The next generation of mobile networks, combined with technologies like AI, cloud, and edge, will be exponentially different, writes Nitesh Singh, Managing Director, Communications, Media and Technology for Accenture in Africa. Advanced networks such as 5G have the potential to unlock unprecedented opportunities for business transformation and growth. However, 5G alone will not create the revolution.
Next-gen networks must be paired with complementary digital capabilities to serve business needs best – now and in the future. Although South Africa is the most developed 5G market in the region, mass deployment and adoption of 5G still have some way to go.
5G investment holds a significant opportunity
Despite the headwinds, network operators in South Africa are pressing ahead with 5G network development. The enterprise market in South Africa is expected to be the primary driver of more sophisticated use cases, with 5G enabling new technologies such as IoT, real-time analytics, AI and augmented/virtual reality (AR/VR). Across the country, businesses are getting ready for a technology revolution, doubling down on 5G and converging technology investments.
Enterprises in South Africa are doubling down on investments in advanced networks and digital technologies. 80% of companies are at various stages of adopting digital technologies, ranging from wide adoption to partial implementation to piloting.
In comparison, 66% say they plan to invest an incremental 3-10% of their IT budget on advanced networks like 5G in the next three years. Across multiple industries in South Africa, we see three key trends driving enterprise investments.
- The new way of working since COVID-19 – COVID-19 has provided a harsh reminder of the need to have robust, well-connected digital infrastructures in place. And enterprises’ future budgets reflect that reality. Research from Gartner shows that, globally, almost 70% of organisations using cloud services today plan to increase their cloud spending in the wake of the disruption caused by COVID-19. It also found that 66% of enterprises globally increased or maintained their AI investments since the start of the pandemic, while 75% will continue or start new AI initiatives in 2021.
- The push for accelerating digital transformation – True digital transformation can only happen when next-generation technologies (cloud, edge, AI) and networks (5G) come together. As per IDC, spending on digital transformation is set to gather even more pace in the post-pandemic period, increasing from 25% of total IT spending in 2020 to 37% in 2024. According to ICASA, the advancement of 4IR technologies depends heavily on the capabilities of 5G networks. In South Africa, 5G will become the foundation for critical digital platform ecosystems, which will drive the 4IR in the country and accelerate organisations’ digital transformations.
- The need to explore innovation and disruptive opportunities – Organisations across South Africa are looking to accelerate innovation to support business and operating model reinvention, fast-tracking transformation programs to future proof their businesses. Accenture’s 2020 Innovation Maturity Index shows that 85% of South African companies are vulnerable to future disruption. Companies must make innovation a priority and intensify their efforts to compete both nationally and on the global stage.
Harnessing the power of convergence
End-to-end digital transformation will come about through the convergence of 5G and key technologies: cloud, edge computing, AI, and IoT. The cloud sits at the centre, and the edge complements it as it radiates out toward the “ends” of a network. Cloud will integrate with data and computed insights from the edge and spur new apps deployed at the edge – making edge an extension of cloud. 5G connectivity divides computing resources along the cloud-network-edge continuum possible. Its ultra-reliable low-latency capabilities make the short connection between the device and the edge even more efficient.
Realising the massive potential of 5G and converging solutions demands much more than technology implementation. It requires organizations to adopt fundamentally new ways of working, adapts their operating models, develops new skills and priorities, and drive deeper collaboration with partners. 5G-enabled technology solutions have the potential to unlock entirely new use cases and business models across industry verticals. These solutions will drastically change how enterprises across different industries operate – but impact and adoption will vary from one to another.
View on the 5G roll-out from critical industries
To understand the potential effects more closely, we harnessed the views of experts across six key industries:
- Manufacturing in South Africa has much to gain from adopting and implementing 5G and converging technologies. By activating use cases such as factory-floor automation, connected workers, intelligent asset tracking, and quality assurance, companies stand to lift productivity, safety, and revenues to new heights. The sector believes that the government has a crucial role in overcoming these barriers by freeing up the spectrum, setting reasonable pricing for it, and fostering an ecosystem of 5G-led initiatives and innovation that will drive skills development and allow services to flourish.
- Retail stands to unlock much-needed value from 5G and converging technologies. Post-pandemic growth rates are expected to be subdued, both for online and in-store retail. Considering these challenges, 5G and converging technologies have a critical role in helping retailers reinvent their operations. 5G will unlock retail data with near real-time analytics to improve customer engagement, inventory efficiency, and operational productivity. It will allow marketers to achieve radically personalised and predictive engagement with customers through enhanced 5G connectivity.
- The financial services future hinges on the experiences it can deliver to customers beyond simply providing products or channel offerings. Financial services firms are making solid strides in certain aspects of their 5G journey, including planning 5G implementations and developing security and workforce skills. However, a significant investment for 5G is earmarked in the sector; both the short- and long-term, allocating an additional average of greater than 7% of ICT spend, will be on 5G-enabled solutions.
- The public sector has a pivotal role to play in accelerating the 5G revolution. Still, it must streamline policy and develop more forward-looking regulatory frameworks to drive consumer and enterprise adoption. 5G network roll-out remains confined to urban areas despite reasonable government efforts, mainly due to policy gaps, a concentrated broadband infrastructure market, and high costs. These barriers threaten to widen the digital divide in rural and less affluent regions. Proper policy intervention and closer collaboration between the government and the telecommunications industry is vital for bridging the gap. The most significant use cases include smart city surveillance, enhanced citizen services, and digital education.
- Healthcare in South Africa was placed under massive pressure from the COVID-19 pandemic, underscoring the urgent need for digital solutions that support better patient management, universal access, and disease prevention. Adopting IoT applications and devices, enabled by 5G connectivity, will create new possibilities for easier monitoring of individuals’ health in remote areas. They will drive more significant mobile and home care opportunities, adding capacity and flexibility within the healthcare system. The most essential 5G and edge technology use cases include connected hospitals, healthcare training and remote surgery.
- Natural resources can move into a new era of greater safety and efficiency with 5G and converging technologies. Still, the sector must overcome cultural and technical barriers before it can reap these benefits. 5G creates new possibilities for faster communication and greater connectivity in harsh, remote environments. It will power complex infrastructure, equipment, and IoT devices to help firms unlock greater automation and improved worker safety. Some leading natural resources companies are already piloting 5G-enabled use cases. The high cost of deployment and lack of sufficient 5G coverage and necessary enabling technologies remain barriers to broader implementation
Advances in networks and digital technologies will unlock radically different opportunities for greater value. The right strategy and partnerships will be vital for success. With these in place, companies across South Africa can capitalize on the tangible acceleration opportunities and maximise the disruptive power of next-generation technologies.