Six predictions for the 5G market in 2020

2019 is the first year of 5G worldwide. More than 55 telecom operators have provided 5G services with speeds 6-8 times faster than 4G to approximately 10 million customers.

The 126,000 base stations opened in excess by China Mobile, China Telecom and China Unicom have laid a solid foundation for China's leading development of 5G. The Ministry of Industry and Information Technology has proposed to strive to achieve 5G network coverage in all prefecture-level cities across the country by the end of 2020.

Looking back at 2019 and looking forward to 2020, here are my predictions for the 5G market next year.

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Prediction 1: 5G tariffs will be further optimized and high barriers will become a thing of the past.

In 2019, the average monthly expenditure of China Mobile customers was 47.1 yuan, while the starting price of 5G packages was 128 yuan. The nearly three-fold premium means that there is a large room for optimization of 5G's entry-level rates in 2020.

For operators, only by rapidly expanding the scale of 5G customers can they fully leverage the network scale effect and further drive the prices of network equipment and mobile phones closer to 4G levels, thus forming a virtuous cycle of "more customers, more base stations, lower rates, and slightly increased revenue."

Looking ahead to 2020, 5G will no longer be a "toy" for a few people. The 60 yuan price, which is about 20% higher than the 4G price, is likely to become the new "low" price for entry-level products, and 5G packages priced below 100 yuan are expected to become the mainstream choice for mass customers. The average monthly mobile data usage will quickly move towards 20 GB from the current 7.56 GB.

Prediction 2: 5G network services will move from a three-kingdoms war to a four-kingdoms war, and consumers will have more choices.

In 2019, the Ministry of Industry and Information Technology issued a total of four 5G licenses. In addition to the three major operators, China Radio and Television Corporation made a shining debut. However, how the 60MHz bandwidth of Radio and Television Corporation on the 700MHz golden spectrum matches the huge network investment of 5G has attracted widespread attention in the industry, and the arrangement of China Telecom and China Unicom sharing 5G base stations has made the market worry about insufficient competition.

At the end of 2019, the State Grid Corporation of China, with an annual revenue of more than 2 trillion yuan, announced the establishment of a 5G joint venture with China Radio and Television Corporation. The plan to build 113,100 base stations made the emergence of the fourth 5G operator almost certain. With the abundant funds and huge network resources of the State Grid Corporation of China and the rich content and sales channels of China Radio and Television Corporation, the "second" China Mobile is about to emerge.

More 5G network services mean greater supply. Chinese consumers will benefit from full market competition and become the biggest winners, with better coverage and lower rates. In 2020, China's market services and business innovations will surely provide best practices for the development of global 5G.

Prediction 3: 5G network coverage will transform from ubiquitous to precise, and on-demand coverage is expected to become the first principle.

Every coin has two sides. The high performance of 5G also means high energy consumption and high cost.

At present, the energy consumption of 5G base stations is about 3.5 times that of 4G, and the procurement cost is about 3 times that of 4G, which is neither environmentally friendly nor economical. It will be difficult to build a 5G network with ubiquitous coverage like the 4G network with more than 5 million base stations in China for a long time. 4G and 5G networks will coexist for a long time and on a large scale. 4G will change life and 5G will change society hand in hand.

Specific areas and industries that have demands for high-speed data, large bandwidth, low latency, high reliability, and access to massive devices, such as central business districts, factories, ports, mining areas, education, medical care, logistics, entertainment, etc., will be the first to become 5G commercial areas, with technology, services, and business models coexisting effectively.

For regions and industries that do not have high requirements for bandwidth, latency, and security, especially those that are highly cost-sensitive, 4G will continue to provide ubiquitous network signal coverage services for a long period of time. On-demand coverage will become the key to 5G network construction.

Prediction 4: 5G mobile phones will advance from high-end to mid- and low-end, and 5G will become the new standard for mobile phones.

By December 2019, 62 5G mobile phones have been released worldwide, and more than 29 have been launched on the market, which is far better than the performance of 4G commercial use in the same period. The lowest price of 1,999 reflects the maturity and growth of the 5G industry ecosystem from chips to complete machines.

In anticipation of 5G’s rapid growth, Huawei, Samsung, Xiaomi and other companies have launched new high-end mobile phones with a price premium of no more than 20% over 4G phones. OnePlus has launched the world’s first mobile phone supporting 600MHz spectrum in cooperation with T-Mobile in the United States. China Mobile has released its own brand of 5G mobile phones to add confidence to the market. Apple, with the belief of providing the best customer experience, has been working hard to optimize terminal performance and the adaptation of terminal and network interoperability.

In 2020, 5G will become a standard feature of all new mid- to high-end smartphones. The new iPhone will continue its legendary story of being the king of the mobile phone industry since 2007, while foldable screens, flexible screens and cost-effectiveness will become the killer features of the Android camp. The huge battle for the 5G replacement market will intensify.

Prediction 5: 5G terminals will rapidly diversify, and new forms of consumer and industry applications will emerge.

5G's large bandwidth, low latency and massive access open the door to the future for terminal diversification. 2019 will be the last year that smartphones will occupy the crown position of terminals.

As of December 2019, 137 5G terminals of various forms have been released worldwide, more than twice the number of 5G mobile phones released in the same period. Among them are 13 hotspot devices, 62 CPE devices, 34 modules, 7 routers, 3 robots, 3 TVs, 2 plug-in data cards, 3 tablets, 2 drones, 2 head-mounted displays, 2 laptops, 1 switch, 2 USB data cards and a vending machine.

In 2020, more appliances, including both consumer devices and productivity devices, will be embedded with 5G functions to provide real-time online smart connection services for individual customers and government and enterprise customers. In the near future, we will no longer count the number of 5G terminals for one reason: there are simply too many to count.

Prediction 6: 5G information security and fairness issues are growing and becoming an important social issue.

In 2019, 5G industrial modules priced at RMB 999 were launched. In 2020, 5G-related big data will grow at an exponential rate. With the rapid development of mobile Internet and the Internet of Things, the perception, transmission, collection and analysis of massive amounts of data have become the new normal in social life.

Data security is of primary concern. “When we haven’t figured out how to protect the flock, should we put all the sheep in a cage?” What is even more unavoidable is the issue of fairness. 5G’s change in society means that the “digital divide” has become a new “data divide”. How much data does each person and each country generate on the Internet, how much data is used, and how much data is used as means of production by third parties?

How to avoid being caught off guard and throwing the baby out with the bathwater is a realistic issue that all regulators, industry participants and consumers cannot avoid.

In 2020, social incidents related to information security and fairness will increase significantly, and more laws and regulations from the Cyberspace Administration of China, the Ministry of Industry and Information Technology, and local governments at all provinces will continue to be introduced.

The greatest value of 5G is to promote the digital transformation of society and become the most ubiquitous and trustworthy social infrastructure. The increasingly standardized and affordable artificial intelligence and blockchain-based security authentication technology will further promote the digital transformation and upgrading of society. In 2020, scientific planning, precise construction, and sustainable operation of 5G networks will undoubtedly become a major event for the whole society.