5G user development starts with focusing on high quality

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Recently, the Ministry of Industry and Information Technology issued a notice not to mislead or force users to apply for or upgrade 5G packages. From the current situation, in the face of speed and quality, the regulatory authorities pay more attention to safeguarding the interests of the general public and guiding operators to develop 5G with high quality.

1. The growth rate of 5G users in 2020 far exceeded expectations

Although China Unicom has not yet released its 5G user development data, China Mobile and China Telecom have been vying for the commanding heights of 5G user development. Judging from the monthly operating report data released by China Mobile and China Telecom, both operators have achieved results far exceeding their development goals.

Directly driven by the new infrastructure strategy, 5G development has accelerated. China Mobile expected to develop 70 million 5G package users at the beginning of 2020, and the actual number of users exceeded 140 million. China Telecom's situation is roughly the same, and the actual number of 5G package users has far exceeded the planned target at the beginning of the year.

2. Disorderly competition tends to continue to 5G

The rapid growth of 5G package users is related to the operators' continuous multi-dimensional discount marketing, and is also directly affected by the rapid development of 5G network construction. In the process of 5G package user growth, operators inevitably use the method of inducing users to migrate to 5G.

At the beginning of 2020, China Telecom's tit-for-tat 5G promotion not only directly hurt China Mobile, but also kicked off the prelude to disorderly competition in 5G. Throughout 2020, the three major operators competed to cut prices for 5G in various marketing campaigns, and even slanderous propaganda began to appear on a large scale, and the old ways of playing were revived.

The practice of operators slandering their competitors for their own business development not only damages the development order of the industry, but also harms the rights and interests of the majority of users. After all, the process of inducing users to migrate to 5G packages is not so worthy of scrutiny, and there are naturally various operations that infringe on users' right to know and damage their rights and interests.

3. Timely supervision to promote the healthy development of 5G

We have carefully read the notification requirements of the Ministry of Industry and Information Technology, which mainly include six aspects: attach great importance to service work, fully guarantee the user's right to know, effectively safeguard the user's rights and interests, promptly respond to social concerns, accurately grasp the service situation and strengthen supervision and inspection, with the focus on promoting the improvement of user services.

Although regulatory requirements start with promoting improved customer service, these service requirements will directly affect operators’ user development strategies. Although we are not sure that this is the temporary stopgap for the development of 5G package users, the impact may be similar. The reason is the imperfections of 5G networks, terminals and applications.

Data released by the China Academy of Information and Communications Technology showed that the cumulative shipments of 5G mobile phones in 2020 reached 163 million units, and the number of 5G package users of China Mobile and China Telecom has approached or even exceeded 250 million. If China Unicom is also included, the number of 5G package users in my country will most likely exceed 300 million.

There are 4G terminal users between the approximately 160 million 5G mobile terminals and the approximately 300 million 5G packages. This means that operators have developed a large number of 4G terminal users into 5G package users in advance. Although these users can use more low-cost traffic, they actually enjoy the 4G network and their ARPU has been passively improved.

Regardless of whether users realize that this involves pre-consumption, regulators have already taken action in advance to safeguard the vital interests of consumers. After all, in the current situation where there is a lack of network support and due scenarios, a large number of 4G terminal users enjoying low-cost traffic will inevitably cause the 4G network to be overwhelmed.

4. Network speed issues may become prominent during the 4G/5G shift

In fact, rumors about the 4G network slowing down or being slowed down have been hotly discussed. Regardless of whether equipment manufacturers are involved or not, the undeniable reality is that the 4G network has experienced a significant decline in speed, and with the popularization of high-definition and ultra-high-definition videos, the carrying capacity of the 4G network will become more prominent.

The regulators notified at the beginning of 2021 that the quality of 5G services should be improved. In addition to protecting the user's right to know, the considerations behind this may also include promoting an orderly shift between 4/5G. At least, a blind marketing operation should not reduce the user's sense of gain.

Under the new regulatory requirements, operators will inevitably invest a lot of resources in 5G terminal impact, strive to increase the penetration rate of 5G terminals, and promote the transformation of a large number of 5G package users into real 5G users, thereby effectively avoiding the embarrassment of 5G package users falling back to 4G packages.

To some extent, in addition to accelerating the development of 5G package users, operators in 2021 must also increase their efforts to retain 5G package users. Operators must come up with practical solutions to promote the popularity or penetration rate of 5G mobile terminals and accelerate 5G applications by expanding the scale of 5G users.

Although the penetration rate of 5G packages in my country has exceeded 20% by the end of 2020, has the effectiveness of 5G been realized? This question deserves deep thought by operators. After promoting the improvement of 5G services, will the regulators promote the improvement of 5G performance? We believe that the top management of operators need to study in advance.