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Detecon Market Survey: Energy Suppliers Deal with Strategies for 5G

Vielfältige Potentiale für Versorger

Große Bereitschaft zum Angebot eigener Infrastruktur

Unklare regulatorische Rahmenbedingungen als größtes Hindernis

Cologne, 01.07.2019 - 63 percent of energy supply companies (EVU) and city carriers in Germany are already considering strategy and positioning for the topic of 5G. However, only less than one-third have made a strategic decision or even started implementation. These are the results of the current Detecon survey "5G in the energy industry".

90 percent of the respondents consider 5G to be significant or very significant from a general market perspective. In addition: almost half of the participants (45 percent) see a high potential for their own company.

5G for operations of the EVU core business

When asked about 5G applications that promise the greatest success in the future, 84 percent cited the area of Industry 4.0 (campus networking). In addition, 63 percent each named mobility & logistics (autonomous driving) and municipal utility-related topics such as smart grid, public transport and smart city, which 53 percent consider to be potentially successful applications.

"Energy suppliers definitely see high potential in using 5G for their own operational purposes, for example, to better control energy grids or to intelligently design complex processes in local public transport," explains Volker Rieger, Managing Partner in the Business Ecosystems division at Detecon. "Participation in the development of smart cities for municipalities in their own supply region is also seen as attractive."

When asked about the desired role in the 5G market, every second company (53 percent) wants to offer infrastructure services such as fiber optics, power, or sites for the large mobile network operators and thus support the national rollout. "The willingness to provide existing infrastructures such as land, lines, antennas, and connections as an upfront service is definitely there," states Jörg Borowski, Managing Partner and telecommunications expert at Detecon.  

According to the survey, 37 percent of the respondents can also imagine taking on a role as providers of services with their own infrastructure. Options for action could be, for example, the offering of innovative IoT services for a smart city, such as the tracking of public transport traffic. 

However, the survey also shows that energy companies and city carriers see 5G projects as being associated with challenges. The biggest hurdles cited were unclear regulatory hurdles as well as a poor cost-benefit ratio and a lack of internal expertise to build and operate the complex infrastructure.

Companies need positioning strategy

What value do partnerships with national operators offer? What role can the municipal utility or city carrier play from a municipal perspective with regard to the digitalization era? What assets can be leveraged now and what competencies need to be rebuilt? "The range of positioning options in the future 5G ecosystem for energy utilities is wide, and making the right decision requires careful discussion with all stakeholders," Volker Rieger reports from project experience.

"One thing has already become clear, however," emphasizes Marc-Andreas Schultze, Managing Partner at Detecon in the Global NetWorks division, "the possibilities for 5G are far-reaching, and the path to the network is not easy for all parties involved. However, existing assets such as fiber optics, locations for tower/small cells, or electricity which municipal utilities and city carriers can contribute in the infrastructure environment should definitely be used or intelligently expanded in order to reap both business and economic benefits," says Schultze. The extent to which it then makes sense to invest more in Industry 4.0 (campus networking) or municipal utility-related topics such as smart grid, smart mobility and smart city depends on the framework conditions such as regulation or competencies and must be decided on the basis of corresponding profitability considerations.

For the "5G in the energy industry" survey, 25 representatives of energy utilities and city carriers from Germany were interviewed. More than half of the respondents were board members or come from board-related areas. The survey was conducted online in May 2019.

The survey with all results is available for download here (only in German available).

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