To promote user migration to 5G, these tasks need to be done in advance

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After the issuance of 5G licenses on December 15, promoting the full commercial use of 5G has become the focus of operators. This requires the continuous maturity of 5G technology, the continuous enhancement of 5G network coverage, and sufficient scenarios to attract users to migrate to 5G. In addition to the basic conditions of 5G technology and 5G network, what work needs to be done to promote users to quickly migrate to 5G?

1. 5G entry threshold needs to be adjusted dynamically

On November 1, 2019, the three major operators simultaneously launched their respective 5G packages. Although we have no conclusive evidence to prove that the three major operators have conducted internal coordination, the 5G packages launched by the three major operators can be said to be completely at the same price, and no major changes have been made since the first anniversary.

Although the three major operators launched a 30% discount on 5G packages at the beginning of this year, the packages offered by the operators after the discount still exceed the average monthly communication expenditure of most users in terms of the consumption capacity of the general public. When one trick failed, the operators had to come up with another trick and immediately launched a 30 yuan 5G data package.

Even 5G traffic packages are not available to every user. Operators have set a minimum consumption limit for 5G traffic packages. That is to say, only when the basic package exceeds 49 yuan can a 30 yuan/month 5G traffic package be applied for. Although this operation lowers the entry threshold for 5G, it still significantly raises the user's communication expenses in disguise.

The operating data of operators show that in fact, since the 4G era, the ARPU value of users has been showing a clear downward trend. This is due to both the strong driving factor of speed increase and fee reduction, and the influence of disorderly competition within operators. This fact shows that the original practice of operators to increase user ARPU by upgrading communication generations did not work, so the situation in the 5G era will not be surprising.

As for the various private network applications for 2B users, in addition to providing demonstration cases, operators also need to provide more flexible ways or models for promotion. At least the model similar to the 4G era, which invested heavily to provide users with "turnkey" services and then charged usage fees, is difficult to sustain. After all, the ability of 5G private networks to burn money is amazing.

2. The penetration rate of 5G mobile terminals needs to be improved

It has been a year and a half since the license was issued in June 2019. Although the whole society pays great attention to 5G mobile terminals, not many people actually pay for them. Although this is due to the fact that 5G mobile terminals themselves are not mature enough (such as poor heat dissipation capacity), there are also influences from 5G networks and packages, but more importantly, it is due to insufficient promotion efforts.

Data released by the China Academy of Information and Communications Technology show that from January to November this year, the cumulative shipments of 5G mobile phones in the domestic market reached 144 million. Although this number is large enough, it is not large enough compared to the more than 1.6 billion mobile phone users and more than 1.3 billion 4G users in the country. Even compared with the penetration rate of 5G packages, this data still has a lot of room for improvement.

The monthly report data released by the operators showed that as of the end of October this year, the number of 5G package users developed by China Mobile and China Telecom alone exceeded 200 million. Although China Unicom has not yet announced the scale of its 5G package users, it is estimated that the total number has exceeded 50 million. If this is calculated, the scale of 5G package users in my country has exceeded 250 million.

There is a huge difference between the 250 million 5G package users and the 144 million 5G mobile terminal users. On the one hand, it shows that 5G mobile terminals have not become a common choice for most people, and on the other hand, it also shows that the promotion of 5G mobile terminals is not strong enough to effectively leverage the consumer market.

Although the price of 5G mobile terminals has dropped from tens of thousands of yuan to within a thousand yuan range, in order to really attract users to spend money on 5G, operators need to push terminal manufacturers to further reduce prices and promote sales, while truly improving the cost-effectiveness of 5G mobile terminals. After all, users are becoming more and more savvy, and relying solely on past routines is not enough to meet the current task.

Limited by the huge marketing cost pressure and the requirements of superior management, it is impossible for operators to pay a large amount of real money to subsidize mobile terminal manufacturers as in the early 4G era. Operators should try more non-cash resource support, such as opening up their own user big data treasure trove and helping terminal manufacturers with precision marketing through in-depth data analysis.

3. 5G-specific applications need to enter the market as soon as possible

Although the whole society is very enthusiastic about 5G, there is still a certain gap between 5G and creating unique value for society. One of them is the lack of 5G-specific applications, whether 2B or 2C. In order to promote 5G application innovation, although the three major operators have established many innovation research and development funds and joint innovation funds, the real results are far from appearing.

Although the three major operators have very high expectations for 5G messaging, after WeChat has extended from a social node to an all-round entrance to social services, the moat around instant messaging is already very deep. How much room for development is there in the operators' 5G messaging market? We believe that whether 5G messaging can achieve a sensational communication effect similar to the initial shake effect of WeChat directly determines its future development trend.

Whether it is directly entering from 2C or indirectly through 2B, the call effect of 5G-specific applications is indispensable to promote the migration of users to 5G. If operators cannot create new use value for users, then it will be difficult for users to provide business value for operators. Objectively speaking, this value supply and demand relationship essentially determines the fate of 5G.

Should we wait until 5G networks are mature before finding application scenarios, or wait until application scenarios are mature before supporting 5G networks? There needs to be a basic balance between the two. Although operators are also trying hard to promote the effective connection between the two, from the current situation, operators need to mobilize more people from the society to participate in application development or scenario exploration.

The impact of the COVID-19 pandemic at the beginning of the year and the complex global economic situation have profoundly affected the development of 5G. Before the profitability of operators themselves is significantly improved, whether it is cars waiting for roads or roads waiting for cars, operators should further increase 5G marketing efforts while investing heavily in the construction of 5G networks, improve 5G monetization capabilities, and strive to promote the early realization of a virtuous cycle of 5G supporting 5G.