Despite a significant increase in mobile subscribers and mobile data traffic, overall revenue growth for mobile services has slowed. From 2016 to 2026, the global average projection for CSP service revenues is only predicted to expand by 1.5 percent each year. While this provides a consistent and significant revenue stream, traditional revenue growth is limited compared to 5G-enabled revenue growth potential in industry digitization and IoT.
CSPs are actively rolling out plans to ride on the 5G economy to achieve an advantageous foothold in the 5G value chain, as 5G generates unparalleled prospects for individuals, businesses, and society. Meanwhile, CSPs deal with the growing complexity and diversity of telecom and non-telco client demands for products and services. When evolving into digital service providers, CSPs must be agile, innovative, and constantly focused on the customer experience (DSPs). The need of the hour is increased operational agility and rapid market with cloud-native solutions that include BSS applications.
Why 5G monetization?
“5G will enable $13.2 trillion of global economic output in 2035. This number is equivalent to US consumers spending ($13.9 trillion) and the combined overall spending by consumers across Japan, Germany, China, France, and UK ($13.4 trillion) back in 2018” (Qualcomm, 2019)
5G provides communication service providers with a once-in-a-lifetime chance to strengthen their position in the value chain and generate new revenue streams across a wide range of industries. A successful transition will necessitate the evolution of business support systems (BSS) to meet the 5G economy.
The rapidly expanding Internet of Things (IoT) and all of the new capabilities available in 5G have opened up a slew of new opportunities for communication service providers (CSPs) outside of their traditional markets, especially in verticals like automotive, health care, agriculture, energy, and manufacturing. CSPs will need to a) satisfy the expectations of a greater range of stakeholders to monetize them and b) meet the expectations of a broader range of stakeholders.
The revenue potential for 5G-based IoT is dependent on the role of communication service providers in the value chain, and it ranges from USD 204 to USD 619 billion by 2026.
The correct 5G monetization solutions can be a superpower, allowing communication service providers (CSPs) to deliver on 5G’s promise straight away. 5G creates new monetization pathways for CSPs into traditional and contemporary markets, including a renewed focus on enterprise and industry, through performance enhancements such as faster network speeds and bandwidth, ultra-low latency, guaranteed quality of service, network reliability, and a more flexible service offering.
According to business experts, automated processes will be critical in guaranteeing a smooth increase in network capacity and service activation.
CSPs must update their business support systems (BSS) in tandem with their 5G implementation to address 5G use cases and provide the full potential of 5G or risk falling behind in the 5Grace for profitable 5G services.
CSP and Revenue Models
CSPs must-have business support systems (BSS) that have evolved to manage complex value chains and support new business models to profit on them appropriately. Optimized information models and a high degree of automation are necessary to handle large numbers of devices via open interfaces. The available revenue model options are:
- As-a-service charge; CSP receives an agreed price depending on the solution given (level or quantity)
- Subscription-based; CSP receives a prearranged recurring payment (e.g., monthly) for the solution
- Benefit-based; CSPs are paid a fee based on how much money a user saves or how much money they save.
- Project-based fee; CSP receives a (usually) one-time fixed cost in a project setting
- Revenue sharing; CSP receives a percentage of the beneficiary’s achieved revenue
- Licensing cost; CSP sells the rights to use (part of) the solution and receives licensing charges
Collaboration between connectivity providers, service creators, partners, suppliers, and others is facilitated by 5G-evolved BSS, resulting in the efficient creation of attractive and cost-effective services.
Optimized information models and a high degree of automation are necessary to handle large numbers of devices via open interfaces. Flexibility and scalability are ensured by deploying in a cloud-native architecture. It’s critical to keep the business logic, interfaces, and information models of 5G-evolved BSS adaptable so they may be tailored to diverse industry verticals’ value chains and business models.
The Digital platforms and solutions have been designed to enable CSPs to:
- Reduce risk significantly by rapidly testing out new products, launching and monetizing them through the SaaS-based delivery model.
- Quick and easy integration with existing systems using Open APIs and flexible microservices, all of which are delivered in cloud-native environments.
- Support any pricing model with better billing capabilities.
- Connectivity is at the crux of IoT, OTT-based services, and other enterprise solutions through flexible catalogs.
- Offer support to multiple business partners on one unified platform, thereby allowing CSPs to orchestrate and monetize IoT marketplace, B2B, B2C, and other use cases with a strong ecosystem of partners.
The bottom being, CSPs must implement leaner, more agile operations that prioritize experimentation, cooperation, innovation, and rapid time to market to compete in the multi-trillion-dollar enterprise services market and capitalize on the 5G revenue opportunity.
Collaboration between connectivity providers, service creators, partners, suppliers, and others is facilitated by 5G-evolved BSS, resulting in the efficient creation of attractive and cost-effective services. Optimized information models and a high degree of automation are necessary to handle large numbers of devices via open interfaces.
Flexibility and scalability are ensured by deploying in a cloud-native architecture. It’s critical to keep the business logic, interfaces, and information models of 5G-evolved BSS adaptable so they may be tailored to diverse industry verticals’ value chains and business models.
At Knot Solutions, We will continue to enhance our BSS offering to serve our customers on their travels from network developers to service enablers, service enablers to service creators, and beyond. We are also committed to driving and contributing to key BSS standards and participating in open source and developer communities to promote openness and interoperability as part of this endeavor.
Leveraging a genuinely cloud-native architecture, the Knot solutions cloud-native BSS applications offer customers instant support for continuous innovation and offer the highest levels of customer experience. To resolve challenges you are facing in this arena, reach out to us for a demo or discussion.