and that may not even need to spread to a whole company, maybe just one side, or one workshop within a site. That can represent the lighthouse project, that can demonstrate the case that can gradually scale,” he said.
Operators hold the edge
So, industry and industrial use cases alike will play a key role in the advancement of 5G. But, where do mobile operators fit into the piece?
Depoux rightly highlighted the fact that the first role of the operator, which may sound obvious, was to deploy the infrastructure and be ready with the equipment and the software required.
But, there was also now an expectation for them to go beyond this traditional function.
“It’s not only the infrastructure, it’s also helping the client develop a very adequate solution. And this is quite difficult because it’s the total opposite of standardised products. Even in the B2B world, our observations as consultants are that every use case is quite different.”
He continued to state the operator role was indeed evolving, and they had a requirement to think about different industries when planning and developing solutions that do not need to be standardised.
“It needs to be adequate enough to incentivise the industrials to actually go a bit further and explore solutions and adopt, which is a key hurdle, simply because we are talking of something quite new, and not fully demonstrated.”
Despite this, providing the network capability is of course one of the operator’s main priorities in the 5G era. However, could private mobile networks, another touted 5G use case, mean operators eventually lose their status as a default service provider?
Roland Berger China doesn’t believe so. Depoux said alternative providers could well deploy private networks in a certain site, developing a specific use case, but an operator’s overall scale means they will still hold the edge.
“Without the scale, you need to replicate such a solution across multiple sites, multiple locations and develop a different business model. The dominance of mobile operators could be partially challenged by vertical operators and that can happen. But, at the end of the day, if you look at other industries, such as utilities, there’s a premium to scale. When more solutions are deployed and standardised, the more scale matters because it will drive costs down.”
Huawei leading the orchestra
Moving from operator to vendor, Depoux believes companies like Huawei have numerous roles to play, and it all starts with the actual development of the technology.
He said bringing the technology to the fore was the first challenge, and there was now a need for it to be optimised and gradually bring the price down to converge with the cost of 4G, which was “really quite paramount for B2B use”.
The second role vendors need to play is to essentially lead deployment and identify how the technology can be used across different sectors, again reiterating the importance of data and ensuring it is processed and analysed across each part of the organisation to make it valuable.
“Vendors need to play the role of conductor, because a digitalisation project is like running an orchestra. You have different instruments, and they all need to play the same music,” concluded Depoux.