Core Insights - Ericsson has participated in the China International Import Expo for the eighth consecutive year, showcasing over 80 differentiated connectivity cases and the latest achievements in AI and network integration [1] - The company emphasizes a shift from "selling connectivity" to "selling services" to address the revenue challenges faced by operators in the 5G era [3][4] - Ericsson anticipates achieving 6G commercial deployment around 2030, with a core network evolution based on 5G SA [3][12] Differentiated Connectivity - The essence of differentiated connectivity is to provide customized services based on specific application and user needs, moving away from the homogeneous service model of 4G [3][4] - This model allows users to pay for enhanced experience, predictability, and control, similar to subscription services in other industries [4] AI and Network Integration - AI is positioned as a critical technology for enabling differentiated connectivity, with Ericsson advocating for a dual empowerment approach: "Networks for AI" and "AI for Networks" [5] - AI can predict over 95% of network failures, improve spectrum and capacity efficiency by approximately 15%, and reduce energy consumption by 14% [7] 5G Private Networks - Ericsson is focusing on 5G private networks for the B2B market, with successful implementations in high-end manufacturing scenarios, such as Airbus production facilities [8] - The unique value of 5G private networks is highlighted through specific applications, such as remote control of torque parameters in manufacturing [8] Emerging Devices and Market Trends - New devices like embodied intelligence and AI glasses have specific network requirements, such as higher uplink bandwidth and low latency for real-time interactions [9] - The future is expected to see a cluster of AI-based applications and devices driving network demand, creating a positive feedback loop between devices and networks [11] Market Opportunities and Challenges - China is recognized as a leading market in 5G SA construction and B2B application exploration, but faces challenges in nationwide deployment due to its vast territory and large user base [12] - The promotion of eSIM technology in China is seen as gradual, requiring consideration of consumer acceptance and market dynamics [12] Conclusion - Ericsson views China not only as a significant market but also as a source of innovation, aiming to leverage differentiated connectivity and AI integration to transition the mobile communication industry from "scale leadership" to "value leadership" [12]

Core Insights - Ericsson showcased its latest advancements in AI-enabled networks, differentiated connectivity, and energy-efficient network products at the 8th China International Import Expo, addressing the telecom industry's revenue growth challenges and proposing differentiated connectivity as a solution [1] Group 1: 5G Commercial Challenges - The current 5G technology has strong capabilities, but operators are still using traditional revenue models from the 4G era, primarily focused on selling data, leading to homogenized services [2] - Global operators are facing stagnant ARPU (Average Revenue Per User) growth, with major Chinese operators' ARPU values also remaining flat despite high network infrastructure maturity [2] - Ericsson's solution to this challenge is differentiated connectivity, which involves packaging 5G capabilities to provide customized services for various application scenarios, shifting from "selling connectivity" to "selling services" [2] Group 2: AI and Network Integration - Despite the monetization challenges, Ericsson sees significant opportunities from AI, emphasizing that AI is essential for the industry [3] - The concept of "Networks for AI" and "AI for Networks" aims to enhance network adaptability for AI applications while leveraging AI to tackle increasing network complexities [3] - AI can predict over 95% of network faults, improve spectrum and capacity efficiency by approximately 15%, and reduce energy consumption by 14% [3] Group 3: Future Outlook on 6G - Ericsson executives indicated that the timeline for 6G is around 2030, with differentiated connectivity being a necessity not only for 5G but also for future 6G [4] - The evolution of 6G will be based on an independent 5G SA core network, and operators are encouraged to transition from NSA to SA to maximize network value and prepare for 6G [4]

Core Viewpoint - Ericsson has participated in the China International Import Expo for eight consecutive years, emphasizing its commitment to the Chinese market and its role in the development of 5G technology in China [1] Group 1: Company Commitment - Ericsson's China President, Fang Ying, highlighted the company's long-standing presence in China, marking the 75th anniversary of diplomatic relations between China and Sweden [1] - The company aims to deepen its business cooperation in China, leveraging the country's high-level openness to foster a new future in the digital economy [1] Group 2: Technological Innovation - Since the initiation of 5G construction in China, Ericsson has focused on technological innovation, providing unique value to its operator partners through global insights and practices [1] - The company showcased a series of differentiated connection service use cases and demonstrations at the expo, highlighting over 80 different business models, including B2C, B2B2C, and B2B [1] Group 3: Future Developments - Ericsson presented its achievements in integrating AI with network technology, which is foundational for the future of mobile communication [1] - The exhibition included high-performance hardware enabled by Ericsson's silicon technology, distributed AI unit base station intelligent boards, and 5G private network use cases focused on high-end manufacturing [1]

Investment Rating - The report maintains a "Recommended" investment rating for the communication industry [1] Core Insights - The 2025 World Mobile Communication Conference (MWC) focused on key themes such as 5G integration, AI, and satellite communication, highlighting significant advancements in the industry [15][49] - The communication sector has shown resilience, outperforming major indices like the CSI 300 and the ChiNext Index in both weekly and year-to-date performance [8][9] - Key companies to watch include China Mobile, China Telecom, and China Unicom, with specific recommendations for various segments such as AI applications, satellite communication, and optical components [49][51] Summary by Sections Industry Overview - The communication industry consists of 124 listed companies with a total market capitalization of approximately 484.33 billion [3] - The sector's performance has been robust, with a 1.58% increase in the past week, outperforming the CSI 300 by 2.04 percentage points [8][9] MWC Highlights - Major announcements included the release of the "Agentic AI for Telco" white paper by China Mobile and several partners, outlining a framework for AI collaboration in telecommunications [15][16] - China Mobile introduced a series of AIoT products, emphasizing the integration of AI with IoT and satellite communications [21][22] - China Telecom showcased its cloud-network integration strategy, focusing on AI-driven applications across various sectors [25][27] Investment Recommendations - Recommended companies include: - Telecom Operators: China Mobile, China Telecom, China Unicom [51] - Optical Components: New Yisheng, Tianfu Communication, Zhongji Xuchuang [51] - Satellite Communication: Haige Communication, Shanghai Hanhua, Qiyi Er [51] - Equipment Manufacturers: Gongjin Co., Unisoc, ZTE, Ruijie Networks [51] - IoT Modules: Guanghetong, with a focus on AI applications [51]

Group 1 - The communication industry is undergoing a critical transformation, with 5G requiring differentiation and platformization for commercial growth, while AI is driving networks towards programmability and intelligence [1] - Ericsson's executives discussed 5G differentiated services, programmable networks, AI integration, and 6G planning during the "Imagine Live" event in Beijing [1] Group 2 - 5G differentiated services provide revenue growth opportunities for operators, shifting from uniform "best-effort" services to tailored connectivity for various applications and user needs [2] - The enterprise market requires more predictable and reliable connections to support critical business applications, while the consumer market faces challenges due to limited willingness to pay [2] - Ericsson's solutions include performance-based differentiated services like network slicing, AI-driven wireless access solutions, and standardization of APIs to lower development barriers [2] Group 3 - To address low consumer willingness to pay, Ericsson suggests tiered package designs, offering basic, video call, and low-latency gaming packages, as well as bundling high-value scenarios like AR glasses [3] Group 4 - The integration of AI and networks enhances operational efficiency and intent recognition, with over 85% of Ericsson's wireless network functions capable of intent-driven service demand recognition [4] - AI supports low-latency connections for edge and endpoint computing scenarios, facilitating data interaction for devices like mobile AI assistants and AR glasses [4] - Collaborations with companies like Toyota, NVIDIA, and Google aim to advance AI and 5G network integration for applications such as cloud rendering and autonomous driving [4] Group 5 - The development of 6G is focused on incorporating differentiated connectivity capabilities, with AI deeply integrated for self-optimizing intent recognition and dynamic resource allocation [4]