“5G extraordinary and multi-dimensional experience attributes open multi-paths for monetization, adding both commercial and social values.” This was the message highlighted by Peng Song, president of Huawei's ICT strategy & marketing, during the 5G Business Success Summit at the 2023 Mobile World Congress.
Today, more than 240 5G networks have commercially launched, almost twice the number of 4G subscriptions during the first three years that 4G was launched.
And there amassed some 1 billion 5G subscribers by the end of 2022 — significantly faster than the comparative growth in 4G subscribers, which took more than five years to reach that mark. “The great news is a solid financial impact that the leading 5G operators are getting as we speak,” Mr. Peng said.
Among those who have benefitted from their 5G investments are operators in China, Thailand and UAE.
Mr. Peng stressed that the rapid 5G user migration has served as the foundation of their business success, saying, “It enables operators to immediately benefit from 5G values in scale. To be more specific, shorter — and greener, more efficient network.”
He said that 5G enables faster ROI (return on investment) thanks to the lower 5G bit cost, better user experiences and faster user migration and package upgrade. The more traffic is consumed, the higher the revenue.
Based on the Huawei MI analysis, Mr. Peng explained that ROI relies on how long it takes to migrate 30% of traffic to 5G. For example, five years of traffic migration make ROI longer than five years, while three years of migration will allow a faster ROI of less than four years.
In addition, if FWA (fixed wireless access) or 5GtoB services are launched, the ROI will be further speeded up to less than three and half years.
However, 5G user migration may not yield the expected results at first. Mr. Peng said that during the beginning stages of 5G user migration, the overall power consumption still increases, which is a challenge to many operators. However, as the 5G traffic ratio exceeds 30%, Mr. Peng said that the power consumption, even of high-traffic sites, begins to decrease.
Regarding the consumer business, Mr. Peng suggests the continuation of innovation to drive more value and leverage both premium downlinks and untapped uplinks. In terms of the downlink, the first option is to assign different levels of priority to different 5G plans. This will lead to different download speeds for different users.
Given the same location, the speed of the “VIP” users is obviously higher than the common user. Moreover, Huawei is also exploring, along with some operators, the offering of even better experiences to VIP users through the guaranteed bit rate, which is GPR.
Mr. Peng further explained that uplink has not yet been greatly monetized. With 5G, operators in China started offering uplink, especially in busy locations or large events.
One operator in China, for example, provides 30 minutes uplink add-on package for an additional 20 RMB. Moreover, there is an anticipated demand for uplink from end-to-end and office applications, with around 5 mega-BPS. However, demand requirements are seen to be up to 25 Mbps in the future, which will also open more uplink monetization opportunities.
Another change in consumer trends that Mr. Peng noted was the rise of AI and its impact on mobile networks. “As we know, AI can produce contents extremely fast. Compared with PCG and UGC, which normally will take hours or days. AIGC, AI-generated content only takes seconds,” he said.
Mr. Peng said that the traffic generated by AI will increase exponentially, offering more monetization opportunities.
Looking ahead, he said, “When AI assistant interacts with humans on real-time navigation or video analysis, the requirements on mobile networks would be at least 15 Mbps uplink, around 20-millisecond latency rate with ubiquitous connectivity.”
He said that by the end of 2022, there had already been 95 commercial networks offering 5G WFA service and over 10 million subscriptions. “Thanks to the rapid evolution of 5G technology, such as new radio carrier aggregation and a millimeter wave, FWA user speed is now in the GBPS range. It has been a real 5G quick-win service,” noted Mr. Peng.
More importantly, the fiber-like experience has come to fruition, and this is due in great part to the rapid evolution of 5G technology, such as NR carrier aggregation and mmWave, FWA user speed reached up to 1Gbps.
One of the 5G FWA success stories happened in Finland, where the first operator commercially launched a 5G FWA with guaranteed contractual speed, resulting in a 25% increase.
Another such success was in Saudi Arabia, where an operator offered a fiber-like FWA package and bundled multiple services, including video and cloud gaming. In just three years, it has already seen 500,000 users, contributing 10% of its overall mobile revenue.
Mr. Peng identified two potential markets for 5G FWA: the Copper Sunset in developed markets and high-speed broadband access in emerging markets.
In rural areas in Europe, for instance, a large number of copper users cannot upgrade to 100 Mbps. Replacing copper with 5G FWA helps those consumers gain better experiences.
In emerging markets, meanwhile, fiber penetration is still quite low. Africa, for example, has only reached a rate of 1.6%.
Speaking on another 5G monetization path, Mr. Peng underlined enterprise business, 5G business to business (B2B). By the end of 2022, 38 operators had already deployed over 350,000 5G private lines, and the business models were also mature, well-defined and tested.
In an interesting case, Mr. Peng pointed to Germany, where 5G is helping a small football club to monetize its games via live broadcast.
Mr. Peng also emphasized the value of the 5G private network. “The key is to open the door to a comprehensive enterprise DICT business, and therefore, besides 5G toB connection, operators can leverage cloud, edge computing and value-added service as a business to provide real holistic business partnerships to the enterprise.”
He added that an operator in China sees that 5G private network business can facilitate three to ten times the revenue of enterprise DICT business. This prompts the major carriers in China to take 5G B2B as their group strategy.
Lastly, Mr. Peng said that in just one year, the number of 5G private networks deployed by carriers outside of China has doubled. And the leading industry players have started to adopt 5G private networks, enabling this market to continue to grow rapidly.
In closing, he said, “Towards the future, I believe 5G will continue to accelerate operators’ business development with guide strategy.”