Twenty percent of 5G smartphone users willing to pay premium to CSPs for differentiated quality of service over 5G.
One-in-five 5G smartphone users seeking differentiated 5G service experiences, such as quality of service, for demanding applications are willing to pay CSPs a premium of up to 11% to enjoy the value-added connectivity, new research from Ericsson ConsumerLab reveals.
The satisfaction and user-loyalty-focused report – called 5G Value: Turning Performance into Value – highlights the CSP business case potential for 5G.
It also reveals 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 communications service providers.
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 tracking the evolution of the 5G consumer market since 2019.
The research also shows that the factors influencing consumer satisfaction are themselves changing – moving primarily from 5G geographical coverage considerations to more application-experience-based metrics such as video streaming quality, mobile gaming/video calling experience and 5G speed consistency – especially among early 5G adopters.
Jasmeet Singh Sethi, Head of Ericsson ConsumerLab, says 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. 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 – they are willing to pay an 11% premium if their service provider offers it.”
Sethi said another clear 5G customer loyalty indicator related to consumers’ experiences of the connectivity at busy locations and major event venues.
“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. 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.”
Ericsson’s Chief Technology Officer (CTO), Erik Ekudden, says the report confirms the potential of network Application Programming Interfaces (APIs) for developers, as a means for CSPs to offer enhanced network experiences customers are willing to pay for.
“In the 5G era, network Application Programming Interfaces are business interfaces for developers and application providers giving them access to network capabilities via familiar easy to use interfaces,” he says.
“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.”
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