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How to Build and Maintain a “Good Pipe”? – Experience Key for Long-Term Competitiveness

by Guang Yang | Aug 01, 2022

My last blog, How to Build and Maintain a “Good Pipe”? – Gigaverse Experience is the Foundation,  discussed how to build a “Good Pipe” by improving network capacity, coverage, and cost-efficiency. I would like to continue the discussion in this blog on why excellent user experience is critical for an operator’s long-term competitiveness and how an operator can achieve an excellent user experience efficiently.

Experience-based pricing – the most common 5G approach

As pointed out by my colleague – Phil Kendall – in his recent blog, “in markets where unlimited data plans are more common, this model of using 5G to sell larger higher-value data plans requires an adjustment, with tiered pricing based on speeds used with some success.” The unlimited plan speed tiering has been successful in some markets. For example, in Finland, “price plans supporting speeds of 100Mbps and higher have increased from 20% of data plans in use in 2016 to 65% in 2021, with 300-1,000Mbps plans increasing from 6% of use in 2019 to 17% in 2021 as 5G has grown. Over the last five years, ARPUs have increased by 15% in Finland.”

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The experience-based pricing plans have been successful in supporting 5G upgrades and improving value in the market. The increasing proportion of higher speed tier subscribers must demand better network coverage and higher capacity. Meanwhile, we could also see a number of directions of the 5G tariff evolution in the medium term. For example, pricing latency could allow operators to bundle cloud gaming into their 5G plans or offer a supplemental content subscription. Pricing uplink is another direction, particularly for live video broadcasting applications. China Unicom has provided a ‘5G Network Wizard Service’ option on the campus of Universal Beijing Resort. Targeting vloggers, the option offers an enhanced uplink service at RMB 19.9 (USD3.1) for 30 minutes.

Adopting new types of devices and applications, such as metaverse, will request further enhancements for uplink and latency experience. According to Strategy Analytics’ Metaverse, Augmented and Virtual Reality service forecast,  the CAGR of global AR/VR device shipment will be 35% in the next five years. This will create an excellent opportunity for mobile operators to monetize their 5G networks through experience-based pricing strategies, particularly based on latency or uplink speed.  

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Experience critical for B2B business

The growth of industry digitalization businesses indicates strong demands of enterprises for digital transformation. In the post-COVID era, ‘Digital transformation’ has become a common term in enterprises across all sectors, as they implement new technologies to develop new solutions, improve service delivery, increase operational efficiency, reduce cost, gain competitive advantage, and meet rising customer expectations. The digital transformation is also a new growth opportunity for telecom operators. For example, Chinese operators have recorded strong growth in the enterprise market. The exhibit below shows the enterprise business performances of Chinese operators in 2021, including the growth and the contribution to the overall growth of Chinese operators’ enterprise businesses.


Revenue Growth Rate

Contribution to Overall Service Revenue Growth

China Mobile



China Telecom



China Unicom



Source: Company’s annual reports and Strategy Analytics

When operators explore the opportunities in the B2B market, user experience is also essential for business success. With digital transformation moving forward, operators’ products and services will be tightly embedded into the production process of enterprise customers. The service quality will directly impact the enterprise’s production efficiency, cost, safety, etc. This will require a highly trusted relationship between operators and enterprise customers. It would be impossible for an operator to be involved in the core process of an enterprise digital transformation if it cannot build sufficient trust with the enterprise customer.

To build such trust, operators need to improve their current service quality and shorten the response time for customer requests, meanwhile, to improve network quality and differentiation capabilities by deploying advanced technologies.

A holistic approach to guaranteeing user experience

To guarantee user experience, telecom operators need to take a holistic approach. The network capacity, coverage, and cost-efficiency are fundamental factors, as discussed in my previous blog. Meanwhile, Artificial Intelligence (AI) and automation have been recognized as powerful tools for telecom operators to manage the user experience. AI can not only enable network automation but also open entirely new avenues for operators to monetize their networks and platforms. The most common uses of AI technology within an operator network and organization are in conjunction with data analytics. AI technology can be leveraged to assist in vital decision-making, problem-solving, and automating processes. Operators can also open their AI capabilities to support the digital transformation of enterprise customers.

For example, in Liuzhou Steel Group – the largest iron and steel conglomerate in South China – China Mobile collaborates with Huawei to provide Liuzhou Steel with a 5G and AI based Welder Cloud Eye quality inspection system. 5G-based cameras can collect images of welding lines in real time and perform automatic detection online 24 hours a day via AI. This not only reduces the manpower cost by 55% but also increases the recognition accuracy by 40%, with the welding quality recordable and traceable as well.

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Data has become one of the most valuable business assets in modern industry. Ensuring data security is an essential task of ICT infrastructure. For telecom networks and services, the security should be considered from a full lifecycle perspective, i.e., covering the technology standardization, product development, network deployment, and operation. As telecom operators play a central role in the process, operators should and must take the responsibility to improve the security of telecom networks and services through cooperation with industry partners.

To further improve user experience, telecom operators need to optimize the organization and processes, shorten the response time to customer demands, and enhance the ease of use of their services.  Operators also need to strengthen the collaboration with ecosystem partners, such as device vendors, application developers, cloud hyperscalers, etc., as user experience is actually determined by the entire ecosystem rather than by only an operator.

In summary, guaranteeing an excellent user experience is critical for telecom operators’ long-term competitiveness. For more detailed discussions about how operators guarantee user experience, please access the joint whitepaper of Huawei and Strategy Analytics: GUIDE to the Future.

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