Taiwan's 5G rollout has now surpassed the three-and-a-half-year mark, and while user numbers continue to grow, the pace isn't mirroring the rapid expansion witnessed during the 4G era. Despite encouraging data from penetration rates and telecom giants' statistics, it's evident that the meteoric rise experienced with 4G hasn't been replicated. The National Communications Commission's (NCC) latest report, "Communication Market Development 2023," reveals that only 25.5% transitioned to 5G services in 2023, underscoring the absence of compelling applications propelling 5G.
Analyzing the motivations behind the shift from 4G to 5G in 2023, 54.3% cited "enticing contract or device upgrade incentives," followed by 23.1% expressing satisfaction with "5G tariffs meeting expectations." It is worth noting that these factors did not directly hinge on 5G's performance or experiential enhancements.
Observationally, telecom distribution channels' alluring device purchase incentives wield substantial influence, incentivizing consumers to embrace 5G. Operators attribute this trend to the ambiguous economic outlook in 2023, prompting budget reductions for standalone device purchases. Consequently, opting for 5G, particularly with elevated tariff plans, became a strategic choice to alleviate device acquisition pressures. The concurrent release of Apple's new devices in 2023 further fueled a remarkable surge in 5G adoption.
On the flip side, examining reasons for not transitioning from 4G to 5G in 2023, a substantial 70.8% emphasized that "current 4G services adequately meet their needs," while 31% indicated concerns over "5G tariffs exceeding 4G costs." This underscores a prevailing disinterest in 5G and a perception that 4G suffices for routine usage scenarios.
Telecommunication companies acknowledge this reality, affirming its alignment with daily usage needs. Major apps predominantly used, such as social media and streaming platforms, were developed during the 4G era, resulting in a subdued perception of performance improvements brought about by 5G.
However, with the impending launch of the Apple Vision Pro, there's potential for a resurgence in interest, particularly in extended reality (XR) and the metaverse. For virtual reality (VR), augmented reality (AR), or other devices, a prerequisite for their proliferation is low latency and high-speed networks. As these applications permeate general user usage, it might herald a reevaluation and renewed emphasis on 5G.
Addressing cost considerations, Taiwan's pre-5G spectrum fees set a staggering record of over NT$140 billion. For telecommunication companies, the challenge lies in the yet-to-be-recouped construction and spectrum fee costs, making substantial price reductions a formidable task. While promotional device purchase plans may continue driving 5G penetration in the short term, a long-term catalyst necessitates the emergence of a compelling application.
In essence, 5G's focus diverges from 4G's launch, spotlighting its potential in fixed and vertical domains for innovative application services, primarily catering to corporate customer demands. Coupled with 10 years of comprehensive 4G infrastructure, the transition for general users towards services with marginally distinct experiences demands patience, time, and increased investment, considering the associated costs.
Article translated by Vyra Wu
