The multi-faceted promise: 5G adoption by enterprises set to pick up pace

India’s first 5G-connected ambulances will begin service this month, bringing to life a use-case that can save critical patients. The “smart ambulances”, powered by Airtel and Reliance Jio’s 5G networks, will allow real-time streaming of patient health data to hospitals, enabling doctors to advise paramedics in ambulances on the move to administer the required medical aid.

Apollo Hospital, which has partnered with Bharti Airtel and Cisco, plans to deploy 15 such connected ambulances in Delhi, Chennai and Hyderabad later this month, and a total of 200-300 by March 2023.

Emergency service provider Medulance Healthcare, in a tie-up with Reliance Jio, will also launch its 5G-connected ambulances in Delhi this month. Company co-founder Ravjot Singh Arora says the plan is to upgrade the entire 7,500-plus fleet by December 2023 if the 5G network rolls out as planned.

Anticipating the spread of the 5G network, telecom service providers are tying up with companies to demonstrate the technology’s benefits in diverse areas -- from agriculture to automobiles, and drones to delivery services.

While pilot studies and proof of concepts of enterprise applications are underway, experts say that the early adoption of 5G use-cases will be consumer-led. They point out that India has to build its own use-cases, as every country has its own particular requirements.

The health care use-case in 5G-enabled ambulances is perhaps the only one that will start using the technology in an enterprise scenario in the immediate future.

“While the pandemic-led prioritisation of organisations towards sustenance has had a role in delaying 5G adoption, high initial deployment cost of 5G and the availability of devices have been other key reasons for the slow adoption,” says Purushothaman KG, partner and head (digital solution and telecom), KPMG India. “In the initial years, the heavy cost of 5G deployments made investment cases unviable with very low visibility on return on investment.”

He is hopeful for the future, though: With 5G deployments gaining scale and the ecosystem gaining maturity, “we are seeing the uptake increase gradually. We expect the global 5G enterprise to grow by a CAGR of over 30 per cent in the next few years.”

B2C segment to the fore

Within India, KPMG expects communication service providers to carry out aggressive 5G rollouts until mid-2023, although it will be the B2C segment that gets the ball rolling.

“The service providers would be keen on fine-tuning their operations with respect to radio signal coverage and virtualisation of some network functions for the enterprise space,” KMPG said in a recent report. It believes private 5G deployments will pick up from mid-2023.

This is why telcos are making an effort to persuade enterprises to look at 5G in a more strategic way.

“We continue to be in active conversations with customers across industries on identifying opportunities where 5G-based solutions could deliver business value. We are seeing interest across sectors, specifically in manufacturing, construction, automobile and smart cities,” Vodafone Idea (Vi) said in an emailed response.

Vi, which is yet to announce its 5G rollout plan, demonstrated use-cases on real-time remote supervision of construction sites, smart mobility and autonomous, guided robots at the recent India Mobile Congress. Reliance Jio has carried out trial runs of over 25 applications, ranging from 5G-connected drones to robots that can be used in warehouses or hospitals.

“From a consumer perspective, enhanced mobile broadband and fixed wireless access are expected to be the early use-cases for 5G in India. These will help address the concern of limited fixed broadband penetration and improve data experience while on the move,” telecom gear maker Ericsson said. “For instance, a 4K video on a smartphone, augmented reality/virtual reality (AR/VR) and mobile gaming applications will benefit from 5G capabilities such as ultra-low latency and ultra-high reliability. Over time, we expect more enterprise-related use-cases to come up leveraging 5G benefits in sectors like manufacturing, healthcare, education, etc.”

A Reliance Jio executive says small and medium businesses (SMB) present a unique opportunity: “There are small distributors or warehouses or diagnostic labs which can get connected with other players in their ecosystem, bringing better efficiencies.” SMBs will also be quick to adopt 5G-connected cloud-based personal computers. Use of AR/VR for training purposes is another promising area.

“The maximum number of queries that we have received is on the use of AR/VR applications in training,” the Reliance Jio executive adds.

Revenue game

5G services were launched on October 1. As companies race to activate sites and increase network coverage, Airtel has switched on the service in eight cities and Jio is carrying out beta trials in four.

Over 200 communication service providers have launched 5G services globally, and the number of subscribers was 690 million as of June. North America and North East Asia have the highest 5G subscription penetration. The vast majority of 5G revenue is currently consumer-led, and enterprise revenue is a subset of that. However, the revenue contribution from enterprise 5G is a mere 4-5 per cent globally, according to reports.

Even so, service providers are upbeat about 5G. “We are very excited with the possibilities that we see ahead of us in industry 4.0, healthcare, education, agriculture, and e-commerce,” says Ajay Chitkara, CEO of Airtel Business, the company’s B2B unit.

An EY report says 70 per cent of enterprises in India are expected to make the highest investment in 5G in the next three years, compared with other emerging technologies. Smart manufacturing, immersive content and cloud gaming will be the top 5G use-cases, the report said.

Increased investments by corporates are also expected to change telecom companies’ revenue mix. Currently revenues are largely from the consumer mobility space while enterprise revenue is a small part. But that may change. “Within enterprise there could be bigger opportunities from managed services. Revenue will not grow from connectivity alone but from services. These could be from drones or data as a service,” the Reliance Jio executive reckons.

Airtel is advancing its capex spend this year as it accelerates its 5G rollout. The company plans to cover the entire country with 5G services by March 2024. And Reliance Jio has announced its intention to invest Rs 2 trillion on its 5G network.

The deployment of 5G service will require enhanced fibre to support backhaul networks for high bandwidth and speed. But connecting telecom towers to fibre networks remains a challenge.

In addition, “new partnerships and collaboration models need to be forged by telcos with other industries to scale 5G adoption at an enterprise level,” reckons Saurabh Kumar Sahu, managing director and lead – communications, media and technology, Accenture in India. “Skilling the workforce will also play a critical role in its adoption. As prices of 5G-enabled smartphones reduce, we expect wider adoption of 5G in the next two to three years in the consumer segment.”