Insight 

On day two of this year’s Mobile World Congress (MWC) in Shanghai, we heard from Li Peng, Corporate Senior Vice President and President of ICT Sales & Service at Huawei, as he shared his insights on how AI can be used to help monetise the 5G experience

Providing differentiated and personalised offerings is essential to be able to monetise 5G properly, but this is the same with monetising any industry. Li highlights how we can draw useful insights from the aviation industry… 

Back in 1970, after the introduction of the Boeing 747, the aircrafts were now able to seat 350 passengers instead of the previous 150. However, this only led to a 22% increase in airline revenues, despite passenger capacity more than doubling. Li highlights how we can draw useful insights from the aviation industry, introducing business-class and first-class service for better growth. 

These notions can be applied to the 5G industry – “high-quality supply is a key driver and creator of new demand,” says Li. 

Since the 2G era, the mobile industry has made huge developments though innovation and continuous technological evolution in the 3G, 4G and 5G eras. 5G advanced can help meet consumer demand for improvement, but, says Li, “to realise the healthy and rapid growth of the mobile communications industry, we urgently need innovative supply to stimulate new and untapped demand of users.” 

“Therefore, business model innovation is particularly urgent,” he confirmed. 

Driving the innovation of 5G advanced technology and the network-cloud-AI synergy is essential here. Li presented the audience with some potential scenarios for this:

1. Creating different packages for different consumer preferences

Users have many different types of requirements for their individual network experience. For example, business travellers who prioritise download speed, live streamers focusing on upload speeds, and gamers who focus on latency. As 5G advanced improves bandwidth capability tenfold, these different customer experiences can be supported by the network. More personalised services to the individual will allow higher prices to be charged, and mean the customer is more likely to be retained. 

2. Monetisation through B2B scenarios

The faster upload and download speeds and low latency of 5G advanced mean that it can upgrade the 30,000 private networks that already exist. Using this example in the train industry, this results in additions such as AI vehicle detection applications being added. Therefore, more intelligent operation and maintenance of the entire train line can take place, improving overall efficiency by 30%.  These value-added scenarios for businesses can be packaged up and monetised. 

The session concludes by emphasising how carriers are able to provide differentiated experience services for users to be able to be fully monetise 5G advanced, and lead the industry in the development of mobile AI. The movement is taking off – over 60 carriers and partners have announced 5G advanced commercial plans, and over 30 have competed technical verification. 

“Huawei is willing to work with global carriers and partners to embrace 5G-A, accelerate capability convergence and model innovation, and stride to a new era of experience monetization,” concluded Li. 

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Subscribe to our FREE weekly email newsletters for the latest telecom info in developing and emerging markets globally.

Insight

Since that first summer in 2019, 5G has become the fastest-growing mobile communications technology in the world. According to David Wang, Executive Director of the Board and Chairman of the ICT Infrastructure Managing Board at Huawei, speaking on stage at Day 0, there are currently around 320 5G network services worldwide, covering around 1.8 billion users. This is three times the growth rate of 4g in the same time period.

Alongside mobile subscriptions, 5G has proved revolutionary for fixed wireless access (FWA), with over half the world’s 5G network operators now offering commercial 5G FWA services. Now, this year, 5G is set to evolve yet again, with 3GPP’s Release-18 – featuring the first standardised version of 5G Advanced – being finalised on the 18 June.

5G Advanced, said Wang, represents a major opportunity for operators worldwide, promising to deliver considerable opportunities for monetization and revenue generation.

5G Advanced: New business opportunities in toC (consumer), toH (home) and toB (business)

To Consumer:

One challenge in the consumer sector is that there has been a sharp slowdown in traffic growth.

1. The user penetration rate of 5G packages reached 80% by the end of 2023. In the future, traffic growth due to 5G user migration will not be as great.
2. The OTT bit rate is continually reduced. Wang gives the example of OTT whose bit rate in 2023 was reduced by 27% on 2022.
3. The average time mobile users spend on their devices is thought to have peaked, and now flatlined at around 160 hours per month.

Firstly, there will be a shift from user-generated content (UGC) to AI-generated content (AIGC), meaning the amount of content produced will rapidly grow. For context, AI has produced 15 billion images in 18 months, more than the total number of photos taken by humans since photography began. That’s just since the start of 2023!

Secondly, AI will enable device interaction in multiple forms (such as voice, touch, and video), which is expected to extend consumer interaction time, up from the current average of 5.3 hours per day that the average person spends on their phone.

Finally, there will be an increase in AI mobile phones and AI wearable devices, which are expected to become ubiquitous. 5G Advanced will be needed to meet the requirements of these higher-rate and larger-capacity devices. The proportion of these device shipments is expected to increase from 11% in 2024 to 90% in 2030.

To Home:

5G Advanced will allow FWA customers to have a fibre-like experience, increasing making 5G a mainstream choice when it comes to home broadband technologies.

In the era of 4G, the average data rate of FWA was around 20 Mbps – enough to be a supplementary choice for the home broadband market.

“Three years after the commercial use of 4G networks, just 30% of 4G operators released FWA services  Now, three years into the 5G era, around 50% of 5G operators have put the FWA service into commercial use,” said Wang. “In the 5G Advanced era, we predict that 70% of 5G operators will commercialise FWA services by 2026. FWA is changing from a supplementary choice of home broadband to a mainstream choice.”

To Business:

One example is in the IoT (Internet of Things) market. 5G IoT deployment has faced two large challenges: that the terminals are expensive and difficult to expand, and the solution relies on an active power supply and is not applicable to high-density deployment scenarios.

5G Advanced will help solve both of these problems through its RedCap and Passive-IoT technologies:

– RedCap: the device price of RedCap is more than 60% lower than that of 5G NR, which can promote the rapid increase of connections in high-value scenarios such as video connections.

– Passive-IoT: Passive-IoT provides 10 times more coverage  than the RFID technology. The cost of labeling can therefore remain within one yuan. It also provides location services. In the future, the number of potential connections will reach 100 billion.

2024: The year of 5G Advanced?

Concluding his Day 0 speech, Wang emphasised his optimism that 2024 will soon be viewed as the start of a new era for 5G. “The standards, technologies, ecosystem, and business elements are all ready,” he said.

“Huawei looks forward to working with the industry to build a healthy 5G-A ecosystem, promote 5G-A standard upgrade, and share the dividends of 5G-A development,” concluded Wang.

At Mobile World Congress Shanghai 2024, James Chen, President, Carrier Business at Huawei, gave a keynote speech entitled « Secondary 5G Innovation: Charting a New Course for Business Success ».

While primary innovation unleashes tech dividends, secondary innovation accelerates business success – and there are numerous examples of this from throughout history.

The compass was invented in China, making it possible for humankind to travel the sea. In the 16th century, Magellan completed his first round-the-world voyage. Later, with the help of high-speed gyroscopes, navigation developed rapidly, achieving the current annual global maritime trade of US$500 billion.

As early as the days of ancient Greece, the prototype steam engine was invented, and in the 18th century Britain’s James Watt successfully improved the concept, leading to the first industrial revolution. With the invention of internal combustion engine and motor, the automobile industry achieved prosperity.

If we look at mobile communications, after the Italian scientist Marconi completed transoceanic wireless communications, with the invention of mobile phones, mobile communications completely opened up the development of mobile communications. By the end of 2023, the number of global mobile users reached 8.6 billion.

This shows that primary innovation releases technological dividends, and secondary innovation accelerates business prosperity. At present, 5G is at a historic moment of secondary innovation.

Secondary 5G innovation will supercharge experience, business, and monetization

ICT technology, represented by 5G, is accelerating its integration into all fields and links of China’s economy and society. China has built the world’s largest and most advanced 5G network. As of April, the number of 5G users in China had exceeded 880 million, accounting for 52% of the world’s total. China’s 5G base stations account for two-thirds of the world’s global base stations, and the number of 5G IoT connections exceeded 30 million. China is leading the world in terms of 5G development scale and quality.

Just as Watt’s improved steam engine opened the industrial revolution, China’s secondary 5G innovation accelerates business monetization and opens a new stage of business success from three aspects: user scenarios, network-cloud-intelligence synergy, and ecosystem collaboration.

Example: Translating inspiration into opportunity

In Kaifeng, Henan Province, there is a famous blind date show. Many young people come to sign up to find a partner, speaking up bravely to show their affections. When the show begins, the walls, the hills, and the opposite teahouse are all crowded with enthusiastic tourists, and the front row is crowded with live streamers.

Many live streamers will use multiple mobile phones, at the same time connected to multiple livestreaming platforms. If network stuttering occurs, they may lose followers. The streamers’ top concern is ensuring that they can live stream among thousands of mobile phones onsite, with high-definition, non-stuttering images. Chinese operators have found the answer to this scenario.

Scenario innovation: Reinventing the value of user groups and scenarios to accelerate multi-metric network monetization

To meet the differentiated requirements of live broadcast for network experience, 15 carriers in China have subscribed to live broadcast packages that provide heavy traffic and guarantee live video upload experience, greatly increasing their ARPU.

There are four considerations for developing live broadcast packages: first, the potential customers must be found quickly; second, the package is accurate; third, the experience is stable; fourth, the user can stay. With the large uplink and preferential network access capabilities of 5G, operators meet the specific requirements of live broadcasters in an end-to-end manner.

Live broadcast scenarios open the door to upstream network monetization. With new capabilities such as service-level acceleration, and deterministic experience, we can gradually extend to more scenarios, more people, and more applications, reconstruct the spatial and temporal value of people in scenarios, and accelerate multi-dimensional network monetization.

Integrated innovation: New Calling as a new entry to information services with network-cloud-intelligence synergy

The new call is one of the hot spots for the second innovation of 5G services: 5G + cloud + AI. Through the collaboration of network, cloud, and intelligence, converge and innovate to build a new entry point for digital services.

Its original innovation intention, based on AIGC, focuses on fun for young people, big subtitles for the elderly, real-time translation for overseas business travelers, and ultimately on ensuring a good product experience.

Of course, business success requires continuous incubation of high-value scenarios and high-quality applications, refined operation assurance, and continuous innovation of Internet marketing.

The new call service uses the dialup disk of a mobile phone as the entry, providing a HD interactive call experience, and continuously evolving to providing all-scenario information services.

The development of new calls goes through two phases. In the first phase, AIGC is used to build products based on HD call experience and expand the number of subscribers.

In the second phase, high-quality applications are built quickly by incubating high-value 2C and 2B scenarios. In the future, multiple call products will be integrated to build a full-scenario information service portal through network, cloud, and intelligent collaboration.

Cloud mobile phones have achieved a « real-like » experience. The next steps are for image resolution to be upgraded to 2K, and latency gradually reduced to 100 ms – in effect achieving the real experience.

In terms of operation, Zhejiang Cloud T Card launched one SIM card = cloud mobile phone + sponsored traffic + cloud disk + rights, and the cloud mobile phone business developed rapidly. In the next phase, Huawei will work with carriers to continuously develop ecosystem and product evolution, incubate new AI applications.

Integrated innovation: IoV with network-cloud-intelligence synergy

Unmanned delivery vehicles can flexibly avoid vehicles and pedestrians and actively identify traffic signals. More than 1000 such delivery vehicles will soon be deployed in Shenzhen. Unmanned delivery vehicles perform video backhaul and remote control through 5G networks, which will bring new opportunities for operators.

In the next five years, 100 million new online vehicles will be added worldwide every year.

In the passenger car market, 4G connectivity remains the mainstream. As cars become more and more intelligent, 5G is overwhelming, and mobile phones, homes, and cars will be deeply integrated. The high-performance eMBB module and the RedCap cost-effective module can meet the high-end and low-end connection requirements of automobile enterprises respectively.

In the commercial unmanned vehicle market, 5G large uplink has met the requirements for 1080p HD video backhaul. QoS and slicing will further ensure video backhaul and remote control.

Integrated innovation: IoVT with network-cloud-intelligence synergy

RedCap can provide the connection capability with optimal performance and cost. Currently, the core, module, and device ecosystem of RedCap is mature, and the industry traffic package has been successfully implemented.

In terms of industry, the RedCap Industry Summit was recently held in Suzhou to discuss the expansion of 5G IoT and build billion-level connections. In terms of the market, Huawei will continue to build standard products that can be quickly replicated and provide continuous coverage of 5G networks.

Collaborative innovation: E2E industry collaboration boosts video service traffic

Currently, whether consumers watch short videos, long videos, or video calls, the resolution is 540p or 720p. At a recent forum in Shanghai entitled “Enjoy HD China: AI era mobile video high-quality development forum”, Huawei proposed the « 1080P silent opening » initiative to improve consumer experience, enhance VIP user stickiness, and make full use of China’s leading network capabilities.

The number of naked-eye 3D terminals is also growing rapidly, and the 3D content ecosystem is becoming mature. We hope to promote further breakthroughs in 3D content, technologies, and experiences through multi-industry alliances to achieve win-win results.

Advancing from 5G to 5.5G to unlock more business opportunities

Leading operators are moving from 5G to 5G-A. Over 30 operators have completed 5G-A technical verification and 15 operators have started commercial deployment.

5G-A enables smart bicycles to move towards vehicle-road collaboration and expands the business space from connectivity to cloud. 5G-A supports passive IoT and opens up 100 billion new IoT spaces.

5G business success is not achieved overnight. Instead, it involves exploration, practice, and innovation. Huawei is willing to work with operators and ecosystem partners to promote secondary 5G innovation and jointly usher in a new stage of 5G business success through scenario innovation, convergence innovation, and cooperative innovation.

News

The deal is expected to increase the scale of Nokia’s optical networks business by 75% 

Nokia has announced the acquisition of California-based Infinera, a global supplier of optical transport networking solutions, for $2.3 billion, as the Finnish company looks to expand its optical networking in North America. 

The deal is expected to “strengthen the company’s technology leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market,” said Nokia. It expects to make €200 million of net comparable operating profit synergies by 2027. 

The transaction, valued at $6.65 per share and working out at $2.3 billion, represents a 28% premium over Infinera’s closing share price on June 26, 2024. The deal will be financed with at least 70% cash and up to 30% in Nokia stock.  

“In 2021 we increased our organic investment in Optical Networks with a view to improving our competitiveness,” said Nokia President and CEO Pekka Lundmark in a press release. 

“That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles,” he continued. 

After the recently announced sale of XX, Nokia confirmed that its network infrastructure will be reshaped on three pillars: Fixed Networks, IP Networks and Optical Networks. 

Just yesterday, Nokia announced that it will offload its subsea unit Alcatel Submarine Networks (ASN) to the French state for €350 million, solidifying its intention to focus on its core network infrastructure portfolio. Nokia will retain a 20% shareholding along with board representation to ensure a smooth transition, at which point the French state will take the remaining 20%. 

Keep up to date with the latest international telecoms news by subscribing to the Total Telecom newsletter 

Also in the news:
Nvdia and Ooredoo launch data centre deal 
Nexperia to Invest 200 Million USD in Hamburg
US launches probe into Chinese telcos over data concerns 

This Industry Viewpoint was authored by Eli Katz, Founder and CEO of XConnect

Fraudsters are ramping up their attacks on messaging services and it’s draining revenue streams. SMS is a hugely valuable channel for brands with one of the highest engagement rates, and yet it also still holds a large untapped business market. Despite this, it is facing an uncertain future due to a sharp rise in fraudulent activity. … [visit site to read more]

News 

The move is a huge investment in the North of England, and will create the UK’s third Microsoft datacentre 

Microsoft has announced that it will build a huge data centre on the outskirts of Leeds, on a site costing £106.6 million. 

The deal was announced by Rotherham based property development group Harworth, who said the deal was the largest in its history.  

The hyperscale data centre site will be comprised of two plots, one of 27 acres valued at £52.9 million, and one of 21 acres valued at £52.2 million. The development company has said the site will bring around £4 billion to the local economy and create many jobs. 

Not many additional details, such as completion dates, were disclosed. 

Microsoft currently has two data centres in operation in the UK; one in London and one in Cardiff. Back in November, the company announced an investment of £2.5 billion in expanding its next-generation AI data centre infrastructure across the UK.  

The plan includes bringing over 20,000 advanced Graphics Processing Units (GPUs) to its sites in London and Cardiff by 2026, which are essential for machine learning and AI model development. The investment aims to meet the growing demand for efficient, scalable, and sustainable AI-specific compute power, positioning the UK as a hub for cutting-edge technology. The investment is the company’s largest in its 40-year history in the UK.  

Prime Minister Rishi Sunak called the investment a “turning point for the future of AI infrastructure and development in the UK.” 

Join the conversation on the North’s connectivity sphere at next year’s Connected North event, 23-24 April in Manchester – get discounted tickets here! 

Also in the news:
Nvdia and Ooredoo launch data centre deal
India concludes underwhelming 5G spectrum auction
US launches probe into Chinese telcos over data concerns 

Two years after India’s Department of Telecommunications (DoT) sought views on the need for overhauling laws governing the telecommunications sector (and nearly 75 years after the last relevant legislation of the sector) India has a new, updated Telecom Act. It came into effect on 26 June.

The Telecommunications Act 2023 (the year refers to when it was introduced rather than when it became law), replaces a number of earlier laws, including the Indian Telegraph Act 1885 and the Indian Wireless Act 1933.

It’s clearly an understatement to say that technology has changed a lot since then. At the very least, many definitions and terms are completely different, but provisions for spectrum allocation and right of way also needed looking at, along with regulations related to ease of doing business and penalties for offences and non-compliance.

Which seems to be what has happened. As India’s Economic Times points out, there is now a simple regulatory framework. The licensing regime has been replaced with an authorisation mechanism. Right of way rules (a big problem a few years ago) have been updated.

There’s a clearly defined framework for spectrum assignment, including efficient spectrum utilisation, and an adjudication mechanism to resolve disputes before they go to law.

There are also provisions to take necessary measures for national security and public safety. In particular the Act confers power on the government to take temporary possession of telecom networks during public emergencies, including natural disasters. In addition there is now a framework for blocking and interception.

Obviously there’s a lot more to this legislation: there are 11 chapters and 62 sections in the new Act. But the long wait before its arrival makes it clear that legal frameworks are in danger of being left behind by telecoms in some territories.

Indeed, operator Cameroon Telecoms (Camtel) recently suggested that the country’s parliament needs to reform outdated legislation and provide a robust legal framework for the country’s digital economy.

Some legislators clearly agree. Tellingly, Bara Julien, president of the Parliamentary Network for Information and Communication Technologies, is quoted as saying: “Our telecoms laws are obsolete as they date back to many years. But the evolution of technology is constant.”

It’s a point that could be made in many markets with outdated telecommunications laws. How quickly will they respond?