PARTNER CONTENT: New services and experiences made possible by 5G can promote industry upgrades, with new business models and scenarios driving operators’ business growth.
At the end of 2019, 5G networks were commercially deployed in 25 countries and regions by 50 carriers, with that number predicted to climb to more than 170 by end-2020.
The era of mass 5G deployment and commercialisation is expected to usher in a new era of mobile communications. The International Telecommunication Union outlined three broad application scenarios for 5G: enhanced mobile broadband; massive machine-type communications; and ultra-reliable low-latency communication. 5G will not only bring more diverse service applications and unprecedented user experiences to consumers, it will also spawn new application scenarios for hundreds of industries, accelerate industry digitisation, improve industry efficiency and reduce operational costs.
For global operators, 5G looks to offer a chance to break out of the traditional pipe-centred business model, develop new digital services and foster new industry applications.
In the post-4G age, global operators all face similar challenges, including increasing telecoms services without a corresponding rise in revenue and difficulty making profits from new services. According to a report on the economic performance of the communications industry in 2018, published by China’s Ministry of Industry and Information Technology (MIIT), the growth rate of telecoms business volume is 45.9 times that of business revenues. This is a record high for the industry.
Demographic and traffic dividends are fast disappearing, with traditional service increases unable to drive business growth. New self-operating services, such as video and gaming activities, can be developed to expand the home market as well as the government and enterprise sectors. Now, the inevitable choice for operators is to transform from infrastructure operators into digital service providers and accelerate revenue structure optimisation.
The development of digital services may be restricted by factors including government policies, industry environment and operators’ strategic determination and capabilities.
In the past few years, practices by some leading companies show that digital services are benefitting from a wider user base, highly flexible tariff packages, more data and marketing channels, and better user experiences. 5G will create a range of digital service applications, including cloud VR, AR and gaming, which will place higher demands on operators’ network experience. For example, the end-to-end delay for cloud VR cannot exceed 70 milliseconds.
Operators also have unique strengths in terms of technological leadership and fast service provisioning.
These factors give operators the option to develop new digital services through top-down strategies, to drive their digital transformation and achieve long-term business success.
New experiences and models
Although 5G creates the opportunity for new digital services, relevant business models are required for business monetisation. New 5G technology has the potential to allow operators to break the traditional voice and traffic charging dimensions, explore differentiated experiences, such as speed and latency, and explore the multi-dimension monetisation mode of content rights. New models will be the key to maximising network value and achieving business success. Commercial 5G packages released by global operators show that they are enhancing their content value with video, VR and music by providing differentiated speeds.
In the 5G era, the change from traffic monetisation to experience monetisation and content monetisation will become inevitable. For now, global operators must solve the problem of how to move from KPI-driven network operations to experience-centred service operations. They also need to deliver differentiated experiences and devise a multi-dimensional monetisation model.
Exploring new scenarios
5G will be widely applied to the B2B sector, where the services will expand across dozens of industry vertical industries, such as healthcare, electricity, mining and logistics. Through the influence of network slicing, mobile edge computing, big data and cloud, operators can provide enterprises with deterministic network resource assurance and scenario-based 5G services, driving industry digitisation and creating a sizeable market for themselves.
Huawei SmartCare SLA assurance capability for B2B service
As they deploy 5G networks, operators will face new obstacles to efficiently plan network resources for B2B industry applications and provide enterprise-level service quality assurance and self-service solutions.
5G offers a historical opportunity for an industry upgrade and a huge market for the long-term advancement of new services, experiences, business models and application scenarios. However, it also poses a series of challenges on topics ranging from network experience to operational transformation.
With deep understanding of operators’ challenges in the 5G era, Huawei launched the SmartCare solution based on a unified digital platform to assist operators in their digitisation journey and sustained development in terms of the network, services and business. Empowered by these solutions, operators will be able to deliver the ultimate network user experience, create new digital services and continue to grow in the 5G era.
By Simon Liang, Service Experience Consulting & System Integration Department director, Global Technologies Services, Huawei