Service providers worldwide continue to embrace digitally advanced strategies to leverage the commercial potential of their investments in 5G. A paradigm shift in this approach has been the adoption of traffic value-based operations, a model championed by Chinese service providers. Crafting innovative applications and business models, they’ve exploited the unique experiences offered by 5G to generate notable revenue.
Meanwhile, service providers in Europe and the Middle East are profitably implementing rate-based charging models. Notable exceptions include Elisa in Finland and Sunrise in Switzerland, along with Etisalat in the UAE. The latter has rolled out a rate-ranked package, curating both rate-limited and unlimited packages for users, offering new avenues for providers to reap the benefits of their 5G investments.
One remarkable manifestation of 5G’s capabilities, namely its ultra-high speed, large bandwidth and extremely low latency, is the revolutionary new function scenarios it creates. One case in point is China’s booming live broadcast industry, predicted to generate approximately US$720 billion in revenue in 2023, according to recent reports. Indeed, 5G’s uplink potential is a driving force behind the industry’s growth. Capitalizing on this lucrative opportunity, China Unicom Guangdong launched a 5G live broadcast package, amassing an impressive user base of over 200,000 since October 2021.
Innovation isn’t restricted to China, however. Service providers from various geographical regions are growing their business through 5G-enabled operations, demonstrating a multitude of opportunities to monetize 5G traffic. From leveraging Fixed Wireless Access (FWA) services in the EU and Middle East, to creating industrial internet applications and solutions in the US and Europe, there is a surge in ingenuity.
The industry sees a relentless rise in pioneering 5G applications, from cloud claims to Naked-Eye 3D and Extended Reality (XR). A notable highlight was China Mobile’s launch of a virtual mobile phone which uses cloud technology, providing a more convenient, faster, lighter, and safer experience for the user. Equally impressive is its 5G New Calling feature, an ultra-HD, interactive, intelligent platform based on content operation, AI ecosystem, and innovation.
Clearly, the gaming industry is also reaping benefits from 5G. For instance, China’s cloud gaming market is predicted to expand to 180 million users by 2025, according to iiMedia Research. Service providers can capitalize on this boom by ensuring top-tier gaming experiences through robust 5G networks. Indeed, Hutchison’s 3 Hong Kong recently launched a 5G game acceleration package to leverage low latency and ultra-high speed, enhancing the gaming experience for users.
Looking back at the four years since 5G entered the mass consumer market, it is evident how it has significantly amplified service providers’ Average Revenue Per User (ARPU) through unique user experiences. As the 5G ecosystem continues to grow from strength to strength, the need for traffic value-based operations for effective monetization becomes increasingly essential. More than just basic services, the objective here is to add new revenue streams and develop novel business models. The inspiring efforts of Chinese service providers serve as a beacon, encouraging global counterparts to leverage traffic value-based operations, and advance the commercial success and user benefits of 5G technology.
