VIEWPOINT

China is at the forefront of developing the 5G ecosystem, leading to a significant increase in the revenue of all its three major service providers. The success of the country’s three major carriers demonstrates the revenue-growing potential of 5G technology.

China Mobile has recorded revenue growth of 10.5% and mobile revenue growth of 2.5%. On the other hand, China Telecom and China Unicom reported overall revenue growth of 9.4% and 8.3%, respectively. This corresponds with an increase in the 5G penetration rates from 6.7% in Q1FY21 to 28.5% in Q1FY22 to 44.6% in Q1FY23. This is mainly because of the incredible success the three telecom players achieved in rapidly migrating users to 5G.

The 5G ecosystem is at a crucial juncture. While the carriers have succeeded in growing their revenue by migrating users to the new technology, they need to now focus on the new capabilities for both individuals and businesses.

Understanding the two waves of 5G

“There are two waves of benefits in 5G development. First, the conventional user migration coupled with the traffic stimulation model has facilitated good results in China and among the first wave of 5G carriers outside China. The second wave is the model of “experience-based monetization through existing users along with the development of new services” and evolution towards a 5.5G. This can enable more powerful IoT/IoV and upgrade the overall 5G industry,” says Richard Liu, President of Global Carrier Marketing and Solution Sales, at Huawei. He was speaking at the ongoing Mobile World Congress Shanghai 2023 during the 5G Business Dialogue Salon.

Several Chinese and international carriers have already significantly increased revenues by enabling a rapid migration of existing users to 5G, which is the first wave of developing the 5G ecosystem.

China Mobile recorded a 10% increase in Average Revenue Per User (ARPU) for 5G players vis-à-vis 4G telcos. This has led to a revenue increase of 10.5% for the Chinese carriers. On the other hand, AIS in Thailand reported a 15% increase in ARPU, leading to revenue growth of 2.3. Zain KSA focused on Fixed Wireless Access (FWA) which led to ARPU growth of as much as 40% and a revenue increase of 14.8%.

“Specifically, 5G improves user experienced rates and delivers on higher-definition and smoother video services, thereby improving DOU and traffic volume, which translate into increased revenues,” explained Richard Liu.

The industry now needs to focus on the second growth wave to move from 5Good to 5Great by creating value-based operations and new pathbreaking 5GtoC and 5GtoB services. The second wave will allow the carriers to create use cases based on user segmentation and develop new services and industry upgrade. China is taking the lead in the second wave of 5G growth by developing use cases like new calling, cloud phones, naked eye 3D, 5G private networks and passive IoT, among others. For instance, New Calling allows telcos to enhance voice and video calling, which can potentially unlock a market worth hundreds of billions of dollars.

Addressing the growing needs of businesses 

In the coming times, several 5GtoB services will accelerate the digital transformation of enterprises leading to significant gains for the telcos.

“5GtoB is a new growth engine that has driven continued rapid growth in China, whose success has been replicated in many industries outside China. The strong capabilities of 5.5G will enable industry upgrade,” says Richard Liu.

Several new uses are leading to the growth of this market. A case in point is China Unicom’s 5G package for streaming, which allows 50% improved uplink speed and higher priority. This has led to a 76% increase in ARPU for the telco. Another example is 3 Hong Kong’s 5G package for stock trading which allocates two times the network resources for priority assurance.

5G private networks is an important use case of this segment. In China, this market has grown from just $0.2 billion in 2020 to $0.5 billion in 2021 and $1.1 billion in 2022. Globally also, the telcos realize the importance of this segment leading to an increase from 104 private networks in May 2022 to 209 in May 2023.

As the industry moves from the first wave of 5G growth to the second wave, it must work together to further 5G development and exploration to maximize revenue. The industry needs to accelerate the adoption of 5.5G to confidently move 5Good to 5Great. The growing adoption of 5G use cases means the industry must move towards 5.5G to delight people and businesses with new use cases and to address the growing expectations of digital users.

Network builder and UK broadband ISP toob has today announced that their coverage via CityFibre’s existing Fibre-to-the-Premises (FTTP) network has been expanded again. This time they’ve moved toward East Sussex and are now becoming available to homes in Worthing, Brighton and Hove. Just to recap. The operator, which was originally backed by £75m from the […]

Broadband ISP Virgin Media UK (VMO2) has today announced that they’ve officially started selling services powered by their new 10Gbps capable XGS-PON based Fibre-to-the-Premises (FTTP) lines, which is currently being rolled out as into new areas, via Nexfibre, and as an upgrade on their legacy Hybrid Fibre Coax (HFC) infrastructure. At present around 14.3 million […]

Consumers hoping for some respite from spiralling price hikes on their broadband ISP and mobile operator bills will have to keep waiting. Yesterday’s meeting between the Chancellor of the UK Government, Jeremy Hunt, and the heads from all of the UK’s major regulators, including Ofcom, appears to have produced nothing new. At the end of […]

A new Lords Committee report has today become the latest to try and tackle the age-old problem of Digital Exclusion (i.e. getting everybody online and ensuring they have the right skills). The Committee finds that the scale of the problem is a “direct consequence of political lethargy” and highlights the UK Government’s “lack of a […]

Press Release

By connecting to its metro fibre ring around Birmingham and national fibre network, ATI’s low-cost wide footprint dark fibre network will enable businesses in the region to benefit from enhanced connectivity and colocation services, ultimately supporting their future growth and success. 10 and 100GB services as well as dark fibre connectivity will be available for ensuring maximum flexibility and scalability of network solutions.

Kenny Roberts, CEO of ATI Fibrenet said, “ATI’s low-cost network is a very efficient method of providing end to end solutions to customers. Connection to Proximity’s data centre in Birmingham will further streamline and simplify the overall process by providing customers easy access to both networking and colocation services from a single provider.”

Commented John Hall, Managing Director-Colocation, Proximity Data Centres: “We welcome ATI Fibrenet to our edge and data centre facility in Birmingham and look forward to a strong partnership. This latest addition to our growing list of network providers reinforces our commitment to providing comprehensive and reliable connectivity solutions to our customers. With their low-cost and wide footprint dark fibre network, ATI brings a valuable new offering that complements our existing services.”

ATI Fibrenet minimises civils build and reduces environmental impact by deploying its dark fibre network through existing infrastructure.  ATI’s AI powered Quoting platform is another exciting aspect of the service offering by allowing customers to self-provision and customise networking and colocation services according to their specific requirements.

Press Release

KDPOF (leading supplier for high-speed connectivity over fiber optics in harsh environments) proudly announced that the European Commission has granted access to the 8.1 billion European investment for their projected packaging plant for optoelectronic devices in Spain. “The funding supports us in making our plans of manufacturing ICs in Europe come true in the near future,” stated Carlos Pardo, CEO and Co-founder of KDPOF. “European fabs only manufacture approximately 10 percent of semiconductors worldwide, making us dependent on Asia and the United States. We will pioneer the manufacturing of automotive optoelectronics in Spain in high volume, thus reducing this dependency.”

Close to their headquarter in Tres Cantos, Madrid, KDPOF is advancing a high-quality packaging factory for state-of-the-art optoelectronic devices. In addition, KDPOF is developing a new and innovative optoelectronics packaging technology. It will be applied for the first time to produce the upcoming transceiver IC for high-speed automotive optical communications.

Incorporating AI, sensors, and processors in self-driving vehicles requires KDPOF’s technology to interconnect all components robustly and inexpensively using fiber optic links within the vehicle. Since 2014, with the launch of the first transceiver, KDPOF leads high-speed optical communications for the automotive industry and has international clients like Daimler.

IC Manufacturing: Silicon Wafer, Assembly and Testing

The manufacture of a chip consists of three fundamental processes: the first is the creation of a silicon wafer that serves as the basis for the microchip, the second is the assembly, and the third is the testing to ensure quality. It is these last two steps that KDPOF brings to Tres Cantos. “The manufacturing of the silicon wafer is a process that requires very large volumes to be profitable, and for a small company it can hardly be profitable,” added Carlos Pardo. “For the latter two phases, which are packaging and testing, the machines needed are relatively inexpensive. These stages can be done at more reasonable volumes, as we have now in the automotive industry. We’re excited about building an encapsulation and testing factory in Madrid for large volumes.”

EU Funding for Microelectronics in Europe

The European Commission has approved, under EU State aid rules, an “Important Project of Common European Interest” (IPCEI) to support research, innovation and the first industrial deployment of microelectronics and communication technologies across the value chain. The project, called “IPCEI ME/CT”, was jointly prepared and announced by fourteen member states: Austria, Czechia, Finland, France, Germany, Greece, Ireland, Italy, Malta, the Netherlands, Poland, Romania, Slovakia, and Spain. The member states will provide up to 8.1 billion Euro in public funding, which is expected to unlock an additional 13.7 billion Euro in private investments.

There are 56 companies participating in this project. Among the Spanish companies are Innova IRV Microelectronics, KDPOF, Openchip, and Semidynamics Technology Services. The proposal has a deadline of development in 2032, although the intent is that the commercialization of products will take place beginning in 2025. It is also expected that these 68 projects will generate a total of 8,700 direct jobs.

News

UK alternative network providers (altnets) are experiencing mixed fortunes. On the positive side, the likes of Gigaclear and CityFibre continue to bullishly celebrate their continued expansion, whilst others are falling foul of tough economic conditions – most recently Broadway Partners who went into administration at the end of May.

The situation isn’t eased by the consumer concerns over whether they can trust an altnet.

New research published by comparison website Uswitch found that only 15% of broadband customers answered positively when asked “Do you know what a broadband alternative network altnet is?” and only one-in-three consumers said they would consider using a new or unfamiliar provider.

Ernest Doku, telecoms expert at Uswitch.com, commented “The main challenge altnets face is that no one knows who they are. So, when they offer lower prices with incredible advertised speeds, consumers understandably may find it hard to be sure if they can trust them over the big names who have been around for decades.”

The irony of the situation will not be lost on the altnets. Most broadband customers (61%) would like to see more variety and choice in terms of broadband providers in their local area and altnets are well positioned for the current economic climate, generally offering consumers better value for money (up to three times more performance per £ according to Uswitch) – but still consumers are wary.

Today Chancellor Jeremy Hunt meets with economic regulators to discuss how to protect consumers from the impact of high inflation, so maybe this is the moment for altnets to shine? Certainly, this is the view of YouFibre’s CEO, Jeremy Chelot, who commented “Alternative networks like YouFibre, Hyperoptic, and Community Fibre are working hard to offer consumers ultrafast internet at fair prices and it’s time for them to make their voices heard.”

To hear more from the altnets, make sure you attend Connected Britain this September…

British registered OneWeb, which is part-owned by the UK government, has announced that they’ve expanded the commercial availability of their new constellation of low-latency and ultrafast broadband satellites in Low Earth Orbit (LEO). The service is now available throughout Europe and to the majority of the United States. The operator has so far launched 634 […]

The UK internet connection testing firm SamKnows, which supplies services that are used by both major broadband ISPs and Ofcom to help measure network performance, has announced that they’re to be acquired by global networking giant Cisco and will be joining their ThousandEyes team to integrate their technology. The name SamKnows is a familiar one […]