New research from Ericsson ConsumerLab reveals that 20% of 5G smartphone users, who are in pursuit of distinctive 5G service experiences, including superior quality of service for resource-intensive applications, are open to paying communication service providers (CSPs) an additional premium of up to 11% to access these enhanced connectivity offerings.
The report, titled “5G Value: Turning Performance into Value”, highlights the CSP business case potential for 5G as growing numbers of subscribers around the world express increased satisfaction with 5G. The methodology used for this research report involved interviews with over 37,000 consumers across 28 countries conducted in May and June of this year. This extensive research scope captures the perspectives of approximately 1.5 billion consumers, including a substantial 650 million 5G users.
Additionally, the report also identifies that unsatisfactory 5G connectivity experiences at key locations, such as stadiums, entertainment arenas, and airports can make customers up to three times more likely to switch CSPs.
The comprehensive research – which reflects the views of an estimated 1.5 billion consumers globally, including about 650 million 5G customers – is part of an Ericsson research series, which has tracked the evolution of the 5G consumer market since 2019.
The Ericsson ConsumerLab research further demonstrates a shift in the factors that influence consumer satisfaction, primarily recognising a transition from a primary focus on 5G geographical coverage to metrics centered around application experience. These metrics cover aspects like the quality of video streaming, experience of mobile gaming and video calling, and consistency of 5G speeds, particularly among early 5G adopters.
About 37% of 5G consumers polled believe that increased data allowances in their 5G plans would justify premium rate charges from CSPs.
“Interestingly, about one-in-five 5G smartphone users polled expressed a clear preference for differentiated quality of service connectivity,” says Jasmeet Singh Sethi, head of Ericsson ConsumerLab. “Rather than settling for generic, best-effort 5G performance, these users are actively seeking elevated and consistent network performance, especially tailored for demanding applications and specific key locations. The research shows they are willing to pay an 11% premium if their service provider offers it.”
“This is where a lot of 5G consumers clearly expect 5G to be able to give them a value-add experience – for example, to enhance a night out at a major entertainment venue, or when traveling through an airport,” according to Sethi. “If their experience in such locations is poor, they are three times more likely to switch to a provider who can provide that optimum 5G experience.”
The report confirms the potential of network application programming interfaces (APIs) for developers, as a means for CSPs to offer enhanced network experiences that customers are willing to pay for.
“In the era of 5G, network Application Programming Interfaces are business interfaces for developers and application providers giving them access to network capabilities via familiar easy to use interfaces,” says Erik Ekudden, CTO of Ericsson. “As we observe consumers expressing a willingness to pay for new functionality and differentiated quality of service, it’s clear that these APIs are industry-changing. They foster an environment where developers get access to 5G capabilities to deliver distinct premium experiences. For communication service providers APIs unlock new revenues by unveiling the inherent value of their networks.”
The report addresses how 5G user engagement, and consequently, mobile data consumption, is driven by the bundling of 5G rich enhanced video – such as 4K, 360-degree experiences, multi-view videos, and augmented reality (AR) applications – on 5G plans.
On average, 5G users report a 47% increase in time spent on enhanced video formats over the past two years. The number of daily AR application users has doubled since the end of 2020.
The report identifies four trends:
5G network satisfaction drivers are evolving beyond coverage. New 5G users still value 5G outdoor coverage and speed. In markets where 5G population coverage exceeds 80%, long-time users prioritise video quality and upload speeds for the apps they use, reflecting evolving expectations.
5G is reshaping video streaming and AR usage. Emerging formats are increasingly driving usage and 5G data consumption as service providers bundle rich media content into 5G plans.
5G performance at key locations influences consumer loyalty. About 17% of consumers across 28 markets have switched service providers since the launch of 5G, driven primarily by issues with 5G network performance. A significant influence is the 5G experience in critical locations, such as arenas and airports.
5G consumers will pay premiums for differentiated connectivity. Twenty% of smartphone users expect differentiated 5G connectivity. These individuals value premium connectivity and are willing to pay a premium of up to 11% for a 5G plan that ensures elevated network performance.
Read the full report: 5G Value: Turning performance into loyalty
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