5G consumers are willing to pay a premium for differentiated quality of service, according to a new report from Ericsson ConsumerLab. The study reveals that one in five 5G smartphone users is willing to pay up to 11% more to communications service providers (CSPs) for enhanced connectivity and value-added services. The report also highlights the potential for CSPs to capitalize on the growing number of satisfied 5G subscribers by offering differentiated experiences. However, the research also emphasizes the impact of poor 5G connectivity experiences on consumer loyalty, with customers being three times more likely to switch providers if they encounter connectivity issues at major venues such as stadiums, arenas, and airports.
The comprehensive research, which gathered insights from approximately 1.5 billion consumers worldwide, including around 650 million 5G customers, underscores the changing factors that influence consumer satisfaction. While geographical coverage was previously a key consideration, consumers are now placing more importance on application-experience-based metrics such as video streaming quality, mobile gaming/video calling experience, and 5G speed consistency.
Jasmeet Singh Sethi, Head of Ericsson ConsumerLab, notes that around 37% of surveyed 5G consumers believe that increased data allowances in their 5G plans would justify paying premium rates to CSPs. Notably, 20% of smartphone users expressed a strong preference for differentiated quality of service connectivity. These users actively seek elevated and consistent network performance tailored to demanding applications and specific key locations, and they are willing to pay an 11% premium for it.
Another key finding of the report is the influence of 5G connectivity experiences at busy locations and major event venues on customer loyalty. If the 5G experience at these locations is subpar, consumers are three times more likely to switch to a provider that can deliver optimal 5G performance in such settings.
Ericsson’s Chief Technology Officer, Erik Ekudden, highlights the potential of network Application Programming Interfaces (APIs) as a means for CSPs to offer enhanced network experiences that customers are willing to pay for. As consumers express a willingness to pay for differentiated connectivity and new functionality, APIs can unlock new revenues for CSPs by leveraging the value of their networks.
The report also explores the impact of 5G on user engagement and mobile data consumption. As service providers bundle rich enhanced video content and augmented reality (AR) applications into 5G plans, 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 also doubled since the end of 2020.
In conclusion, the report highlights the potential for CSPs to seize the opportunity presented by differentiated 5G connectivity. By offering enhanced network experiences and addressing key pain points such as poor connectivity at major venues, CSPs can attract and retain satisfied customers. With consumers willing to pay a premium for differentiated quality of service, there is significant business potential for CSPs to tap into the value of their networks and drive revenue growth in the 5G era.
