The race to be the first Australian Telco operator to provide 5G services is well and truly on, yet the question remains whether the benefit of implementing 5G networks justifies the enormous infrastructure costs of doing so.  The challenge for Telcos undertaking this mammoth task is addressing how they can offset the implementation costs without alienating consumers and pricing themselves out of the market in the process.

In recent times, Telco operators have been unable to justify the business case for 5G and undertake the significant infrastructure investment required for trials and development.  A prevalent concern we hear from partners is whether current networks will require a moderate overhaul or completely new set-up to support the increased spectrum, frequency bands and transmission points which all add up to huge Investment dollars and risk precipitating a material change in market dynamics.

Add to this spiralling consumer demand for ‘all-you-can-consume’ Unlimited data plans, and operators are now under huge pressure to provide an Unlimited 5G network to satisfy consumer expectations and ensure survival.  5G networks are likely to place major strain on existing infrastructure necessitating this investment, yet operators don’t stand to benefit directly from the uplift in consumption given global platforms continue to take an ever-increasing slice of the pie without investing a cent in supporting infrastructure.

Cost management is currently a central objective for mobile operators in Australia and globally in order to contain downward pressure on mobile margins, particularly as major Telcos like Telstra, Vodafone and Optus prepare for 5G spectrum auctions later this year. As recently as last week Optus confirmed 400 jobs will go as part of ongoing efforts to develop a more “sustainable business model” and maintain bottom line while investing billions into its network.

This case study is representative of the global industry – in the United Kingdom we’re seeing operators sacrifice margin for market share which is putting pressure on MNOs and MVNOs alike.  As competition continues to intensify and as top-level Unlimited data plans enter the global market and erode the value of data, operators need to differentiate from rivals more now than ever to maintain share and relevance.  This is where partnering to create value and offering consumers incremental value propositions like those we deliver at Unlockd make sense.

By partnering with Unlockd operators and their consumers are clawing-back value from global technology platforms like Google and Facebook, which collectively account for over 80% of mobile advertising revenues in developed markets.  Unlockd enables Telco, Gaming and Loyalty providers to create sustainable differentiation in their business models via our opt-in attention-conversion platform, effectively allowing consumers to share in the value of content they consume.

This win-win-win ecosystem for consumers, Telcos and advertisers is the driving force behind Unlockd’s global platform, and leading MVNOs like Boost Mobile in the US and Tesco Mobile in the UK are already benefiting significantly as a result.

The advent of Unlimited data appetites and 5G networks that can appease them is an exciting moment in the evolution of mobile.  Whether operators have what it takes to maintain relevance and generate a return on 5G network investments remains to be seen, doing so will rest on their creativity and ability to share in not only the costs but the benefits of the Unlimited and 5G-enabled mobile Internet.

Sam Pratt is Director of APAC Advisory and General Manager of Commercial Strategy & Operations at Unlockd.

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