WinWin Issue 43
Tao of Business
Corporate SVP, President of the Carrier BG, Huawei
Reimagine, Reinforce, Reinvent: Accelerating 5G Prosperity
-- During the session "FWA: The Real 5G Success Story" held at MWC Barcelona 2023, Li Peng, Corporate SVP, President of the Carrier BG, Huawei, gave a presentation entitled "Accelerating 5G Prosperity". He set out the three steps that the industry needs to take in order to fully tap into the benefits of 5G, and turn 5G from good to great. He outlines not only Huawei's vision for the future of 5G, but also the innovations that Huawei continues to make in the field, and that are already delivering remarkable results.
5G has progressed rapidly since its commercial rollout three years ago, and made a lot of exciting advancements in 2022. Today, over 1 billion people use 5G to watch sports events in high-definition. And millions of households worldwide use 5G broadband for communication and experience-based entertainment.
5G is already good, but it can be great
Today, 5G adoption is picking up speed: in three years, 5G has achieved the level of rollout that 4G took 5 years to achieve. Clearly, 5G is already good. However, 5G coverage is still unbalanced among different regions and countries. Consumers expect a better 5G experience, while industry digitalization requires more from 5G. The question is: how can we turn 5G from good to great?
We need to take three big steps:
• Reimagine 5G business
• Reinforce 5G coverage
• Reinvent 5G products and technologies
Let's take a closer look at each of these 3 steps.
Reimagine: innovative metrics for 5G monetization
In the 5G era, leading carriers monetize 5G based on experience-centric metrics. China Mobile, for example, is exploring how to monetize traffic in new ways. By working with popular apps such as Douyin — the Chinese version for TikTok — China Mobile precisely optimized the 5G network coverage to improve user experience.
In addition, one European carrier successfully launched 5G pricing plans based on speed tiers. Bundling services with 5G plans is also a promising direction for monetization, with AIS Thailand having increased their revenue from such plans.
Reimagine: capitalizing on the natural desire for better experience
A recent survey found that, when watching a three-minute HD video, the human brain produces the same amount of dopamine as during a 30-minute run. Evidently, high-quality short videos are the experience consumers want.
Meanwhile, free-viewpoint videos, where viewers can watch a video from any point of view, is also gaining traction in sectors like sports and entertainment.
Reimagine: new business models based on new experiences
In addition to experience-centric metrics, we also need experience-based business models. According to a third-party survey, 70% of consumers are willing to pay for better 5G experiences.
In the next three to five years, the market growth rate of Network as a Service (NaaS) for carriers will double. We're glad to see that GSMA has made substantial progress in this market, such as with the open source project CAMARA. Moving forward, carriers will continue to improve their network capabilities, to provide more guaranteed experiences.
Reimagine: monetizing premium 5G home with "1+1+X"
5G home broadband is another great way to monetize the 5G experience. In Northern Europe and the Middle East, carriers bring users upgraded experiences by adopting a "1+1+X" model, which means "1" high-quality 5G mobile network, "1" home Wi-Fi network, and QoS guarantee for "X" video and gaming apps.
One leading Finnish carrier improved its average revenue per user (ARPU) by over 60% with this model, with 90% of users saying that they would recommend the service to others.
Reimagine: more capabilities means more opportunities
More business opportunities emerge as carriers expand their network capabilities. Today, more than 50% of carriers have deployed 5G fixed wireless access (FWA) services, while only 30% deployed 4G FWA, showing that new players without any 4G FWA experience are also able to profit from 5G FWA.
In the home market, there are still 200 million copper broadband lines in urgent need of upgrade. And 5G FWA, with up to 250 Mbps speeds, offers a faster, better alternative to xDSL.
In addition to the home market, small- and medium-sized enterprises (SMEs) are also a huge market for 5G FWA. We expect to see up to 60 million leased lines deployed in places like campuses, stadiums, and gas stations.
Reinforce 5G coverage: "more for more"
Deep 5G coverage helps carriers win in their markets. This principle was recently confirmed by GSMA after looking at the top-20 carriers in terms of 5G coverage. The 20 carriers with the most 5G sites enjoyed 10% ARPU growth, compared to the industry average of only 1%. There are two things carriers can do to deepen their 5G coverage.
First, carriers can improve their indoor coverage — over 80% of user complaints are related to poor indoor experience. Improved site solutions, like Huawei’s MetaAAU, can penetrate more walls inside buildings to improve user experience. Huawei's Indoor solution, Lampsite, can also be used to provide excellent indoor experiences.
Second, carriers can improve the coverage in suburban and rural areas. By focusing on wide-scale 5G deployments, carriers will increase the total user base and unlock new revenue growth.
Reinvent: new 5G AAUs for new traffic surges
To support the growing demand for 4G and 5G services, Huawei is working continuously to reinvent our solutions, focusing on new breakthroughs to improve 5G coverage and reduce energy consumption.
Last year, we launched MetaAAU — our third-generation 5G AAU. It has twice as many antenna elements as our previous models, allowing it to provide 30% more capacity and deeper coverage, or the same coverage with 30% less power. MetaAAU is already a top choice for global carriers seeking to increase their 5G coverage.
This year, we are launching our Meta BladeAAU. It combines the larger antenna array from MetaAAU with our Blade concept, allowing for simple deployment of 2G, 3G, 4G and 5G on a single pole. This is an ideal solution for markets like Europe where space in mobile base stations is limited.
From 5G to 5.5G: 10x capabilities for 100x opportunities
Leading carriers are now working closely with 3GPP to advance the 5G standard and make the leap to 5.5G. 5.5G will expand on 5G, but will be faster, more automated, and more intelligent. It will support more frequency bands, and deliver 10 times higher network throughput. It will be 10 times more energy efficient, and provide 10 times greater operation efficiency than 5G.
5.5G will also open up new possibilities. For example, it will introduce new capabilities like Passive-IoT to replace the legacy RFID technologies with expanded range and more capabilities, as well as provide integrated sensing capabilities.
Indeed, there is much more potential to be unleased from 5G in order to accelerate 5G prosperity. But achieving all of this will no doubt take the concerted efforts of the whole industry. As Huawei continues to work closely with global carriers and develop innovations to accelerate 5G prosperity, I look forward to seeing what we can create together.