The service providers have already started harvesting the fruits of 5G investments across the world and this has created a ‘certainty effect’, said Peng Song, President of Huawei’s ICT Strategy and Marketing, Huawei, at the ongoing Mobile World Congress (MWC) 2023 recently.
“There are more than 240 5G networks commercially launched, almost twice the number of 4G networks in the first three years. There were one billion 5G subscribers by the end of 2022. To compare, it took 4G more than five years to achieve that number, and more than 800 5G smartphones are available, and the great news is a solid financial impact that the leading 5G operators are getting as we speak,” said Peng Song. Huawei recently convened 5G Business Success Summit at Mobile World Congress 2023 at Barcelona, Spain.
The Road to 5G Monetization
However, the service providers need to adopt innovative strategies to monetize 5G. Huawei’s analysis revealed that the fast migration of 5G users and traffic is the key to successful 5G monetization. Peng Song mentioned that if an operator migrated 30% of traffic to 5G eMBB in three years, it would take less than four years to see Return on Investment (RoI). This time period can be further shortened if the operator deployed Fixed Wireless Access (FWA) and ToB services.
He further elaborated on the energy efficiency aspect of 5G networks. “5G has the higher energy efficiency than 4G. In the initial phase of 5G user migration, the overall power consumption still increases. However, as the 5G traffic ratio exceeds 30%, we have found that the power consumption of high-traffic sites even started to decrease,” said Peng Song.
Several Paths to Ensure Compelling 5G Experience and Faster Monetization
5G networks come with several new-age capabilities to help service providers deliver a superior experience. For instance, operators can provide a guaranteed downlink and uplink speed for VIP users.
Another emerging capability that is helping service providers accelerate monetization is 5G Fixed Wireless Access (FWA) services. Nearly 95 operators had commercially introduced 5G FWA services for more than 10 million home users by the end of 2022.
Elaborating on the FWA opportunities for the service providers, Peng Song said, “We can identify two potential markets for 5G FWA. Copper Sunset in developed markets and the high-speed broadband access in emerging markets. While in Europe, rural areas, a large number of copper users cannot upgrade to 100 mega-BPS. Replacing copper with 5G FWA benefits those consumers getting better experiences and operators, of course, lowering their expense.”
“On the other hand, in emerging markets, the fibre penetration is still quite low. 5G FWA has become the first choice for 100 mega-BPA’s home browned access in those markets. Because of fast time to market, plug and play, and the less cost in medium and the load density household areas,” he added.
Leveraging 5G Private Networks Opportunity
Another key 5G monetization opportunity for telcos is 5G private networks. “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,” said Peng Song. He mentioned that China Mobile believes 5G private network business can facilitate three to ten times revenue in enterprise DICT business.
“We are pleased to see that in just one year, outside of China the number of 5G private networks deployed by carriers has doubled, and the top industry companies have started to embrace 5G private networks, and this market will continue to grow very rapidly,” said Peng Song.
5G is unlike any previous technology and is not just about economic value to the operators but also brings massive social benefits. It not only helps the telcos in reducing their carbon footprint but can also bring down the digital divide.
He urged the industry to use Huawei’s G.U.I.D.E. business blueprint to maximize the potential of 5G and to move from `5Good to 5Great’. “5G networks bring experiences to mobile users and fiber-like experiences to households. That’s `G’. Second, this powerful network ability of 5G can support uranium experiences-based monetization in not only downlink but also uplink. That’s `D.’ Third, of course faster user and traffic migration is the foundation of 5G business success, which shortened the ROI and achieve greener network. That’s `E.’ In addition, 5G private network together of other technologies can facilitate three to ten times revenue enterprise DICT business segment which opened a new blue ocean market, and that’s `I.’ Lastly, simplified 5G networks management together with value baed intelligent operation is another successful dimension, and that’s `U’,” said Peng Song while explaining the G.U.I.D.E. principle. From 2024 to 2030, 5G will continues to accelerate the service providers’ 5G monetization with G.U.I.D.E strategy.