Viewpoint
On Day Zero of this year’s MWC Barcelona event, Huawei hosted the 5G Beyond Growth Summit. Here, Li Peng, Huawei’s Corporate Senior Vice President and President of ICT Sales & Service discussed how carriers can achieve business success in 5G and how 5.5G will further unlock the potential of networks, creating new growth opportunities
Li began by reminding the audience that it has been five years since 5G launched into global markets, and since then, the way our world is connected had changed exponentially. He noted that 5G is the fastest growing mobile technology ever. Since hitting the market in 2019, there are now over 1.6 billion 5G users globally from 302 carriers in more than 100 countries in five years. With 4G, this same milestone took seven years to reach.
Despite less than 20% of global mobile subscribers using 5G currently, this generates 30% of all global mobile traffic, which in turn accounts for a huge 40% of all mobile service revenue. To tackle this, it’s essential that carriers find new ways to monetise 5G to bring this revenue back up. Let’s take a look at some successful examples of 5G monetisation.
Because 5G can deliver up to ten times faster speeds than 4G and a lower cost-per-bit, Li continued, it results in increased investment in both home and consumer markets. In the home market, 5G Fixed Wireless Access (FWA) has been a success, as over 150 global carriers have launched 5G FWA services, which have connected three million households. Especially for carriers in the Gulf Cooperation Council, (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) it has become a lucrative income source.
Speed based pricing is another way to effectively monetise 5G. Charging customers different prices based on different speed tiers, has been done effectively in 21% of 5G carriers in countries such as Switzerland, Austria, UAE and Thailand. Similarly, providing more speed tiers in hotspot areas can result in monetisation. For example, a carrier in Thailand recently released a 5G Boost Mode add-on. Users can use this whenever they want to enjoy faster speeds in hotspot areas. Boost Mode plans only cost $1.4. They include 3 hours of faster speed and 5 GB of data. And these plans have increased average revenue per user (ARPU) by 20%.
Targeting plans at specific consumers is another viable monetisation option. For example, one Chinese carrier launched a plan with guaranteed uplink rates designed specifically with live streamers in mind. China has the world’s largest livestreaming market, and specifically in China’s Guangdong province, there are more than 300,000 livestream users who have increased ARPU by 70%. This model could be adapted to different types of users, such as business professionals or delivery drivers, to help monetise the experience of the existing consumer base.
New services emerging in the areas of 5.5G, AI and cloud convergence. Chinese carriers have, for example deployed services such as New Calling, cloud phone and glasses-free 3D. Since launching the services, they have over 100 million New Calling users and 12 million cloud phone users.
In the area of smart vehicles, 5G powered autonomous vehicles are being adopted in various sectors such as logistics, retail and security. In Beijing for example, 5.5G is being used to power hundreds of unmanned distribution vehicles that can travel at a top speed of 25 Km/h, whereas before it was 12Km/h. Therefore, more packages each day are able to be delivered at a faster speeds than a human employee, increasing efficiency and increasing revenues.
These are some examples of industry successes of 5G adoption and monetisation. As adoption increases and more customers are able to make use of the different opportunities that 5G can bring to both consumers and businesses. However, more work must be done to ensure than new growth in the industry is driven, to build today’s networks for tomorrow’s applications.
Li closes out the session by promising the audience, “Together with carriers, we will unlock the potential of 5G and 5.5G, and drive incredible new growth”.