China's 5G Success Lesson: Smart Pricing Strategy That Works for Users

In 2019, China's three major telecom carriers, China Mobile, China Telecom and China Unicom, officially launched 5G services to the public, marking a major turning point in the country's telecommunications industry.

In order to promote the rapid adoption of new technology, network operators have introduced many 5G packages with competitive prices, suitable for diverse user needs.

In addition, they also launched attractive promotions, discounts and incentives to encourage customers to upgrade to 5G, thereby accelerating the popularization of the new generation network nationwide.

Accelerating the deployment of 5G services

China Mobile quickly asserted its leading position in the 5G race as soon as it launched its service, attracting 3.8 million users, accounting for 69% of the 5G market share in China.

With its ambitious expansion, the company has set a challenging target of reaching 100 million 5G users by the end of 2020. This is a bold move, especially when compared to previous growth, just 21.5 million new subscribers in the first 11 months of 2019 and 37.9 million in all of 2018.

To realize this goal, China Mobile has rolled out a comprehensive nationwide strategy, focusing on affordable prices, rapid infrastructure expansion, and increased access to 5G devices.

One of the key milestones is the plan to transition to a 5G standalone network (5G SA) in Q4 2020, which will optimize performance and ensure the network operates completely independently, without depending on legacy 4G infrastructure.

In terms of pricing, China Mobile introduced 5G plans ranging from 128 yuan ($18) to 598 yuan ($86) per month, adopting a tiered pricing model based on data and voice usage.

This strategy makes 5G accessible to both mainstream and high-end customers. By maintaining competitive pricing compared to Western markets, China Mobile has rapidly promoted the popularization of 5G.

According to a report from the China Academy of Information and Communications Technology (CAICT), a research arm of the Ministry of Industry and Information Technology (MIIT), in just the last two months of 2019, the Chinese market consumed 13.77 million 5G phones with 35 different models.

Although the majority of devices sold during the year were still 4G phones (389 million units), rapidly falling prices and the diversification of 5G products have created a great incentive for users to upgrade to the new technology.

To support this aggressive rollout, China Mobile invested 24 billion yuan ($3.5 billion) in 5G infrastructure in 2019. By the end of the year, the company had built 50,000 5G base stations in 50 cities, laying a solid foundation for its nationwide 5G coverage plan in the coming years.

Pricing structure and competitive strategy

China Mobile focuses on competitive pricing strategy to attract a large number of users, while China Telecom chooses a different approach which is to balance between reasonable cost and premium service.

The carrier is focusing on high-speed 5G applications, such as the Shanghai Maglev commercial train network, a breakthrough in telecommunications technology.

China Telecom adopts a tiered pricing model, offering a variety of options for customers. Basic plans are affordable for widespread access, while premium plans offer larger data capacity and special features, suitable for those who require stable connections, such as business people and gamers.

Compared with China Mobile, which offers a basic 5G package at 128 yuan ($18) for 30 GB, China Telecom emphasizes flexibility and value-added services.

Instead of competing for subscribers with low prices, the company takes advantage of advanced 5G infrastructure, especially the coverage system on high-speed railway lines, to affirm the value of its services.

A key differentiator for China Telecom is its focus on specialized 5G applications, particularly in the high-speed transport sector. Working with telecom equipment supplier ZTE, the operator successfully deployed the world’s first commercial 5G network for a maglev train in Shanghai, providing stable connections even when the train reached speeds of 500 km/h.

This innovation not only demonstrates the ability to provide high-end 5G services, but also expands its applications into industries, directly contributing to China's economic development.

Premium pricing strategy for early adopters

China Unicom officially launched its 5G service in 2019, with a starting price of 190 yuan ($26) per month. As one of China's three major carriers, China Unicom adopts a strategic pricing model that balances affordability and profitability, helping users transition smoothly from 4G to 5G.

Unlike China Mobile, which is expected to offer low-cost 5G plans, China Unicom is opting for higher prices in the initial stages of its rollout. This approach helps the company offset 5G infrastructure costs, control subscriber growth to avoid network congestion, and ensure the best service quality for early adopters.

Comparing 5G prices with some countries around the world, China Unicom emphasized that their 5G packages are still competitively priced compared to the international market.

For example, in South Korea, the lowest price is $44/month, in the US, AT&T charges $70/month for 15GB of data.

Thus, China Unicom's 5G plan is nearly 40% cheaper than South Korea and 60% cheaper than the United States.

Despite its competitive price in the international market, the $26 price tag has been controversial in China, with many consumers saying it is too high.

However, telecom experts say that applying high prices in the initial stage is a standard strategy, often used to optimize profits and ensure service quality.

To address pricing concerns, China Unicom has pledged to reduce package prices over time in line with market demand and network expansion. The company aims to bring 5G closer to mass consumers while maintaining a stable and high-quality network experience for early adopters.

China Unicom’s pricing strategy reflects a sustainable approach that ensures early-stage profitability while supporting digital transformation within businesses and contributing to China’s GDP. As 5G becomes the standard, the company will roll out more flexible and affordable plans, helping to expand its market share and promote the technology’s nationwide adoption.

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According to the Ministry of Industry and Information Technology of China, as of the end of November 2024, the number of 5G subscribers in China had exceeded 1 billion, accounting for 56% of the total number of mobile subscribers, marking an important step forward in the popularization of this technology.

Compared with the same period last year, the penetration rate increased by 9.4 percentage points (PP), reflecting the rapid development of 5G in the country's digital ecosystem.

Forecasts from GSMA's Mobile Economy China 2024 Report show that China could reach 90% 5G adoption by 2030, affirming its position as the world leader in mobile connectivity.

The number of 5G subscribers is expected to reach 1.6 billion, contributing 260 billion USD to the national GDP, becoming an important driving force to promote the digital economy.

In the three years since the rollout of 5G, the average monthly data usage per mobile subscriber in China has almost doubled, from 7.8GB to 14.9GB, which has helped expand digital applications such as remote working, online education, digital services & scientific research, and epidemic prevention.

Not only affecting personal life, 5G also revolutionizes consumer services, especially e-commerce.

With more than 1.1 billion Internet users by 2024 (equivalent to 78.6% of the population), China continues to assert its position as the world's largest e-commerce market.

The strong development of 5G networks has contributed to promoting online retail, digital services and supporting comprehensive economic growth.

Since the commercialization of 5G, China has generated nearly 787.53 billion USD in direct economic output in the past five years. At the same time, the technology has also indirectly contributed to creating more than 1,962 billion USD, demonstrating the irreplaceable role of 5G in the sustainable development of the economy.

China's Vice Minister of Industry and Information Technology Zhang Yunming emphasized that China is entering a key stage of 5G commercialization, with the technology being applied in 40 out of 97 key economic sectors. In particular, mining and ports are two industries that are strongly expanding large-scale 5G solutions, further affirming the influence of this technology in national digital transformation.

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China is leading the world in the deployment of 5G infrastructure, with a massive network of base stations spread across the country. As of November 2024, the country had installed about 4.2 million 5G base stations, accounting for more than 60% of the global total, according to telecoms industry estimates.

Vice Minister Zhang Yunming affirmed that China has completed the target set in the 14th Five-Year Plan (2021-2025) ahead of schedule, reaching 29 5G base stations per 10,000 residents. These networks not only cover public service centers, cultural sites, and tourist attractions, but also on key traffic corridors, ensuring stable and continuous connections.

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The Chinese government is expanding access to 5G, with a particular focus on rural and remote areas, to narrow the digital divide and promote digital transformation nationwide.

To achieve this goal, China's Ministry of Industry and Information Technology, in collaboration with 11 other government agencies, launched the second version of the action plan, with the aim of taking 5G applications to new heights by 2027.

The plan sets ambitious goals:

- Increase 5G base station density to 38 per 10,000 people;

- Personal 5G subscriber penetration rate exceeds 85%;

- More than 75% of mobile data traffic is transmitted over 5G networks.

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As one of China's leading economic hubs, Shanghai is at the forefront of 5G adoption and 5G-Advanced technology development. The city has announced a three-year strategy, running through 2026, to integrate 5G with artificial intelligence (AI) and high-tech industries.

The main objectives include:

- Achieve 5G user penetration rate of over 90%;

- Continuous 5G and 5G-Advanced coverage on low-altitude flights;

- Developing high-standard manufacturing plants, supporting 5G technology;

- Promote 5G applications in humanoid robots and smart energy systems.

With these strong advances, 5G is not only a telecommunications technology, but also becomes the foundation for digital economic development, promoting innovation and increasing China's competitive advantage in the global market.

Lessons for Vietnam: Need for a flexible, practical and user-oriented 5G strategy

China’s 5G deployment model shows that technology will not succeed if it stops at technical factors. The clearest lesson is the need for a pricing strategy that is suitable for users’ ability to pay, combined with focused investment in infrastructure and practical applications.

Vietnamese mobile network operators can learn from China's gradual rollout of 5G by bringing service prices closer to 4G, prioritizing coverage in urban and industrial areas, and supporting the development of a domestic digital ecosystem.

Close coordination between the state, telecommunications enterprises and industries is also a key factor helping 5G to soon become effective in Vietnam.