From “Traffic ” to “Experience”, 5G E… – Mobile World Live
PRESS RELEASE: In the past five years, 5G has created remarkable commercial value and social benefits. Pioneer operators have enjoyed the first wave of dividends from 5G commercial use through traffic monetization. With the commercial use of 5G-A and the advent of the mobile AI era, new services are emerging, which poses higher requirements on experience and differentiated assurance. Besides, operators are also facing the pressure of slowing down mobile traffic growth and revenue growth. They urgently need to open up a new growth curve. The transformation from traffic monetization to experience monetization has become an inevitable trend.
During the 2024 MWC Shanghai, GSMA joined hands with industry partners to hold a conference session ” The Rise of 5G Advanced: From Commercial Availability To Social Success”. The session focused on the opportunities and challenges brought by 5G-A and provided in-depth insights into new opportunities for users’ experience requirements. MNO’s innovative pricing and experience-based monetization trends were also deeply discussed, offering a new reference for the future development of the mobile industry in the 5G-A era.
Innovative Business Models Stimulate New 5G Growth
According to the GSMA Intelligence investigation, global mobile traffic and operator revenue growth are slowing down. Global mobile revenue growth is about 3.8% in 2023 and is expected to decrease to 2% in 2029. In the long run, operators can’t rely on rising traffic itself to justify higher tariff premiums, the traditional single traffic monetization model is increasingly difficult to support continuous and rapid revenue growth. Operators need to change the single traffic pricing mode and implement multi-dimensional monetization business models through innovative tariff design to further stimulate 5G potential and inject new vitality into the continuous revenue growth of the 5G industry.
5G Multi-dimensional Capabilities Enable Differentiated Experience Monetization.
In the 5G-A era, new services, such as live broadcasting (uplink), cloud gaming (low latency), streaming media (downlink), naked-eye 3D, and VR/AR, pose differentiated requirements on network capabilities. And 5G-A features such as uplink and downlink high speed and low latency can support this new service experience assurance. Therefore, operators can rely on 5G-A’s multi-dimensional capabilities to innovate multi-dimensional business models. According to the GSMA Intelligence, the core applications of consumers are games and streaming media. Users need high-performance networks to ensure a good user experience of these applications. In leading 5G markets such as China and South Korea, ultra-high-definition (UHD) video-based content is one of the most consumed categories of 5G services, and consumers are willing to pay extra for a better user experience. In the future, the content ecosystem revolution brought by AIGC applications such as Sora poses new requirements on the uplink and downlink capabilities of mobile networks, creating more room for operators to monetize differentiated experiences based on 5G multi-dimensional capabilities.
Pioneer Operators Move Towards the “Experience Monetization” Era
In Europe, the 5G speed-tier based charging business model has become popular due to the large downlink capacity of 5G. Elisa, a Finnish operator, has implemented the speed-based charging mode at the beginning of 5G commercial use. Netherlands KPN recently released a three-level speed-tier package of 50 Mbit/s, 300 Mbit/s, and 600 Mbit/s. Its financial report in Q1 24 clearly states that speed charging mode has boosted revenue, adding 30,000 postpaid users and increasing ARPU by 5.2%. By April 2024, more than 30 carriers in 19 European countries, including DNA in the Netherlands, Switzerland Sunrise, TO2 in Germany, Vodafone in Spain, and 4iG in Hungary, have released speed-tier based packages and achieved good business returns.
In the Asia-Pacific region, leading 5G operators in China and Thailand actively invested in multi-dimensional experience monetization models. For the uplink experience, China Unicom Guangdong launched 5G live broadcasting packages to provide 150 Mbit/s or 200 Mbit/s ultra-high uplink rate guarantee for live bloggers. It is estimated that there will be 500,000 live package users by the end of the year. As the world’s first commercial deployment site of 5G-A, China Mobile launched multiple 5G-A experience packages and added new service rights such as cloud phone and new calling, enabling consumers to enjoy higher-speed and lower-latency mobile network services.
At the end of 2023, AIS Thailand launched the Living Network hotspot acceleration add-on package, which includes three modes: Boost (higher speed), Game (low latency), and Live (uplink). This package ensures a differentiated user experience with deterministic differentiation and increases the ARPU by 23%.
In the Middle East, typical MNOs explore new experience monetization paths through FWA user hierarchy. For example, UAE carrier du released the FWA game acceleration package during the SAMENA to achieve differentiated low-latency experience for specified games and provide OTT member rights such as Disney+. The speed-tier package of fixed home broadband services has become a common choice for carriers to release FWA services around the world.
In addition, the Open Gateway initiative proposed by the GSMA also provides new options for mobile operators to monetize their network capabilities to third-party OTT service providers. Through Open APIs, carriers can integrate and open network functions (such as network quality) to third parties, such as cloud providers and video stream service providers, which greatly reduces development and knowledge costs. OTT vendors embed 5G capabilities purchased from carriers into their products to quickly build better, more convenient new applications and services. For example, the Quality-on-Demand API enables application developers to optimize QoS configurations to provide better network experience for key application consumers such as online games and real-time streaming media. The differentiated pricing models can bring revenue growth, achieving a win-win situation among carriers, OTT providers, and users.In the future, with the advent of the mobile AI era, more emerging applications and fully upgraded multi-dimensional network capabilities complement each other. The experience monetization model will help operators continuously unleash the 5G-A momentum and achieve greater business success.
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