Purushothaman K.G., Partner and Head, Digital Solutions & Telecommunications Industry Leader, KPMG in India
India’s technological landscape has transformed significantly in the past two decades. With each passing year, consumers, businesses and governments have widely accepted digital adoption, making the country one of the largest and fastest growing markets in terms of population of digital consumers. As an increasing number of people in India pivot towards a digitally enabled lifestyle, it is estimated to become home to 900 million digital users by 2025.
The level of adoption on the business front is higher, with the entire spectrum of corporate entities, from large companies to the smallest of businesses, intently participating in this digital revolution. In a post-pandemic world, the momentum of digitalisation has only accelerated across industries. Today, there is a greater need to digitalise processes for end-to-end solutions. Advanced digital services are slated to change the way businesses and service providers operate amid the transformation age of communication.
The next phase of digitalisation
Connectivity is an important component of a successful digital transformation. The experience of deploying technology over the years has clearly indicated that both fixed and wireless connectivity play a vital role in this evolution, thereby making a stronger case for a 5G business. A report by KPMG in India indicates that over 85 per cent of enterprises across multiple sectors are expecting to achieve up to 20 per cent return on investment on various 5G and Industry 4.0 initiatives. Moreover, 5G is deemed to play a key role in boosting efficiency for the top 10 Industry 4.0 use cases globally, making for an over $43 billion market.
Today, hyperconnectivity and quick technological advancements are peaking, and 5G is set to become the thread that links the entire ecosystem. Helping the nation move beyond the low penetration of fixed broadband, it is set to provide connectivity to Bharat, thereby bridging the digital divide. The recent trials have also demonstrated the power of a connected India, where there is free flow of essential services such as education, healthcare and e-governance through digital mediums. The key benefit of linking 5G with edge computing is that they can significantly improve the performance of applications and enable huge amounts of data to be processed in real time.
When 5G gets edge computing for company
Edge computing is essential for 5G standards. On the one hand, 5G can increase speeds by up to 10 times over 4G. On the other had mobile edge computing can lower latency. So, when 5G and edge are combined, storing and processing time-sensitive data on high-bandwidth devices becomes easier.
Furthermore, when combined, the two will be key to addressing global economic recovery. In KPMG’s research on who is in the emerging 5G and edge computing ecosystem with International Data Corporation, five sectors were found to be witnessing incremental growth of over $500 billion by 2023. Industrial manufacturing, connected healthcare, intelligent transportation, environmental monitoring and gaming are poised to grow on the back of the improved connectivity arising from the intersection of 5G and edge.
Take the example of the manufacturing sector, which was deeply impacted during the pandemic. While the industry is just about gaining momentum in recent times, the benefits of 5G and edge computing can be certainly reassuring. Although not all manufacturers are well placed to accelerate advanced digitalisation, those who do will be capable of reducing cost, and improving the speed of production and quality of their products. Above all, they stand to gain a competitive advantage in the market.
When 5G and edge are combined, storing and processing time-sensitive data on high bandwidth devices becomes easier.
At the intersection of 5G and edge computing, telcos are presented with an opportunity to look beyond connectivity. Identifying new ways can help realise value. This ecosystem is built on the four pillars of connectivity, hardware, software and services. Key players include network equipment manufacturers, autonomous vehicle/robot manufacturers, augmented reality (AR)/ virtual reality (VR) device and platform vendors, internet of things (IoT) producers, and semiconductor companies, among others. Currently, the deployment of 5G is taking place at a slow pace, leaving insufficiency in cultivating an ecosystem of new applications. In such a scenario, edge computing can help expand the market of 5G coverage, well in time.
Opportunities across sectors
The multiple benefits of deploying 5G technology include support for solving business challenges, reshaping value chains, enhancing revenue models and optimising operations across many industries. While edge computing is needed to obtain the financial benefits of 5G, a mindful combination of the two can help create significant fiscal value for those in the ecosystem.
Sectors such as banking, retail and mining, among others, can design superior personalised experiences by reaping the benefits of edge computing’s massively decentralised computing architecture. For instance, edge can help banks increase consumer safety via real-time analysis of ATM video feeds. In the case of mining companies, data can be used to improve their operations, worker safety and productivity, and reduce energy consumption. Retailers can further personalise the shopping experience for their customers and rapidly communicate specialised offers. Automating the remote distribution and management of their kiosk-based applications can help ensure that they continue to operate even when they are not connected or have poor network connectivity.
Merging 5G and edge computing is poised to introduce a new age in industrial manufacturing. Fast-tracking Industry 4.0 will help bring autonomous factories with new technologies to the market. There is a massive opportunity to enable increased speed and agility in order to harvest real-time data and improve productivity with the hardware, software, connectivity and services ecosystem, as well as autonomous robots, AR/VR, IoT devices and other technologies. This has the potential to play a key role in setting the global economy on the path to recovery.
In fintech, 5G technology can lower operational costs and further enable VR-based consumer services, wealth management and financial counselling in rural areas. Several healthtech firms in India are already waiting to reap the benefits of the roll-out of 5G services in the country. Real-time patient remote monitoring, fitness tracking and diagnostics, virtual home care systems, and complex clinical data analysis are some of the use cases.
Idustrial manufacturing, connected healthcare, intelligent transportation, environmental monitoring and gaming are poised to grow on the back of the improved connectivity arising from the intersection of 5G and edge.
A forward-looking momentum
The past year was revolutionary for the telecom sector. The launch of 5G services ushered in an era of deeper tech advancements, and a connected ecosystem. While the implementation of 5G+edge will not be economical for businesses, it will be worth the rewards. With the massive push for digital, the cost of being left behind is arguably greater.
Strong ties, particularly between telcos and cloud providers, will be key to the desired connectivity expansion and long-term growth momentum. Even as the current economic impact places a strain on long-term strategies, strong leadership can help move telcos forward, and embrace the risks and opportunities. After all, in today’s increasingly digital environment, the time to act is now.