Wang Jianzhou, director general of the China Association of Public Companies and a former China Mobile chairman (pictured), brushed aside concerns over the business case for 5G, noting applications for the technology will come in time.
In an interview with Mobile World Live at GSMA’s China Week event in Beijing, Wang explained attention around the next generation technology is shifting from technical capabilities to use cases following the release of 3GPP specifications for non-standalone New Radio (NR) in December 2017.
“The new focus is on applications. At present, we don’t have an existing business model”, Wang explained, adding applications and demonstrations conducted at the recent Mobile World Congress “are just the imagination of engineers and vendors,” and still “need to be tested in the market.”
He is optimistic 5G applications will emerge, noting the situation is similar to the year 2000 when governments issued 3G licences, but operators questioned the use cases for the technology: “It was only when Steve Jobs launched the iPhone did people realise what 3G was for. I’m sure in several years we will have plenty of use cases based on 5G.”
Focusing on China, Wang doesn’t see the lack of a clear business model as a problem in the short term because, while prices decline each year, traffic volumes increase faster than those reductions: “That is the lesson from 3G to 4G. There was a big price drop with 4G, but operators ended up having a little growth in revenue.”
In the long term, however, they need to find new revenue growth drivers: “It’s not an easy job but they must do that.”
Average monthly data consumption in China is about 2GB, but if operators move to unlimited 4G data plans Wang expects usage to soar to as much as 20GB. Operators’ 4G networks won’t be able to support that level of demand from users, so he reckons the first function of 5G will be to increase capacity.
The second phase for 5G will be ultra-reliable low-latency communication use cases, such as artificial intelligence (AI) applications: “We can do AI without 5G, but adding 5G enhances AI. For example, 4G networks can support consecutive translation, but simultaneous interpretation will require the data rate of 5G. Big data and IoT will also be key drivers.”
As for the timing of 5G launches in China, he suggested it’s good to wait for the standardisation process to finish. 3GPP will release standalone NR specs in June, and the Ministry of Industry and Information Technology is cooperating with China’s mobile operators on third-phase 5G technology trials.
“These two things will make 5G more mature. It’s best to take a step-by-step approach; true 5G will come to China in 2020,” he said.