Ericsson's global leadership has commended China Telecom's innovative approach to a token-based business model.
The remarks were made during the World Economic Forum's 17th Annual Meeting of the New Champions, also known as the 2026 Summer Davos Forum, which commenced in Dalian. Lanny, Ericsson's Senior Vice President and President of North East Asia, highlighted the current market inflection point driven by AI. "AI is a key focus area for us," he stated. "We are utilizing AI to develop our own products and enabling these products to empower AI applications across other industries." He emphasized AI's potential to generate positive momentum for human development, unlock significant commercial opportunities, and deliver consumer-facing capabilities to address challenges in areas like aging populations and agriculture, positioning Ericsson at the heart of this transformation.
Discussing Ericsson's collaborative efforts with telecom operators on AI, Lanny detailed ongoing work. "We have extensive cooperation with operators on AI topics today. Part of this involves integrating AI into our own solutions to enhance their efficiency in handling various tasks," he explained. He cited the example of launching the first batch of wireless products with built-in inference capabilities at Mobile World Congress in March, along with a demonstration of offloading robot computational loads to the network, as an area of joint experimentation and testing with operators.
The conversation turned to the implications of AI agents consuming vast amounts of tokens and how this differs from traditional data traffic sales. Lanny addressed this directly, noting a prevalent industry issue. "In many countries, the adoption of 'unlimited' data plans has effectively flattened the growth curve, which I believe is quite detrimental to the industry. While consumption is still growing, revenue is being flattened as if it were a fixed fee," he observed. "Now, with tokens, we have something with inherent growth potential. Of course, how operators build a business model around this is still in the experimental phase. But I am encouraged by China Telecom's approach, and I understand China Mobile is also moving in this direction. Globally, other operators like T-Mobile in the US are also exploring this."
China Telecom officially launched a trial commercial Token package nationwide on May 17, 2026. The service is targeted at individual/household users and developers/SMEs, offering tiered monthly subscription plans. This initiative marks a strategic shift for operators from traditional "data traffic management" to "Token management," aiming to redefine billing models and valuation frameworks in the AI era.
Lanny elaborated on his optimism. "The reason I'm encouraged is that it has a growth trajectory. I'm not sure if it will eventually be capped like data traffic was at some point, but even data traffic took a considerable time before being capped. So, for now at least, it provides operators with growth potential and a trajectory to leverage," he said. He connected this to a broader vision beyond a simple "tokens vs. traffic" comparison, referencing Ericsson's concept of "differentiated connectivity." He explained that while current connectivity is "best-effort," future networks must provide certain guarantees to meet the specific latency, throughput, and security requirements of use cases like smart cities, low-altitude economy, and autonomous driving. This "differentiated connectivity" is expected to form its own growing economy, creating new revenue models for enterprises, governments, and consumers.
On the topic of selling tokens and pricing, Lanny was candid. "Where there is competition, there will be price fluctuations. The token economy is still very new, which means there will be a lot of experimentation around it, and I think that's healthy. We need to try different models first before converging on one," he commented. He added a universal business principle: "In any industry, AI or not, if you can have a strategic advantage for even a period, you can monetize more before others catch up and imitate. Price wars typically start after others have caught up and replicated you."
Lanny concluded by emphasizing the importance of differentiation. "I believe it ultimately depends on the ability of operators and other industry players to differentiate themselves. Each operator has its own assets; some are stronger in cloud, others in the enterprise market. When we talk about differentiated connectivity and the ability to deliver differentiated products, it supports a certain business model behind it. Ultimately, the key is the value delivered to consumers or enterprises. If you deliver genuine value that only you can provide, then you can succeed. I believe operators today are in a very unique and favorable position to drive this transformation."
Comments