The Promise of 5G Alone Is Not Enough For Mobile Service Providers to Enter Smart Manufacturing

Despite high ambitions for the smart manufacturing sector, mobile service providers (MSPs), are currently secondary players in this market. Consequently, their short-term opportunity in manufacturing is forecasted to be only US$2.6 billion by 2022, according to ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies.

The manufacturing market has grown without MSPs so far, and if they dont play their cards right, it will continue to do so, said Pablo Tomasi Senior Analyst at ABI Research. UnTelco “ the need for MSPs to think and act beyond their traditional boundaries “ in manufacturing is about entering a well-entrenched sector developing new market strategies and partnerships. MSPs have a chance to enter the smart manufacturing market building from the ground up, gaining trust as partners, and proving that the value of their offering is beyond what is currently delivered in the market. 5G is a promise, but alone is not enough and with doubts on what business model will support it, 5Gs ability to integrate with legacy technologies, and the actual results delivered in harsh factory environments, there is much uncertainty about whether 5G will be a game-changer for MSPs in manufacturing.

MSPs must understand their competitive position in the market, be patient, prepare for a long journey, and align their ambitions with what the sector wants. Partnering with market leaders will be essential - the recently announced partnership between Orange and Siemens is an example of what should be a growing trend. 5G will not be in the factory for few years, and to be successful,  a wider alignment between industrial vendors and MSPs is essential. Even the private LTE solutions currently available are only at a very early stage in manufacturing and still the lack the success stories needed to prove their value in the market.

The manufacturing market looks for enhancements, not disruption, and for solutions, not technologies. MSPs should tailor their offerings, including 5G, to these enhancements and solutions, Tomasi concluded.

These findings are from ABI Researchs UnTelco in Manufacturing: Telco Opportunities and Market Activities report. This report is part of the companys Telco Cloud Platforms & Digital Transformation research service, which includes research, data, and Executive Foresights.