And what’s the path to 5G profitability?
Looking back on the transition from 3G to 4G, Huawei’s Mohamed Madkour, VP of wireless and cloud core network marketing and solution sales, said operators followed a “cap and grow” strategy that just doesn’t apply to the 4G to 5G transition wherein the two technologies will continue to co-exist for some time.
That means, even as operators race to commercialize and scale out 5G, “We all need to strengthen 4G first. Then we can think about where 5G makes sense then go ahead and deploy it,” Madkour said. This follows a three-tiered approach: Invest in 4G densification in a manner that eases the transition to 5G as possible; develop business cases using a non-standalone 5G network; then transition from non-standalone to standalone.
“Every 4G dollar is a 5G dollar,” he said, speaking during a panel discussion at the recent 5G Asia event at the Marina Bay Sands in Singapore. “And don’t forget, in parallel to this, cloud, edge computing AI, these are key…to make the business case.”
To that business case, right now 5G deployments are consumer-facing with the nuanced, enterprise-facing aspects yet to be fully fleshed out and brought to market at scale. SK Telecom was early to market with 5G and has gained more than 1 million subscribers in the five months since launch. But is SKT making money from that?
Takki Yu, SKT’s senior director and head of the access network development team, said this month the operator saw ARPU decreases in the past seven quarters and now it has stopped decreasing. “We are expecting…much more data use and many 5G users are consuming more multimedia service and not using Wi-Fi. This sign is very positive so we believe it can lead to an increase in ARPU as well.”
There was general consensus based on presentations and conversations at the conference that the real revenue from 5G will come from enterprise adoption for more specific use cases that draw on low latency and high capacity. In that environment, service will win the day, Anup Changaroth , Ciena’s CTO for Asia Pacific and Japan, said.
“You have to look at it from a revenue-generating perspective,” he said. “How do [operators]differentiate in a market where there’s multiple operators? 5G is really the first real technology that gives the operator a real opportunity to differentiate from a service perspective. I think there will be a compelling reason for them to move to 5G.”
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