The commercial 5G services of 5G pioneers SK Telecom, Verizon and Telstra focused on 5G-ready versions of mobile and data plans across consumer and business segments, with SK Telecom the only operator promoting 5G-specific plans and applications early on. Some are now moving beyond the premium propositions that targeted early adopters/heavy data users with speed and data generosity, towards a mainstream audience as device pricing has come down and coverage increased. Efforts to secure new revenues have centred around FWA, Cloud/edge computing and private network services (skewed towards Enterprise).
Multiple factors are influence the approach that operators can take in terms of 5G monetisation: some constrain the choice of approach, while others enable new options. These factors can shift in intensity and change over time.
SKT was initially constrained by device availability and cost (it offers 5G-specific plans which would be of no interest to customers without a device). It offered generous subsidies to overcome this, but is now facing government pressure over those subsidies, as well as plan pricing as government wishes to democratise 5G access further. The South Korean 5G market is also highly competitive, which further impacts pricing possibilities. SKT is choosing to leverage several commercial enablers in order to extract revenue from its 5G network investments. Examples include providing unique 5G-optimised content (e.g. it has its own studio to create mixed-reality content), using non-communications specific capabilities (AI, robotics, cloud) to deliver 5G enterprise solutions and packaging up compelling 5G-inclusive propositions to address identified use cases.
Verizon’s choice of 5G spectrum constrained its commercial approach, particularly due to mmWave’s range and propagation issues. This has resulted in the sacrifice of some of its first mover advantage to T-Mobile, whose 5G mid band coverage is now wider. Verizon offers a “multi-band” 5G proposition, which has the potential to confuse customers as to the value of 5G (particularly versus its 4G network). On the plus side, it does offer a range of devices to improve 5G affordability and is leveraging unlimited data allowances and quality of service advantages in its 5G-inclusive propositions (particularly for 5G Ultra wideband offerings). It is also offering broad propositions for use cases including fixed wireless access and 5G Edge (it has initiated commercialisation of a 5G-inclusive IoT solution, venue/stadium specific services and private 5G, though these do not appear to be mainstream in the US yet).
Factors that confound 5G monetisation at Telstra include network coverage (5G coverage lags that of 4G) and market competition (competitors include 5G in all plans, while Telstra does not). Telstra has chosen to leverage its 5G leadership to boost the perceptions and performance of its network as a whole. Many of its propositions are not singled out as 5G services, though they may depend on the cost efficiency, capacity and performance improvements that are delivered by 5G (e.g. Network Optimisation Services, such as the Adaptive Mobility Accelerator). Telstra is focused on ensuring customer 5G readiness (it offers a wide range of devices) and 5G network development to maintain network leadership. It is building its understanding of 5G capabilities with new services and laying the foundations for new business models. Adjacent capabilities (provided by Telstra Purple) are a further monetisation enabler.
Operators are working to minimise the impact of constraining factors (e.g. extending device ranges, securing additional spectrum) whilst building/leveraging the enablers to provide a 5G monetisation toolkit. Their commercial 5G journeys continue.