Mobile Users Demand Better 5G Connectivity, Willing to Pay Premium
Issues with app quality have resulted in mobile users’ unwillingness to settle for “best effort” 5G network connectivity, with some generative artificial intelligence (Gen AI) users willing to pay a premium for guaranteed performance.
Study Reveals 35% of 5G Users Willing to Pay More for Differentiated Connectivity
About 35% of 5G users will consider paying more for differentiated connectivity that guarantees better performance for essential tasks, revealed a study released by Ericsson. This number is 1.5 times more in densely populated markets such as Thailand, India, and Brazil, compared to the global average, according to the online survey, which polled more than 23,000 smartphone users, of whom 17,000 were 5G smartphone users from 16 markets, including Australia, France, Singapore, South Korea, Thailand, China, the UK, and the US.
Mobile-First Markets Drive Demand for Differentiated Connectivity
“These are mobile-first markets, where reliance on mobile connectivity is particularly strong,” Ericsson said. “In these markets, elevated demand for differentiated connectivity could be attributed to the need for improved capacity, rather than general network inadequacy.”
Service Providers Must Offer Segmentation Strategies
The telecom equipment manufacturer estimates that the market potential for differentiated connectivity is about 35% of 5G users across the 16 global markets. However, tapping this market will require service providers to offer segmentation strategies that identify key consumer groups, such as those who are more willing to pay for differentiated connectivity and require tailored service offerings.
5G Users Willing to Pay Premium for Guaranteed Performance
The study suggests that 5G users are willing to dig into their pockets to get differentiated connectivity for core services, such as video calls for work or personal reasons and streaming various media formats. They will pay the highest premium for niche services like multiplayer mobile and cloud games and dedicated augmented reality (AR) apps.
Gen AI Users Expect Guaranteed Performance
In fact, a quarter of Gen AI users already expect guaranteed performance, such as real-time response, and will pay up to 35% more compared to other app categories. “Gen AI capabilities are increasingly integrated into popular apps such as TikTok and Snapchat, while new AI-driven apps for image and video upscaling or generation are set to add substantial mobile traffic in the near future,” Ericsson said.
Conclusion
The study highlights the growing demand for differentiated 5G connectivity, particularly in mobile-first markets. Service providers must adapt to this trend by offering segmentation strategies and guaranteeing performance for essential tasks. As Gen AI usage grows, the demand for fast, reliable uplink and low latency will increase, requiring service providers to prepare for these shifts in network traffic.
FAQs
Q: What percentage of 5G users are willing to pay more for differentiated connectivity?
A: About 35% of 5G users will consider paying more for differentiated connectivity that guarantees better performance for essential tasks.
Q: Which markets have the highest demand for differentiated connectivity?
A: Densely populated markets such as Thailand, India, and Brazil have the highest demand for differentiated connectivity, with 1.5 times more users willing to pay more compared to the global average.
Q: What is the market potential for differentiated connectivity?
A: The market potential for differentiated connectivity is about 35% of 5G users across the 16 global markets.
Q: What is the expected growth of Gen AI usage?
A: Ericsson expects a substantial increase in Gen AI usage over the next five years, with an expected 65% of weekly smartphone users engaging with these applications.
