By: Jan Abrahamsson

Today, data has become one of the most valuable assets on the planet. With developments in artificial intelligence (AI) and machine learning (ML), it’s now possible to spin mountains of data into gold in the form of actionable business intelligence.

Need proof? Google and Facebook generated more than $130 billion from data-driven advertising alone in 2017. Furthermore, in 2018, seven out of the top 10 companies by market cap were webscale players that leveraged data in their business models.

Fueled by the rise of Industry 4.0—and the increasing capability of organizations to connect products and services to the Internet—a global push toward digital transformation is driving the exponential growth of data and new applications for networks and emerging technologies such as AI and ML. As a result, new, industry-shaping advancements arrive daily.

Communications service providers (CSPs) are now well-positioned to provide new data services that give them entrance into markets where previously they had a limited presence. Organizations of all types already trust CSPs with critical information. Furthermore, the rise of both 5G and the Internet of Things (IoT) will not only drive data growth but will also increase its value.

In fact, CSPs are already starting to leverage their unique position to generate lucrative new revenue streams based on their ability to collect, analyze and move data. Still, despite this apparent competitive edge, success isn’t guaranteed.

The digitization gold rush is creating new friends and foes. Customers’ core businesses are increasingly about providing enhanced digital experiences, which require high-performance networks and improved operational efficiency. Then, there’s the new growth enabled by 5G and IoT, which will continue to usher in developments we can only guess at now. Today’s marketplace is a volatile, brand-new place, and customers have different expectations from those to which CSPs are accustomed. For these reasons, CSPs need to take a strategic approach that plays to their strengths in order to pursue opportunities they are likely to win.  

In early 2018, Ericsson published a report, Exploring IoT Strategies, that examined how CSPs were taking advantage of their position in the IoT value chain. The dialogue has since continued, and through additional engagements with CXOs at major CSPs, further research shines some light on how these global entities are monetizing data.

That insight led us to produce an eight-dimensional strategic framework, supported by case studies, which CSPs may find useful for turning their 5G and IoT visions into profitable realities.

Holistic and Strategic

The eight dimensions can be divided into two groups. There’s the “where to play” segment, which encompasses strategic intent, consumer focus, enterprise focus and value chain position. Then there’s the “how to win” segment, which addresses go-to-market and ecosystem strategy, commercial models, portfolios, and network strategy and operating models.

CSPs can use this framework to decide where their 5G and IoT focus should be, starting with the identification of overall positioning and key differentiators. Once target segments and the value chain position are defined, the most suitable go-to-market, business and operating models can be determined.

CSPs need to look holistically across all eight dimensions to determine what their priorities should be. Unfortunately, most are only addressing a few of these critical areas.