Thirty-five percent of 5G smartphone users interested in paying for differentiated connectivity
Research representative of 1.1 billion people, including 750 million 5G smartphone users
Report identifies revenue generation opportunities for communications service providers
Generative AI applications are emerging as a key area in driving interest in differentiated connectivity – guaranteed uninterrupted high-end connectivity when you need it most – among 5G smartphone users globally, new Ericsson ConsumerLab research shows.
With the number of smartphone owners who use Gen AI apps on at least a weekly basis expected to increase 2.5-fold in the next five years, the rapidly growing category joins existing differentiated connectivity use cases such as video calling, streaming and online payments that smartphone users say they are willing to pay a premium for.
Differentiated connectivity and consumers’ willingness to pay communications service providers (CSPs) for the guaranteed higher performance for essential apps, is the subject of the latest global report from Ericsson ConsumerLab, called Elevating 5G with Differentiated Connectivity, published today, November 13.
Almost one-in-four Gen AI users say they are already willing to pay up to 35 percent more for guaranteed fast and secure connectivity for such high-capacity applications.
The research shows that 35 percent of 5G smartphone users surveyed say they would be interested in paying for differentiated connectivity for essential applications.
The CSP-focused report also addresses revenue generation opportunities for service providers based on the survey research.
Jasmeet Sethi, Head of ConsumerLab, Ericsson, says: “The latest comprehensive Ericsson ConsumerLab research indicates that as AI-powered applications become more prevalent, users’ expectations for enhanced connectivity are rising. This reflects consumers’ expectations for AI apps’ future capabilities – perhaps relating to image, audio or video generation – and their willingness to pay for those capabilities to perform in a speedy and high-quality way. This signals an opportunity for CSPs globally to meet this demand through tailored connectivity experiences.”
Sethi says the differentiated connectivity revenue generation potential for CSPs will increase as they transition to performance-based business models, offering tailored subscriptions and plans with assured performance for different consumer segments in the market.
“This shift could drive a 5-12 percent uplift in 5G ARPU (Average Revenue Per User) as users seek guaranteed reliable performance for specific applications,” he says. “Additionally, there is an opportunity to unlock new revenue pools from the significant demand among 5G users for high-performance apps with one-in-three 5G smartphone users willing to reallocate 10 percent of their current mobile app spend to purchase apps with in-built elevated connectivity. By exposing Quality on Demand (QoD) network APIs (Application Programming Interfaces) to developers, CSPs can tap into this demand, enabling developers to offer premium, high-performance experiences and unlocking new revenue streams in the process.”
Key research takeaways:
Willingness to Pay: 35 percent of global 5G users are open to paying more for differentiated connectivity that guarantees better performance for essential tasks
Assurance Seekers’ segment: Contrary to the belief that users will not pay extra for connectivity, the survey identified 20 percent of users, known as ‘Assurance Seekers’, actively seeking elevated connectivity for critical applications and are willing to pay for it
Generative AI app demand: The number of smartphone users using generative AI apps weekly, is expected to rise 2.5-fold in the next five years. One-in-four current AI users are already willing to pay 35 percent more for differentiated connectivity to ensure fast and responsive performance of AI-driven applications
Regional interest: Markets such as India, Thailand, and Saudi Arabia have double the share of smartphone users interested in differentiated connectivity compared to markets such as France and Spain
Five-stage journey for CSPs: The study outlines a pathway for CSPs from non-differentiated mobile broadband to performance-driven and platform-based models, where network APIs empower developers to create customized app experiences.
More than 23,000 smartphone users between the ages of 15 and 69 were surveyed online for the research – more than 17,000 of which were 5G smartphone users from 16 key markets with a global spread. Ericsson researchers say the survey is representative of 1.1 billion people, including 750 million 5G smartphone users.
Surveyed 5G users came from: Australia, Brazil, Canada, Mainland China, France, Hong Kong, India, KSA, Singapore, South Korea, Spain, Taiwan, Thailand, UAE, United Kingdom and the United States.
source: cyprusshippingnews.com
