5G Monetization and Operational Excellence

The beauty of the wireless industry is in its constant reinvention. Each network evolution cycle presents a new set of opportunities to the countries and communities, incumbents, and upstarts. Each generation provides a new set of tools, breakthroughs, and possibilities to take the user experience to the next level. The leadership also often changes hands, new players emerge to disrupt the flow. Some who were the shining light in one cycle are humbled even humiliated in the next one. The sands of time are constantly shifting – the models, the established wisdom are as fickle as the vanishing sunlight on a hilltop.

The work of pioneers like Marty Cooper gave the US its lead in the 1G cycle, establishing players such as AT&T and Motorola, the pioneers of the first cycle. For 2G, the center of gravity shifted towards Europe as the likes of Ericsson, Nokia, Orange, Telecom Italia, Deutsche Telekom, and Vodafone innovated on the business model along with the technical evolution to help rally around GSM and create scale like the world had never seen before. It was also the start of the CDMA vs. TDMA vs. GSM wars that occupied the ecosystem in North America for a bit but brought to the fore the disruptors like Qualcomm, Samsung, LG, Sprint, and Verizon.

The introduction of iMode by NTT DoCoMo shifted the momentum to Japan and 3G cycle created new winners and losers. Europe’s wireless market made a terrible mistake with expensive spectrum auctions and the ripple effects of that strategic blunder are felt to this day. The 3G cycle was short lived as the ecosystem was about to be turned on its head yet again. Apple’s introduction of iPhone (followed by Google’s Android) will shift the dynamics of the industry so drastically that mobile operators will go from controlling over 85% of the revenues to less than 10% in one cycle. 4G cycle became all about what’s running on the network. The applications and services, the Appstore business model gave US its leadership position in 4G. Operators in the US rode the data tsunami surge all the way to the bank.

Through the 40+ years of wireless whirlwind, the two of the biggest markets were always playing catch-up. Because of weaker ecosystem, uncertain policy, lack of funding and ambition, and unremarkable leaders, China and India wireless markets though growing by leaps and bound were never really “exciting” or considered “leaders.”

Then, 5G arrived.

5G cycle started in earnest in 2019 with South Korea, China, and US kicking the upgrade cycle. India started its 5G deployment journey in Q4 2022. While the press and politicians tie themselves in a gordian knot figuring out who is winning the 5G race, analyzing the available data, the wireless industry center of gravity has been slowly but surely moving east. This has been true across multiple dimensions of ecosystem growth, monetization, and operational metrics.

Europe, the doyen of the 2G era has unfortunately been left so far behind that it is no longer considered a region for tech innovation. It remains mired in utopian technologism. Europe has been a constant reminder for the last two decades what a sustaining bad policy regime can do to a country’s ability to be at the forefront of invention and disruption.

As of Q1 2024, China has more 5G subs than rest of the world combined. India has reached over 150M subs in a matter of only 6 quarters making it the fastest growing market. China is generating more 5G enterprise revenue than all the western countries combined. Indian consumers are consuming more GBs than the US consumers on a per capita basis. Jio manages more traffic than all the Western European operators combined. Indian operators are highly efficient in their operations compared to their western counterparts managing their opex and costs with a fine comb and disciplined rigor. China has done a remarkable job of integrating new age tools into the workflow of their industries and have seen instituting automation at scale.

If you want to understand 5G industrial monetization and operational excellence, look east.

While the west is playing around with the new technology and business models, these are already performing well in China and India for several months and years. Good ideas can come from anywhere. Sometimes they have to be tinkered with to adjust and adapt but it is always useful to understand why something works irrespective of where.

It is not just the Asian behemoths, there are plenty of lessons from Japan, Korea, Indonesia, and other players in the region as well.

The paper discusses in detail the lessons from the stupendous growth of 5G in the eastern hemisphere with the help of data and case studies. This knowledge is directly applicable to the strategies for not only the current 5G cycle but is also helpful as industry, regulators, and players plan the 6G roadmap.