According to a study, over a quarter of 5G smartphone users are prepared to pay up to 35% more for guaranteed fast and secure connectivity for high-capacity apps, and more than a third are interested in paying for differentiated connectivity.
The ability to provide dedicated spectrum and connectivity services to specific users is one of the main benefits of standalone 5G networks (5G SA). In addition, research from Ericsson ConsumerLab has shown that 5G smartphone users worldwide are willing to pay more for premium, differentiated connectivity services, usually powered by artificial intelligence (AI).
More than 17,000 of the 23,000 smartphone users between the ages of 15 and 69 who participated in Ericsson’s survey for its Elevating 5G with Differentiated Connectivity report were 5G smartphone users from 16 major global markets, including Australia, Brazil, Canada, Mainland China, France, Hong Kong, India, KSA, Singapore, South Korea, Spain, Taiwan, Thailand, the United Arab Emirates, the United Kingdom, and the United States. Researchers at Ericsson guaranteed that the sample, which included 750 million 5G smartphone users, was representative of the world’s 1.1 billion inhabitants.
According to Ericsson, during the next five years, the number of smartphone users who use generative AI (GenAI) apps at least once a week is predicted to rise by 2.5 times. One of the study’s main conclusions was that GenAI applications are increasing need for differentiated connectivity in order to provide continuous high-end connection during peak usage. Smartphone users believe they are prepared to pay more for distinct connection use cases like online payments, streaming, and video chatting, which are joined by the quickly expanding category.
For example, nearly one in four GenAI customers indicate they would be prepared to pay up to 35% more for high-capacity apps that guarantee quick and secure communication. Additionally, 35% of 5G smartphone users expressed interest in paying for specialized connection for critical apps, according to the study.
According to the poll, 20% of users—referred to as “assurance seekers”—were actively looking for higher connectivity for crucial apps and were prepared to pay for it, which is believed to go against the conventional belief that customers won’t pay more for connectivity.
“Users’ expectations for improved connection are growing as AI-powered applications proliferate. Customers’ expectations for AI apps’ future capabilities—possibly related to the creation of images, sounds, or videos—and their readiness to pay for such skills to function quickly and well are reflected in this, according to Jasmeet Sethi, head of Ericsson’s ConsumerLab. “This indicates a chance for global communications services providers (CSPs) to satisfy this demand by offering customized connectivity experiences.”
As CSPs shift to performance-based business models and provide customized subscriptions and plans with guaranteed performance for various market groups, their ability to generate income from differentiated connectivity may grow. “As consumers look for assured, dependable performance for particular applications, this shift could lead to a 5% to 12% increase in 5G ARPU [average revenue per user],” Sethi continued.
Additionally, one in three 5G smartphone users are prepared to reallocate 10% of their existing mobile app spend to buy apps with built-in increased connection, indicating a considerable desire for high-performance apps among 5G users. This presents an opportunity to unlock new income sources. CSPs may meet this need by providing developers with high-quality on-demand network APIs [application programming interfaces], which will allow developers to provide high-end, high-performance experiences and open up new income streams.