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Superfast Networks Crucial to Success of SMEs?

Everyone is striving for the digitization of industry. Many solutions are tailored to large corporations. However, SMEs are often occupied with other questions. For example: do I have any network connection at all?

21 Mar. 2017
Marktplatz Kommune Gigabit-Netze Mittelstand
Network expansion – a critical success factor for SME digitization.

How can SMEs make it through the digital transformation successfully? This question has been occupying the minds of politicians, solutions providers, and SMEs themselves. At the CeBIT forum "Marktplatz Kommune" today, CEOs of mobile network companies were discussing what broadband expansion for the economy requires – and whether there are any alternatives.

Fiberglass vs. 5G

Senior Vice President of Public and Regulatory Affairs at Deutsche Telekom Wolfgang Kopf and CEOs and speakers of Ericsson, Huawei Germany, and Nokia were all agreed on one thing: fiber optics is absolutely crucial. Although the technology’s development in Germany is expected to gain traction in the coming years, there will be no complete coverage – that is to say coverage that includes rural areas. According to Telekom expert Kopf, it just isn’t worth it. One reason for this is that excavation work for the cables would make up 80 to 90 percent of expansion costs. New methods are making the process cheaper – but only very slowly.

There is also no such thing as a "typical" SME. Kopf states that the smallest companies especially would look mainly for solutions that are quick to expand – connection speeds for them, according to Kopf, are becoming less important. Others would desperately seek a fast connection – as Vice President of the Broadband Communication Association Dr. Jürgen Hernichel suggests.

A network has to fulfill criteria including reduced latency, a symmetrical structure, and complete coverage. For this reason, the 5G telecommunications standard will be brought in alongside fiber optics. Indeed, in the age of the IoT, it is not only enterprises that are connected, but their products and machines in particular. "The first autonomous vehicles will be tractors," explains Nokia speaker Wilhelm Dresselhaus. "And fiber optics would bring nothing to the table here. Connecting these tractors will require cell phone masts." Koetz, CEO of Ericsson, expects – perhaps optimistically – a large-scale 5G rollout by 2019. Hernichel predicts 2021.

It Doesn’t Always Have to Be Broadband

Exactly when 5G and fiber optics become available across the country doesn’t really matter; in the age of the IoT, high bandwidth is not a necessity. "We are therefore promoting narrowband," says Walther Haas, Member of the Board of Directors at Huawei Germany. "Connected objects – freight containers, for example – can be tracked relatively easily. Examples like this from logistics or manufacturing are typical of Industrie 4.0. And narrowband is the IoT’s pioneering technology." But Germany will have to be quick in rolling it out: "The rest of the world isn’t going to wait for us."

We Need a Strategy, Not Just a Network

Supporting SMEs through the digital transformation is more than a question of technology. What’s the latest on the prioritization of company versus private data (net neutrality being the keyword here)? How do enterprises gain the digital expertise they require to even be able to take the opportunities that new technology brings? Alongside networks, relevant skills are also in demand. "Networks alone are worthless" – an interesting statement, coming from Ericsson CEO Koetz.

At the Marktplatz Kommune forum, companies and network providers present practical and innovative solutions for municipal management. Find the entire event program online.