VIEWPOINT
The 5G ecosystem continues to grow, with the service providers expanding the 5G network and more service providers beginning to offer 5G services. There are now around 230 5G networks and 800 5G phone models in the world, catering to more than 760 million 5G subscribers.
There has been a definite acceleration in the business success of the service providers from 2021 till now. At the recent Huawei MBBF 2022, Peng Song, President – ICT Strategy and Marketing at Huawei, elaborated on the key success factors of 5G in his speech on 5G Business Success is Accelerating.
“G.U.I.D.E. is a strategy for operators who strive for success. It aims for efficient Gbps experience to 5G networks, cross-generational experience, automatic Operation & Maintenance(O&M), on-demand customization, and green network,” says Peng Song in his speech.
Huawei introduced the G.U.I.D.E. model some time back which stands for Gigaverse Initiative, Ultra-automation Speed-up, Intelligent Computing & Network as a Service, Differentiated Experience On-demand, and ESG More Bits Less Watts. It is designed to build ubiquitous gigabit connectivity, accelerate automation, and provide intelligent computing and networks as a service, offering differentiated experiences and enabling sustainability with green ICT.
The second factor is 5G user migration for large-scale business development. 5G can help the service providers boost Data of Usage (DOU) to ensure better profits. Further, Fixed Wireless Access (FWA) also gives service providers more growth avenues. The services can further boost this growth by exploring new use cases in 5G to consumer, 5G to Home and 5G to Business scenarios.
Boosting 5G toC monetization
With the accelerated development of 5G toC in the past year, leading operators have finetuned their strategy to monetize their 5G investments. While the telcos have been using data as the primary way to monetize Mobile Broadband (MBB) since 4G, 5G offers new opportunities to monetize their investments.
Peng Song elaborated on the new ways in which telcos can improve revenues. “In today’s era of live streaming, charging by uplink speed is also a significant strategy. For instance, German operators offer special tariffs to ensure a seamless live-streaming experience. On the other hand, a Chinese operator has tariffs to monetize low latency sought after by gamers,” says Peng Song.
Peng Song, President – ICT Strategy and Marketing at Huawei
Further, the 5G ecosystem allows the service providers to monetize new content and applications. Nearly 45% of 5G operators include OTT content in their 5G packages to improve their attractiveness.
The service providers can further boost revenue by feature content bundling. Peng Song shared the example of South Korean operators who are going into 5G XR content production. Typically service providers are focusing on XR and metaverse for better monetization of 5G networks. However, there are other ways as 5G is transforming traditional services.
“5G has transformed traditional voice, SMS, and RBT into 5G call, 5G message, and 5G VRBT. These services are quickly monetized thanks to the exceptional experience they provide to their massive user base. When we look at video, traditional formats have also transformed into higher definition, spatial, interactive formats that fascinate consumers. New business models such as freeview streaming have been released in multiple markets,” elaborated Peng Song in his speech.
Seizing 5G to Home Opportunity
Another crucial market for 5G services is 5G to the home, which is growing at breakneck speed. The number of 5G FWA users will reach 7 million by 2022 and 65 million by 2026, with a CAGR higher than 65%.
“Compared with 4G FWA, 5G FWA differentiates into two scenarios. One is Premium Home, which provides concurrent gaming and high-quality video. In addition, operators monetize multiple network capabilities including downlink, uplink, and latency,” says Peng Song.
Growing the revenue from enterprise segment
In the 5G to business segment, the private network revenue of the telcos continues to grow. The 5G private network revenue of the Chinese operators will exceed CNY9 billion or USD1.3 billion.
“Apart from widespread deployment inside China, 5GtoB has grown quickly overseas. There are over 100 mobile private networks deployed by operators out of China, and this number has doubled compared with last year,” says Peng Song. Today, 5G private networks are widely launched in over 10 vertical industries, and the virtual private networks with slicing technologies can bring down the time to market are particularly apt for energy, logistics and smart city applications.
As a technology, 5G is growing at a much faster rate than 4G. Since 5G was commercially launched three years ago, 5G to consumer users have grown seven times faster than 4G. 5G has covered more population, and there are more 5G devices compared to 4G in the same period. Similarly, 5G FWA subscribers will reach seven million with a CAGR as high as 65%, and 5G toB subscribers will also continue to grow exponentially. All this represents new opportunities for the service providers.