VIEWPOINT
Unlike previous standards, 5G offers an incredible opportunity to service providers to go beyond offering basic voice and data services. The combination of ultra-high-speed and extremely low latency, enabled by 5G, allows carriers to provide innovative and exciting use cases and a truly differentiated experience to their subscribers. This is also crucial for faster monetization of their 5G investments.
Service providers across the globe are also leveraging emerging traffic value-based operations to monetize their investment in the 5G. Chinese service providers have taken the lead in developing creative and traffic value-based operations to maximize the revenue-generating potential of 5G. Over the last few years, they have introduced several applications and business models to monetize the differentiated experience offered by 5G.
Further, an increasing number of service providers in Europe and the Middle East have successfully adopted the business model of rate-based charging. Apart from Elisa in Finland, Sunrise in Switzerland has also adopted rate-based experience-based charging. Similarly, Etisalat in the UAE has also introduced a new rate-ranked package based on the existing traffic package mode to provide a rate-limited and unlimited package for the users. This also offers new opportunities to service providers to monetize their 5G investments.
Live broadcasts, cloud gaming and more
Based on 5G’s capability to ensure large bandwidth, ultra-high speed and extremely low latency, the telcos are able to provide several new use cases like mobile cloud applications and improved HD video experience to their subscribers. 5G also allows users to experience high-dynamic video and three-dimensional audio.
Take the case of China’s dynamic trillion-dollar live broadcast industry. With about 515 million users or around 48% of China’s population, as of December 2022, e-commerce is the most popular type of live streaming in the country. The total revenue of China’s livestream streaming e-commerce is likely to touch RMB 4.9 trillion (US$720 billion) in 2023, says the same report. 5G, with its uplink capabilities, is providing an upswing to this industry.
To leverage this massive opportunity, China Unicom Guangdong recently launched a 5G live broadcast package to provide more traffic, ultra-high uplink rates and VVIP priority services for users watching and conducting live broadcasts. Since its release at the end of October 21, China Unicom has developed a significant user base of 200,000 users.
Several examples from different geographies demonstrate that 5G-enabled traffic value-based operations are enabling carriers to grow their business. For instance, China has demonstrated that it is possible to monetize 5GtoC traffic. On the other hand, carriers in Europe and the Middle East are focusing on Fixed Wireless Access (FWA) services. While South Korean and Japanese carriers are innovating in the Augmented Reality /Virtual Reality segment, and Europe and the US are developing industrial internet applications and solutions.
A growing number of 5G applications
5G allows telcos to offer truly pathbreaking and innovative use cases, like 5G calls, cloud phones, Naked-Eye 3D and Extended Reality (XR). A case in point is the recent launch of China Mobile’s cloud mobile phone, a virtual phone that runs on the cloud. It leverages China Mobile’s computing network and allows applications to run on the cloud, thus offering users a “lighter, faster, more secure and more convenient” experience. However, 5G-powered low latency is a key factor for its wider adoption.
China Mobile has also launched 5G New Calling, which promotes 5G video calling (VoNR) and can be used directly with the native dial pad of the smartphone. With ultra-HD, intelligent, and interactive capabilities, 5G New Calling builds platform products based on content operation, AI ecosystem, and interactive innovation.
Naked-eye 3D application is also becoming more mature in terms of end-to-end optical display, terminal R&D, content processing and user experience. It allows users to enjoy an immersive 3D experience without wearing any external device. 5G and 5.5G can accelerate the large-scale adoption of Naked-eye 3D applications and make immersive experiences accessible to a greater number of people.
Another segment which is benefitting from 5G is the gaming industry. In 2022, China’s cloud games market touched 4.5 billion yuan with 96 million monthly live users and a growth rate of 20%, according to iiMedia Research. It is likely to grow to 180 million by 2025. The service providers can monetize this boom in cloud gaming, mobile gaming and game streaming by building 5G networks designed to ensure a best-in-class gaming experience. The growth of the gaming industry depends on the quality of the user experience. Any short lag can mean the difference between win and loss. 5G allows carriers to ensure a superior gaming experience even when the number of users is high.
A case in point is Hutchison’s 3 Hong Kong recent launch of the 5G game acceleration package for gamers and the 5G stock king package for financial investors leveraging extremely low latency and ultra-high speed offered by 5G. Both the game acceleration 5G Supreme package and 5G Stock King package ensure a differentiated experience for game users.
5G has been commercially available in the mass consumer market for over four years now, and in this period, it is helping service providers grow Average Revenue Per User (ARPU) by providing a truly differentiated experience to their users. The 5G ecosystem is expanding and moving from strength to strength and the service providers must focus on traffic value-based operations to monetize 5G effectively. This is also crucial for carriers to go beyond basic services, add new revenue streams and develop new business models. The Chinese service providers are inspiring their counterparts in all geographies to leverage traffic value-based operations to use the 5G technology to provide pathbreaking use cases to people as well as businesses to ensure faster 5G monetization.
