Core Viewpoint - The communication industry is at a critical juncture requiring transformation, particularly in the Chinese market, which is characterized by a large user base and strong demand for 5G capabilities, yet faces challenges such as weak monetization and low user value [2][3]. Industry Overview - China has approximately 1.4 billion users, with the three major telecom operators generating around 1.96 trillion yuan in revenue, while the U.S. with 345 million users generates over 3.1 trillion yuan, and Japan with 125 million users generates over 1.3 trillion yuan [2]. - Despite leading in infrastructure coverage and performance, Chinese operators are experiencing a common industry issue of "incremental growth without revenue increase," which is exacerbated by the rise of mobile internet, cloud computing, and AI technologies [2][3]. AI Integration in Communication - AI applications in the communication sector can be categorized into two parts: AI for Network, which enhances network planning and management, and Network for AI, which ensures that telecom networks support future AI services effectively [3]. - The telecom industry has historically focused on providing consistent network connectivity, but declining revenues necessitate a shift towards platform-based network services that offer differentiated connections tailored to various applications and user needs [3][4]. Business Model Transformation - Ericsson aims to create higher value through differentiated network connections and assist the telecom industry in developing new business models, leveraging high-performance programmable networks and AI technologies [4][5]. - The challenge for enterprise users lies in upgrading networks to support more use cases and complex demands, with the benefits of differentiated network connections being clearer in terms of enhanced productivity [4][5]. Consumer Market Dynamics - In the consumer sector, Ericsson seeks to enhance user experience through superior and differentiated network connections, although the willingness to pay among users remains limited [4][5]. - The consumer market's size and subscription volume imply that even a small shift towards differentiated network services could lead to significant market changes [4]. Current Market Challenges - The scale of 5G commercial applications in China is still underdeveloped, and telecom operators are encouraged to pursue new use cases without waiting for complete technological maturity, emphasizing the need for synergy between business models and technology [6]. - Examples from the U.S. and Singapore illustrate how operators have built competitive advantages through differentiated network connections, highlighting the potential for similar strategies in the Chinese market [6].

Core Insights - The article highlights the rapid growth and transformation of 5G technology over the past six years, emphasizing its role in driving economic development and digital transformation across various industries [1] - Despite the increase in 5G users and infrastructure, telecom operators are facing a challenge of "incremental growth without revenue increase," necessitating a shift towards differentiated connectivity strategies [2][3] Industry Overview - As of April 2025, China has established 4.439 million 5G base stations, with 1.081 billion 5G mobile users, accounting for nearly 60% of total mobile phone users [1] - Major telecom operators in China reported significant user growth, with China Mobile reaching 1.003 billion total mobile users and 578 million 5G users, while China Telecom and China Unicom reported 429 million and 349 million total mobile users, respectively [2] Revenue Challenges - The average revenue per user (ARPU) for 5G packages is only about 10% higher than that of 4G, with many users opting for low-cost packages that do not significantly boost revenue [2] - The global telecom industry is experiencing a "pipeline" dilemma, where increased data traffic does not translate into proportional revenue growth [2] Differentiated Connectivity Strategy - Leading telecom operators are exploring differentiated connectivity strategies to enhance revenue and value for both industries and end-users [2][3] - Differentiated connectivity aims to provide tailored services based on user needs, such as basic packages for casual browsing and specialized subscriptions for high-demand applications like video calls and gaming [2] Programmable Networks - High-performance programmable networks are essential for supporting differentiated connectivity services, allowing for dynamic resource allocation and improved service delivery [3][4] - The key elements of programmable networks include high performance and programmability, which enable operators to respond quickly to market changes and reduce operational costs [4][5] Future Development - The transition to high-performance programmable networks is seen as a gradual process, starting with 5G standalone and advanced networks, focusing on enhancing operational efficiency and service differentiation [4][5] - Programmable networks aim to simplify the translation of user needs into executable plans, facilitating rapid service deployment and integrating AI and automation into network management [5]

Core Viewpoint - The global telecommunications industry is facing a "growth without revenue" bottleneck, where the increase in network traffic does not translate into corresponding revenue growth, leading to a "growth reduction" phenomenon [1][3]. Group 1: Industry Challenges - The traditional network service model is homogenized, failing to meet diverse market demands, resulting in a lack of differentiation between high-value and ordinary services [1]. - Operators are experiencing a "pipeline" dilemma, where the expansion of 5G networks does not yield proportional income increases [1]. Group 2: Differentiated Connectivity - "Differentiated connectivity" has become a consensus in the industry, focusing on using technology to identify the value of different services and providing customized network guarantees for high-priority applications [3]. - Singapore Telecommunications (Singtel) exemplifies this approach by offering tiered service packages based on user needs, transforming operators from mere traffic providers to "service value definers" [3]. Group 3: Programmable Networks and AI Integration - Ericsson views programmable networks as a core development goal for 5G-A, enabling dynamic network configuration based on business needs through software-defined networking (SDN) and network function virtualization (NFV) [5]. - The integration of AI is reshaping network management, transitioning from passive to proactive management, with AI acting as a "network brain" for autonomous decision-making [5][7]. Group 4: Ecosystem Development - Ericsson is building an open ecosystem to attract third-party developers, creating a "network as a service" economic model, with a RAN ecosystem comprising 56 members [8]. - The acquisition of Vonage and the establishment of Aduna aim to create a CPaaS ecosystem, addressing fragmentation in network capability and enhancing collaboration with developers [8]. Group 5: Future Outlook - Despite the commercial launch of 5G-A, challenges remain, including deployment strategy delays in some regions and low penetration rates of new terminals [9]. - Ericsson proposes a dual-track development strategy to enhance 5G-A capabilities while promoting end-to-end differentiated services, aiming to redefine the telecommunications industry's revenue model and digital infrastructure [9].