How should operators coordinate the development of 4G/5G during the “gear shift period”?

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Recently, the two topics of "5G, 4G packages removed from the shelves" and "4G speed reduced" have frequently aroused heated discussions. Users believe that operators have chosen to sacrifice the rights and interests of 4G users in order to develop 5G. Previously, the Ministry of Industry and Information Technology made a statement: it has never and will not require operators to reduce or limit the 4G network speed. The national 4G network remains stable, and stated that the user's 4G network experience speed is affected by many factors, and it is not that operators reduce or limit the 4G network speed. Operators also stated that 4G packages are still on sale, but users need to go offline or contact customer service by phone to handle it.

Although these hot discussions have been responded to, users still have reservations about this. These questions can't help but make people think deeply: In the period of coordinated development of 4G and 5G, users have such a big reaction. Are operators really unable to balance the development of 4G and 5G? In the period of full and accelerated development of 5G, how should operators maintain 4G users?

Current development of 4G and 5G users

It has been a year since 5G was put into commercial use in my country. According to data from the Ministry of Industry and Information Technology, my country has built and opened more than 600,000 5G base stations and more than 150 million 5G terminal connections. According to the data released by operators in September, China Telecom's 5G package users have reached 64.8 million, and China Mobile's 5G package users have reached 114 million. It can be said that after the efforts of many parties, my country's 5G has developed rapidly and delivered a beautiful report card.

Although 5G business is in a stage of full acceleration, the main source of revenue growth is still 4G business. According to the data from the Ministry of Industry and Information Technology in September, there were 1.293 billion 4G users, a year-on-year increase of 2.3%, accounting for 80.8% of the total number of mobile phone users. It can also be seen from the operator's user structure data in September that 4G users still occupy a dominant position: China Mobile's 4G users accounted for 81%, and China Unicom's 4G users accounted for 86% (as shown in Figures 1 and 2). Compared with the huge number of 4G users, 5G users are still in a slow development stage. It has been nearly 7 years since the issuance of 4G licenses, and the user share of 80% is a normal growth trend, so it will take a long time for 5G user penetration to reach this value.

Figure 1 China Mobile’s 4G and 5G user penetration rate in 2020 (public data from China Mobile Limited’s official website)

Figure 2 Development trend of China Unicom's 4G users (unit: thousands)

Note: Data from the official website of China United Network Communications (Hong Kong) Co., Ltd.

As the demographic dividend of my country's communications industry gradually fades, there is limited room for further growth in users, and stock competition has become the main feature of the growth trend of mobile users. The development of 5G users cannot rely solely on new network entrants. 80.8% of 4G users are the main force for future migration to 5G. If operators only develop 4G or 5G, the effect will be greatly reduced. The growth of 5G users is inseparable from the stable development of 4G users. Therefore, in the process of developing 5G, it is crucial for operators to do a good job in maintaining 4G.

Causes of the Uncoordinated Development of 4G and 5G

In my opinion, the current development of 4G faces two main problems. One is that 4G packages are removed from the shelves too early. In the stage when 5G is running at full speed, 4G packages are gradually removed from the shelves, and the newly launched packages are mainly 5G packages. Various resources are gradually inclined to 5G. In the eyes of operators, this is a normal operation, but in the eyes of some 4G users, the removal of 4G packages, especially the "disappearance" of low-priced packages, will affect their freedom to choose 4G/5G packages, and they believe that their user rights are damaged. Second, the 4G signal coverage in some areas is not perfect. Since the commercial use of 4G, 4G has been popularized by the whole people, but there are still many areas where 4G signals are poor or even no service. Although the 4G network is affected by many factors, if the 4G network coverage is not done well, it will enter 5G so quickly, giving users too little time to adapt, which will inevitably lead to user dissatisfaction.

In addition, the 5G user experience is not always good. For example, the 5G network coverage problem. Users change to 5G packages and use 5G phones. They want to experience the feeling of super-fast network speed, but this feeling may only be experienced in the bustling urban area. Once you go to a remote place far away from the urban area, 5G will drop back to 4G/3G, or even no network. Another example is 5G applications. 5G commercial use has not yet launched a blockbuster application, resulting in 5G users not being able to experience more advantages of 5G.

In the "shifting period" between 4G and 5G, and under the influence of the general environment where 5G has risen to a national strategic position, operators will inevitably shift their development focus to 5G base station construction, 5G package promotion, etc., and in terms of 4G maintenance, it is inevitable that there will be a phenomenon of losing sight of one thing while focusing on the other. Whether it is 4G/5G signal problems or user experience problems, operators need to pay more attention and make timely improvements.

How to balance the development of 4G and 5G?

In the period of coordinated development of 4G and 5G, how to balance the development of 4G and 5G users, reduce complaints from 4G users and allow users to migrate to 5G spontaneously? The author believes that the following points need to be achieved.

First, continue to improve base station construction. Network construction is an important foundation for the development of 4G and 5G services. Signal coverage and stability are the basis for ensuring smooth user use and the key to improving user satisfaction with 4G/5G. At present, 5G construction can be accelerated in urban centers, and the pace of 5G construction can be appropriately slowed down for remote areas, giving priority to 4G network coverage. If most 4G users feel that the 4G signal in their area is relatively poor, operators need to continue to improve 4G construction, and develop 5G later on the condition that users have a good 4G experience, and promote 5G packages based on user consumption.

Second, diversify product policies. Operators do not need to blindly promote 5G packages to users. After all, the starting price of 5G packages is around 128 yuan, which does not meet the consumption choices of most people. Therefore, operators can first launch 5G experience packages to 4G users to enhance users' impression of 5G products, and collect users' feelings about using 5G and their willingness to upgrade during the experience period, and then further optimize the corresponding packages according to the user's experience, and finally recommend suitable 4G/5G packages to users after the user experience period.

Third, launch 5G blockbuster applications as soon as possible. In addition to network speed and package cost-effectiveness, the key point to attract users to apply for 5G is the popularity of 5G blockbuster applications. Just like when WeChat was launched, many users chose to switch to 4G mobile phones and 4G packages in order to try out new things. Nowadays, the price of 5G mobile phones has dropped to 1,000 yuan. If a popular 5G application is launched, a large number of users will be converted to 5G users under the general trend.

Fourth, improve service quality. The quality of service is an important factor that affects users' choice of operators, especially in the sales process. Good service can improve the success rate of business handling. At present, when some operators' customer service are conducting telephone sales, they often jump directly to the "help you handle" link before the user can hear the sales content clearly, which causes most users to choose to hang up the phone directly. Therefore, during the sales process, customer service must pay special attention to understanding the user's consumption situation and current needs in advance, inform users of precautions in a timely manner during the sales process, and respond to users' problems encountered during use in a timely manner. Do not selectively ignore the problems reported by users.

summary

At this stage, 5G development is still not mature enough, and the key points of users' hesitation about "using 5G" are mainly 5G network coverage and 5G package prices. Later, as 5G construction gradually improves, under the general trend, users will naturally use 5G, just like switching to 4G in the past. Therefore, operators do not need to worry too much about users not using 5G or being too aggressive in making users migrate to 5G. Now, in addition to developing 5G, they must also ensure the 4G experience.

Maintaining 4G users is the key to promoting future 5G growth and revenue. Only by coordinating steps can we achieve common development.