How operators plan 5G positioning and pricing strategies

A recent report on 5G positioning and pricing strategies, conducted by Strategy Analytics, and released by MATRIXX Software, has revealed what CTOs and sales / marketing heads need to plan to monetize from their 5G business.
KT 5G network Korea
A recent TrendForce report said 5G smartphone production is forecast to touch 250 million units with 15 percent penetration rate in the overall smartphone market in 2020.

GSA says 63 mobile operators in 35 countries have launched one or more 3GPP-compliant commercial 5G services till March 2020.

The Strategy Analytics report released today and prepared by Susan Welsh de Grimaldo and Kevin Nolan offers enough insights to mobile network engineers and business heads in order to develop monetization strategies.

The latest Counterpoint report in March said 5G business will grow faster than 4G in terms of device availability and costs as well as operator-side deployments.

GSMA forecast

46 mobile operators in 24 markets have launched commercially available 5G networks by 30 January 2020, according to GSMA.

4G was the world’s dominant mobile technology, supporting more than half (52 percent) of global connections. 4G will continue to grow over the coming years, increasing to account for 56 percent of connections by 2025.

Mobile operators are expected to spend $1.1 trillion worldwide between 2020 and 2025 in mobile Capex and roughly 80 percent of Capex will be on 5G networks.

Between 2019 and 2025, the number of global IoT connections will more than double to almost 25 billion, while global IoT revenue will more than triple to $1.1 trillion.

5G is forecast to contribute $2.2 trillion to the global economy by 2034, with key industries such as manufacturing, utilities, and professional and financial services benefitting the most from the new technology, GSMA said

5G connections forecast by GSMA
5G positioning

While leading SPs have websites that explain how 5G will improve lives, enterprises and societies, the reality is that early stage 5G services mainly focus on more data faster. All 3 South Korean operators have focused on strong 5G content propositions and partnerships with content providers and application developers: the operators have all broadly built their propositions around AR/VR, UHD video, gaming and communications.

Apart from the Korean operators, there has been a lack of services and activities that offer new, innovative immersive experiences that specifically are enhanced by 5G. For instance, Verizon, AT&T, T-Mobile and Sprint, leading telecoms in the United States, focused on data plans.

SPs are skeptical that connectivity will push consumer revenue growth, but see opportunities in value added services enhanced by 5G in particular for enterprise customers — cautioning that impact will take time to evolve and requires co-development of solutions with customers.

“We see willingness to pay by industry to enhance effort beyond best effort if their whole production relies on it, says Antje Williams, SVP 5G Campus Networks, Deutsche Telekom.

5G is not just about connectivity like 3G to 4G but another way to see the telco business, especially for enterprise; when the 5G ecosystem is emerged there will be disruption from the focus on connectivity, says Alexis Hostos, Telefonica B2B Head of Product Strategy.
5G SIM connections forecast

5G pricing

Most early 5G launches are offering 4G and 5G on the same plans, with 5G only available in premium tiers or free in premium tiers but only available for a fee in lower tiers. There is a growing consensus that putting 5G in premium tiers is a good approach, but that a straight up extra fee for 5G is not a viable option – at least not for long.

“No one-size-fits-all when it comes to 5G pricing strategies, each market is inherently different and there is no straightforward answer. We need to be pragmatic in approach but have flexibility to take bolder steps down the line,” James Stoker – VP Consumer Marketing – Europe, Orange, said.

Some SPs see Speed Tiers as strong option to monetize on QoS, others are skeptical; Most SPs have not yet moved to incorporate latency-based fees or tiers in their 5G pricing strategies, although they are studying the possibility.

SPs see enterprise services as a significant area for disruption and enhancement, with 5G playing a key role in new business models.

“To charge a premium for 5G requires a customer to judge how much time they are going spend in a 5G area” – this influenced decision not to charge a premium for 5G,” Max Taylor, Consumer Marketing, Vodafone UK, said.

SPs see a greater role for real-time, self-care apps in the 5G era — they see digital engagement as essential in 5G. SPs see network slicing as a key feature for future enterprise services, both for service delivery and for monetization. Operators recognize the importance of partnerships in developing 5G services, both for consumer and enterprise.

Especially for enterprise, 5G will be a disruption from just connectivity – our vision is to be a B2B2X platform to serve all our customer uses cases with innovative digital services on top of the platform. Enterprises will value latency and security – we need to address this benefit for enterprises,” says Alexis Hostos, Telefonica B2B Head of Product Strategy.


5G services require a new 5G device – and initially higher prices for 5G devices than 4G devices can be a barrier to adoption. What percent of users upgrading will purchase a 5G device?

How should CSPs promote 5G benefits to drive 5G adoption, especially when customers may frequently be using 4G networks outside of 5G coverage?

How should operators be looking to rationalize and simplify their pricing plans, and remove the myriad of complexity from previous generations? Is 5G an enabler or inhibitor to that desire?

How do SPs reconcile the need to simplify plans with goal to target segments by moving away from one-size-fits-all tiers – will the focus be on simple tiers of base offers and most uplift will be with ad hoc, personalized add-ons promoted both at initial sign up as well as on device based on user behavior?


Customer satisfaction with 4G mobile broadband is good and customers must be convinced of value of upgrading to 5G. Moving beyond early adopters to the early and late majority with sustainable monetization offerings is critical to the success of 5G.

Early stage 5G services mainly focus on more data faster; there has been a lack of services and activities that offer new, innovative immersive experiences specifically enhanced by 5G. SPs see a greater role for real-time, self-care apps in the 5G era to address digitally savvy users, enterprise desire for more control & visibility, and save costs.

SPs need to position 5G services to solve customer pain points and wow customers with new experiences / uses to attract them to 5G.

Strategy Analytics said SPs need to be more imaginative at launch AND give themselves the flexibility to adapt quickly to rapidly changing market conditions to address a wide range of customers, partners & competition.

SPs need to expand digital engagement in order to drive additional discovery, needs based upsells among 5G users.