5G for Digital Tomorrow

CASE STUDY
 Mr. Sathvik and Ms. Anika are co-founders of DiGiCom Inc. Their major business segments are in communications,
healthcare, and financial sectors. Their market capital is close to $USD 1.1 billion. They have been one of the early starters
on the 5G revolution having a suite of offerings across industry segments and have existed for a decade now. COVID-19 has
had a huge impact on their new business deals, with no deal closures in the past 3 months. The latest COVID scenario has
resulted in existing clients either ramping down their teams or demanding cost cuts. In addition, the unprecedented times
have led to uncertainty about DiGiCom’s future growth and expansion plans.

The Case Challenge assist MFMI on their transformational

Mr. Shiwo, Ms. Yeona, and Mr.
Mingyu have asked for your
help. As a consulting partner to
MFMI, you will assess their claims
management process, along
with their data governance and
management practices. You will
prepare a recommendations
report on these topics for MFMI.
Furthermore, they have asked you
for an implementation plan for the
whole program. This plan should
incorporate the objectives, key
activities, deliverables, assumptions,
stakeholders involved, and so on, to
journey.
• Short-, medium-, and long-term
goals
• Strategy toward the vision
Mr. Sathvik and Ms. Anika are now
seeking you as a consulting partner to • How will you achieve?
arrive at a strategy leveraging 5G that (implementation approach)
will enable them to evolve, innovate, • What do you need to achieve?
deliver, and sustain. The strategy you (technological strategy)
devise should touch upon the below
• New business segments /
key aspects:
industries to target
• Situation analysis
• Performance analytics
• Where are we? (SWOT Analysis).
• What will be the outcomes for
• Vision & goals evaluation (measurement criteria)
• What do they wish to achieve? • Lessons learned
Where do they wish to reach?
• Future ways of working
(Objectives)

DiGiCom Inc Exhibit 1. DiGiCom’s financial summary over the past 5 years,
company profile by geography .
DiGiCom Inc was established a
decade ago and is headquartered Net Revenues(MUSD)-2015-2019
in Bangalore, India. They have their
operations primarily in India, North
$400,000
America, and APAC, with staggered
presence in Europe. Their market $350,000
$350,123

capital is close to $1.1 billion USD.

Mr. Sathvik, the CEO, is primarily $300,000
$295,378 $300,346

focused on business expansion and $260,720

new market penetration, and is also $250,000
$245,643 $240,980

responsible for the top line and $200,665

$210,450
$200,532
bottom line. Ms. Anika, the CTO, heads $160,554 $160,117
$185,883

$200,000 $175,745 $150,765

technology and product development
$140,234
across the organization. Mr. Costa $150,000
$130,120
$125,345

heads operations in North America $140,090 $100, 197

$100,000 $80,000
and Europe. Mr. Connelly heads APAC
operations. See Exhibits 1 and 2 for $50,000
financial data for the past 5 years
across geographies. $0
India APAC North America Europe

2015 2016 2017 2018 2019

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 Exhibit 2. DiGiCom’s CAPEX and OPEX cost for the past 5 years, by geography.

Capex and Opex(USD) - 2015 - 2019

$120,000

$100,000 $105,200

$90,800
$80,000

$65,115
$60,000 $52,400

$51,200 $51,220 $47,900

$45,200 $40,161
$40,000
$35,586 $38,350
$32,000 $30, 125 $32,110
$25,054 $25,900
$21,450
$20,000 $20,800
$13,520
$8,520
$0

2015 2016 2017 2018 2019

India North America APAC Europe

Their major lines of business are communication and media followed by healthcare and automotive industry (see Exhibits 3
and 4).

Exhibit 3. DiGiCom presence across Exhibit 4. DiGiCom’s presence across geographies.

industry segments.

Industry Segment
DiGiCom Industry Segment footprint
Region
Communication
Healthcare Automotive
& Media
20%
India 35% 18% 12%

APAC 15% 25% 30%

North
25%
55% 40% 42% 38%
America
Communications Helthcare Automotive
& Media Europe 10% 15% 20%

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Exhibit 5. DiGiCom’s business model and current offerings.
Vehicle 2 Pedestrian
(V2P)
Automotive
Vehicle 2 Vehicle
(V2V)
DiGiCom
5G
Offerings
Vehicle 2 Infra
(V2V)
Healthcare
Hospitals
(Telemedicine)
Healthcare
Apps
DiGiCom Business
Model
The DiGiCom business model is
built on their foundation principle,
“The TRINITY: 5G, IoT, and Big Data/
Analytics.” See Exhibit 5.
DiGiCom service lines are primarily
focusing on 5G development as it cuts
across multiple industry segments
and will become the backbone of
technology of future. It includes
1. Engineering, application
development, and maintenance
2. Quality engineering
3. Center of Excellence for Innovation
and product development on 5G
4. Mobility and IoT
5. Big data and analytics
6. Digital consulting
DiGiCom has developed products
and solutions in the 5G space that
are being implemented for their top
Device
Certification
Network Solutions
(Care & Access)
Communication
& Media
Mobility & IOT
Solutions CoE-Innovation
& Product
Development
OSS & BSS
Offerings
Medical Tech
Devices
3 telecom customers. Ms. Anika is
hoping to build on these 5G offerings
and take them to the automotive
segment in Germany, with leading
car manufacturers, thereby targeting
growth in Europe. They have recently
brought a startup in Germany
for $125,000, which has a suite of
products that simulates 5G networks
on cloud.
In addition, they have recently
partnered with one of the leading
pharma companies in Europe for a
greenfield research in healthcare
involving telemedicine, in which 5G
will play a pivotal role for next gen
healthcare services. They are also
doing some proofs of concept with
existing healthcare and automotive
clients to implement 5G offerings
and they seem promising. They have
developed a series of use cases as part
of these proof of concepts which is
available in Exhibit 12 below.
Given the current COVID-19 scenario,
Digital Consulting
Engineering,
Application
development &
maintenance
Quality
Engineering Big data &
Analytics
Mobility & IoT
in which clients are being conservative
on future investments, Mr. Sathvik
and Ms. Anika are making decisions
to meet changing market needs, you
are a consulting partner to help them
chart a path for future growth and
sustainability.
Impact of COVID-19 on
Consumer Spending
Organizations are grappling with
uncertain economic scenarios, with
significant impact to all business
sectors. Consumer behavior is now
more inclined toward savings and
wellness, because of low consumer
confidence; thus, supply chains are
imbalanced. In addition, consumers
have cut down spend in many
areas, including travel, fashion, and
auto. This has triggered a further
chain reaction in industries such as
energy, tourism, real estate, financial
institutions, durable goods, and so on.
See Exhibit 6.
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 Exhibit 6. Consumer spending behavior as of March 30, 2020.

As of 30 March 2020 UK Germany US Canada Italy France UK Germany US Canada Italy France
Travel
In-house entertainment
Luxury/fashion
Fresh and organic foods Public Transport
Packaged food and beverages Home décor
Preventive health care Women’s clothing
Outerwear
Household care products
Athletic equipment & clothing
Savings Home electronics & appliances
Medical procedures Shoes/footwear
Vitamins/supplements Toys and games
Men’s clothing
Out-of-home entertainment
Mobile electronics
Utilities Restaurants
Restaurant pickup/delivery Gambling
Cars/automobiles
Education
Tobacco/smoking
Out-of-home entertainment
Restaurant pickup/delivery
Healthier Categories Pressured Categories Cosmetics/perfume
More than 20% More than 20% Alcohol
respondents plan to respondents plan to Savings
spend more spend less Medical procedures
Education
Hair and body care
Rent/mortgage
In-home entertainment
Utilities
Insurance
Vitamins/supplements

A large share of the global sectors are seeing total shareholder returns (TSR) decline, reflecting the customer sentiment. (See
Exhibit 7.) Note that
• Nondiscretionary / essential sectors seem to be performing better, with food and staples retail positioned best.
• A broad set of industries are expecting overall pressure, with some regions being pinched in particular (e.g., transport in
Europe).

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Exhibit 7. TSR decline as from February 21, 2020, to April 4, 2020.

As of 21 February 2020 to 04 April 2020

Decline reflects economic scenario and consumer sentiment TSR performance (21 February - 04 April 2020)

Americans Europe Asia

Food/staples Retail -9% -8% -10%
Household product -11% -13% -2%
Healthier Sectors Pharma -13% -13% -12%
Telecom -14% -15% -10%
Food & Beverage -17% -23% -8%
Semiconductors -21% -34% -21%
Utilities -22% -27% -4%
Health Equipment -22% -23% -4%
Software -25% -27% -23%
Pressured Sectors Prof. services -26% -26% -24%
Capital Goods -28% -32% -25%
Transport -28% -43% -14%
Financials -28% -31% -24%
Tech Hardware -28% -17% -20%
Materials -28% -25% -24%
Media -31% -42% -6%
Retailing -35% -35% -16%
Insurance -36% -33% -21%
Banks -39% -48% -23%
Vulnerable sectors Real Estate -41% -30% -20%
Auto -45% -42% -30%
Hospitality -47% -43% -25%
Durable Goods -47% -32% -17%
Energy -47% -26% -28%

Are we looking at the next
recession?
Key economic indicators point to a
downturn. Global equity markets
have already started to price in risks
of COVID-19, along with highest level
of seasonally adjusted unemployment
claims in US history. Approximately
60% of companies have started
preparing for recession. The current
scenario implies increase in credit risk
for majority of sectors, with hospitality
and energy industries facing the
greatest risk of default and the lesser
discretionary sectors largely at lower
risk of default. A view of the same
across sectors is depicted in Exhibit
8, showing increase in credit risk for
majority of sectors.

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 Exhibit 8. Increase in credit risk for majority of sectors, February 21, 2020, to April 2, 2020.

As of 21 February 2020 to 02 April 2020

Median 5-year Nu mber of companies

CDS implied with 5-year CDS
Companies
probability of default probability of
default>15% in distress(%)

Food/staples Retail 7% 0 0
Household product 5% 0 0
Healthier Sectors Pharma 4% 3 17
Telecom 7% 6 23
Food & Beverage 5% 1 4
Semiconductors 7% 1 17
Utilities 5% 0 0
Health Equipment 6% 0 0
Software 5% 0 0
Pressured Sectors Prof. services 5% 0 0
Capital Goods 6% 7 12
Transport 4% 8 32
Financials 8% 0 0
Tech Hardware 6% 1 8
Materials 8% 11 24
Media 11% 3 21
Retailing 13% 8 47
Insurance 7% 0 0
Banks 9% 2 4
Vulnerable sectors Real Estate 10% 4 18
Auto 15% 10 53
Hospitality 18% 8 62
Durable Goods 8% 3 17
Energy 17% 19 59

Is there a silver lining in all this pandemonium?

While governments across the world are pumping money in billions and the future in many ways looks bleak, new
opportunities are emerging for people to adapt to new ways of living. For instance, society is dramatically embracing
digitization and demanding contactless / remote operations (see some examples in Exhibit 9).

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Exhibit 9. Examples of ways society is changing in response to the pandemic.
Organizations
Daily essentials
Education
With signs pointing to digitization as
the norm of the future, 5G may play a •
Transportation
massive role in making this happen. •
Below we explore 5G and the role
it may play in shaping new ways of
living.
5G – What does the future hold?
We are riding into the next exciting
technological revolution with 5G, the
• New ways of working by being remotely connected thereby
reducing cost of real estate, logistics etc.
• Potential shift toward more flexible and shared workforce
• Better work life balance with remote working
• Boom for digitization of essentials with increased demand for
digital/distanced healthcare and retail services.
• Demand for contactless operations with increased usage of
digital channels
• More virtual expansion of digital learning offering for all
academic institutions.
• Launch of new online programs across many sectors including
childcare and mental health.
latest generation of cellular mobile Compared with predecessors, 5G
Lesser demandDevelopment
communication. and selective ofuse of public transportation.
focuses on higher data rates, reduced
Centralized essentials supply reducing
5G is building a ubiquitous wireless travel.
latency, wider range of device
network. 5G combines data collection connectivity, cost savings, and more.
and computation with billions of 5G networks achieve much higher
devices -- providing unprecedented data rates than previous cellular
insights and experiences that will networks, up to 10 Gbps. This is faster
change what people can do and how than current cable internet, and 100
they do. times faster than the previous cellular
technology. See Exhibits 10, 11, and 12.
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 Exhibit 10. How 5G may impact technology in the future.

1,000,000 devices 1 ms Latency

eMBB-Enhanced
per Km2
mobile broadband
Mobility - 500 km/h
99.999% Reliable High Speed railway
99.999%Available

5G Drivin 10X Battery

Factors Life for Low
10Gbp/s Peak URLLC-Ultra reliable mMTC-Massive
data rate low latency machine type Power Devices
communication communication

1 Network- Multiple Industries!

5G

Exhibit 11. Recent headlines about 5G.

“Gartner Forecasts Worldwide 5G Network Infrastructure Revenue to Reach $4.2 Billion in 2020. 7% of CSPs Worldwide Have
Already Deployed 5G Infrastructure in Their Networks” – GARTNER
“5G, AI, and IoT form a new trinity” - Forrester
“MWC19 hosts 5G surgery breakthrough” – Mobile World Congress (Barcelona)

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Exhibit 12. A sample of impact of 5G across some of the industries and the opportunities it brings to
enable digitization.

Leveraging 5G across Automotive Industry

Vehicle to Infra (V2I) Vehicle to Vehicle (V2V) Vehicle to Pedestrian (V2P) Insurance

Category Focus Area Use Cases

Vehicle to • Vehicle diagnostics • Real time vehicle diagnostics for

Infra (V2I) • Predictive maintenance
• Transport management
• Public services
• Mobility
• Fleet management
potential failures
• Predictive maintenance alerts for vehicles
• Traffic management, real-time vehicle routing,
parking assistance, etc.
• Data management
• Incident management

Vehicle • Road safety and emergency • Emergency services, hazard warnings, etc.
to Vehicle • Environmental hazards • Real-time weather conditions, weather predictions,
(V2V) carbon emissions, etc.
• Incident management, collision avoidance, etc.
• Data management

Vehicle to Public safety • Public safety / hazard warnings

Pedestrian • Public transportation
(V2P) • Priority assistance

Data management • Real-time customer data availability for insurance claims

Insurance
• Managing customer claim records
• Increased data-storage capabilities of cloud computing

Insurance applications • Online claims

• Applications used by insurance companies for managing claims,
Customer information, new policies, etc.

References
https://www.bcg.com/en-gb/publications/2020/8-ways-companies-can-shape-reality-post-covid-19.aspx
https://hbr.org/2020/03/understanding-the-economic-shock-of-coronavirus
https://www.linkedin.com/pulse/delivering-essential-products-consumers-uninterrupted-john-knapp/
https://www.linkedin.com/pulse/hit-hard-covid-19-transportation-logistics-companies-must-egloff/?trackingId=O%2Bmk7i0S
ThikkURVizZaIw%3D%3D
https://uk5g.org/media/uploads/resource_files/21554-Ericsson-Case-Study.qxd_.pdf
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/a-5g-manifesto-for-the-ceo
https://www.strategyand.pwc.com/uk/en/making-5g-pay/the-promise-of-5g.html

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