DTWS: How Swisscom found a way to monetize 5G enterprise solutions – and why it wasn’t easy

Telcos talk a good game about monetizing 5G by targeting the enterprise sector, but Swisscom is actually doing it with 5G-based services for verticals like healthcare and construction. That said, it took quite a bit of trial, error and mindset evolution to get there, and enterprise remains a slow growth opportunity for 5G – at least for now. During a morning keynote session at Digital Transformation World Series 2021, Frederike Hoffmann, EVP, Head of Connected Business Solutions, Swisscom, talked about how Swisscom started early in enterprise 5G, carrying out one of Europe’s first successful proof of concepts (PoCs) several years ago, and began chasing the “Industry 4.0” dollar, convinced that mobile private networks would revolutionize the industrial sector. The problem, she said, was that the industrial sector wasn’t nearly as excited about this as Swisscom was, wary of the upfront investment involved in a cellular private network at a time when Wi-Fi still seemed sufficient. Moreover, she added, Swisscom had underestimated the level of in-depth industry-specific expertise required to sell 5G connectivity to verticals. “We did not fully understand our customers’ needs, and we did not have the business knowledge that is needed to fully establish the services that they require.” In response, Swisscom changed tack, dropped the mindset that Industry 4.0 was the holy grail for 5G private networks, and looked for ways to take its connectivity capabilities deeper into the value chain and provide more value to customers. The telco also embraced a collaboration model to gain the necessary industry knowledge from customers and partners alike to better understand how their supply chains worked and where their real pain points were, and build solutions to address them. That shift in strategy paid off, with Swisscom racking up successes in the healthcare sector, though Hoffman admitted this was partially the result of good timing, as healthcare companies were at the point in their investment cycle where they were renewing their infrastructure, while the ensuing COVID-19 pandemic ended up being a PoC itself in how 5G-based solutions help hospitals run more efficiently during a global pandemic. Swisscom has also picked up business in the construction sector, such as Rhomberg Sersa Rail Group, which needed a connectivity-based solution for evaluating railroads at night and carrying out needed repairs. Such work is expensive and dangerous, as it typically takes place at night, often in remote areas with wooded or mountainous terrain. “We built for them a mobile private network and implemented an edge cloud so the data could be processed on-site at the highest speed available,” Hoffman said. “That was absolutely fantastic for us because we could see that connectivity was a base for everything they wanted to do, but then they also needed artificial intelligence, different software, and cloud access. So it was really good that connectivity was the starting point, and from there we were able to transfer this product and define it so that we could scale it.” Hoffman cautioned that despite these early successes, it’s too soon to say how fast the business will grow in the next few years, as growth has been steady but slower than expected. That said, every customer success is a PoC to showcase to more potential customers. Hoffman also said that Swisscom’s next 5G enterprise opportunity is mission-critical communications for government organizations like the military and the police looking for alternatives to TETRA trunked radio networks. Ultimately, Hoffman said, developing a successful 5G enterprise business requires old-school telcos to evolve, and that evolution is still in progress for Swisscom. “It was a hard learning journey for us as a large telco player – we believed that we can do everything ourselves, and we have the best engineers and we understand what the customer actually needs,” she said. “So this is a learning journey from one customer to the next, where we build trust, and where we see that working closely with partners actually works.” Watch Frederike Hoffmann's keynote interview on Connectivity & beyond – how to successfully monetize 5G here.

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