If you’re a consumer, the 5G horizon seems to be getting closer by the day as vendors begin shipping 5G-capable handsets and telecom operators refine their buildout plans.

But as the pace gradually quickens, one thing becomes clear: The transition to 5G won’t look anything like 3G and 4G migrations. To a certain extent, 5G will expand the speed-and-performance curve just as 3G and 4G did. And sure, we’ll have fancy new 5G phones in a couple of years, but we’re not where the real action is going to be because this isn’t going to be a consumer revolution at all. Rather, it’ll be an enterprise one.

How much more?

For now, radically new 5G use-cases for consumers are relatively hard to find. Today’s 4G devices and networks already deliver rich, immersive experiences, so most consumers don’t feel compelled to pay more to step up to 5G when they’re still focused on getting more gigabytes for their hard-earned subscription dollar.

“It’s reasonable to ask how much more a consumer is willing to pay,” says John Abraham, Principal Analyst with Analysys Mason. “If a user is reasonably content streaming 4K video – as we do on virtually any 4G smartphone today – then what exactly is the use case for 5G? I think it’s very unlikely that they would pay an additional $20 per month just so that they can get 5G. I think it’s fair to say that from a monthly subscription perspective for telcos, we are at, or near the peak of, what can be extracted from the consumer.”

Abraham says this mindset won’t slow down 5G adoption. Telcos globally are already well down their respective 5G deployment paths, and consumer-centric 5G use cases – likely centered around virtual and augmented reality, wearables, autonomous vehicles and the Internet of Things, among others – will eventually redefine the consumer wireless experience.

But Abraham says limited consumer revenue growth opportunities will push telcos to explore additional enterprise options and use cases – such as remote fleet management, adaptive factory controls, and on-road traffic optimization – that specifically leverage 5G’s ultra-high speed and ultra-low latency.

From consumer to enterprise

businessman on a phone call

For an industry that has largely focused on consumer needs for decades, the transition to 5G means much more than spending the billions necessary to upgrade wireless networks. It means additional investments will be required to properly serve enterprise customers as 5G takes hold. They have no choice.

“For all the investment being poured into rolling out 5G, operators – especially the leading ones – cannot recoup it from only serving the B2C market,” says Abraham. “They need to have a plan to address the enterprise.”

They’ll also need the right infrastructure. Abraham says most are still stuck with consumer-centric back-ends that lack the robust security, data stewardship, and monitoring capabilities of enterprise platforms, and as a result, will struggle to support enterprise applications and customers, “So that leaves us with a system that is not quite fit for the purpose.”

The use case gap will also need to be bridged.

“5G today does not have a killer app, so we don’t know what it is actually going to catch fire,” says Abraham. Abraham says AR, VR, 360-degree live broadcasting, connected cars and robotics all hold promise, “But these are not, at this point, looking like sureshot wins.

This leaves operators anxious about where they need to place their bets.

“They don’t want to end up with a white elephant. And yet, 5G applications will not be a fixed constant. They will evolve over time.”

John Abraham, Principal Analyst at Analysys Mason

From a business systems support perspective, Abraham says this will force operators to bet early, without a fully-formed picture of how the services roadmap will play out. They will require agile platforms that adapt to whatever takes off years from now.

Not just hardware

The challenge for telecom operators extends beyond the technology.

“The biggest issue that operators have is in terms of their internal culture and organization structure,” says Abraham. “Because it doesn’t matter how good the technology is: If your organization structure does not support it, you will not be able to effectively deploy this great new technology, and you won’t be able to extract all the benefits that that new technology brings to the table.”

Abraham says despite their technological expertise, telcos typically don’t excel when it comes to adapting their back-end and driving organizational change.

“Operators need to turn to people who are experts, who can help them change their organizational structure so that when they decide to deploy new technology, they are fully ready for it,” adds Abraham. “I think that’s probably going to be the most painful part. For all the discussions we have on the technology side of things, it’s the organization change that’s going to be more challenging.”