A new report from EY found these emerging technologies are causing a “seismic shift” in business operations, transforming the industry

Scarlett Evans, Assistant Editor, IoT World Today

February 15, 2024

6 Min Read
5G, generative AI, and IoT are transforming the telecommunications industry
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A recent survey by EY explores how emerging technologies such as 5G, generative AI, and IoT are transforming the telecommunications industry.

The survey, which looked at 1,405 enterprises from 20 countries, examined industry perspectives of the technologies, how companies are adopting them, and the challenges that remain to widespread uptake. 

According to EY, these emerging technologies are driving a “seismic shift” in how businesses operate, and companies have to keep up with the rapid pace of change or risk getting left behind.

AI and Automation Pull Ahead

When it comes to the adoption of emerging technologies, AI and automation ranked first in terms of investment interest, though generative AI is emerging as a major sector set to pull ahead in the next few years.

“Generative AI already ranks third with 43% of businesses currently investing, and another 33% planning to invest over the next three years,” said Adrian Baschnonga, EY’s global TMT lead analyst in a media briefing. “In terms of year-on-year trends, we can also see 5G and quantum computing have seen a pretty strong uptick in terms of investment.

EY’s findings showed 5G has seen particular interest in Europe and the Asia-Pacific region, though U.S. businesses still lead the way in adoption. 

Related:Generative AI, Cost-of-Living Crisis Among Top Telco Risks for 2024

AI and automation had the most active deployments in the businesses surveyed, accounting for around a third of current investment. While IoT technologies had a relatively low active deployment rate (just under 20%), industries such as manufacturing and health care had strong deployments of IoT, with 40% saying they have active projects underway.

Manoj Prasanna Kumar, head of enterprise platforms at Singtel Digital Infra similarly said AI, automation and robotics are pulling ahead as areas of particular interest for companies.

“We see a lot of customers increasingly adopting AI, especially for automation, while a lot of customers in the industry 4.0 sector are adopting robotics,” said Kumar. “What we’re observing in the market is mature customers operating large enterprise environments are using AI, especially predictive analytics, virtual reality and mixed reality, for use cases like predictive maintenance, automating factory operations and so on,

“We can see very clearly that these customers are becoming more and more confident in adopting AI for automation. However, customers operating in mission-critical environments – like ports or airports – are very calculative in adopting any new technology in production. But as enterprises, we can increasingly see customers graduating from the pilot and proof of concept stage into adopting AI and robotics for more commercial deployments.”

Challenges to Businesses

As businesses onboard this new array of technologies, some obstacles remain to widespread uptake, with integration, scalability and sustainability the primary concerns for companies.

Seventy-five percent of respondents said they believe their businesses need a better understanding of these tools before they can expect value creation, while 74% said their businesses needed better data governance when deploying the technologies.

“There are also scalability concerns,” said Baschnonga. “While trials offer promise, 63% believe that the journey to widespread deployment is challenging. Sustainability is another important consideration, with seven out of 10 businesses saying more needs to be done to harmonize tech and sustainability agendas,

“There’s lots of ambition, but a latent scalability challenge. It’s certainly food for thought in areas like ESG and data governance.” 

The Rise of Generative AI

Companies surveyed showed they were open to a range of use cases for generative AI, though employee collaboration and customer experience were top of mind.

The most common applications of generative AI, according to Kumar, are for automating the customer support experience and to train or upskill a workforce to handle increasingly sophisticated tasks.

Tom Loozen, EY’s global telecoms leader, said most businesses favored a gradual adoption of generative AI tools, rather than a complete overhaul of operations.  

“We asked companies whether they would put GenerativeAI front and center of business plans, prioritizing it for investments and using it to radically accelerate digital transformation,” Loozen said. “Or, whether it’s more of an adaptive strategy where gradually over time businesses plan to use more and more of it. In our findings, the latter was the case,

“So really, adding these tools to existing AI and machine learning initiatives over time is what companies plan to do.”

Obstacles to Generative AI Adoption

Despite increased industry interest in generative AI tools, adoption barriers still remain.

Businesses’ primary concern is that it will take jobs from human workers, as well as the tool’s dependency on data and ethical concerns around how safe it is to use.

“There are concerns from many of our customers around how safe generative AI is, especially when they feed in confidential data to the models,” said Kumar. “We’re collectively working with our ecosystem partners and customers to implement industry-leading techniques like anonymization of data to ensure that ethical AI is safe for enterprise adoption.

“We also really stress that generative AI is going to complement our existing workforce, enabling them to do their jobs much, much faster, and with much, much more efficiency.” 

“It's also clearly about educating people to understand generative AI, so they can believe it will help them in their day jobs, not replace them,” added Loozen. 

IoT

Finally, the survey looked at the deployment of IoT across industries.

“Combining IoT with other technologies, such as AI, was the top answer in all regions, and manufacturing companies top the score for this sentiment,” said Baschnonga. “Other priorities reflect the need to roadmap 5G within IoT, measure success, scale existing capabilities, but we're also seeing a lot of year-on-year movement around the need to deepen collaboration between enterprises and their tech and telecoms vendors. That's cited by 31% of businesses.”

EY’s findings showed there was no preference in terms of use cases for IoT and 5G-based IoT, though enterprises showed more responsiveness to VR and AR, personalized products and industrial automation.  

“Consumer products and retail companies top score for interest in 5G-based AR and VR, while manufacturing and energy companies are most receptive to industrial automation delivered through 5G,” said Baschnonga. 

Private networks are also expected to see an uptick over the next few years, as businesses increasingly adopt 5G-based tech and begin to prioritize data security and network resilience.

“IoT is going through a great evolution,” said Kumar. “We’re seeing devices such as autonomous cars, drones and robots becoming a lot more sophisticated, and it’s become mission critical for the data collected by these devices to be processed in real time,

“This is where high-speed, low-latency networks like 5G become very critical to power such mission-critical use cases. So we’re seeing a huge increase in demand for private networks, and I can foresee that this is only going to keep increasing over the next few years.”

About the Author(s)

Scarlett Evans

Assistant Editor, IoT World Today

Scarlett Evans is the assistant editor for IoT World Today, with a particular focus on robotics and smart city technologies. Scarlett has previous experience in minerals and resources with Mine Australia, Mine Technology and Power Technology. She joined Informa in April 2022.

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