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Early adopters expect to pay 32% premium for 5G

Potential early adopters of 5G say they expect, on average, to pay more for their devices and services, but they expect measurable improvements on 4G from the get-go

Contrary to what many industry waters might think, consumers apparently do see near-term benefits from 5G mobile networks, and early adopters are ready to spend heavily on a premium service, according to new research from Ericsson’s ConsumerLab research unit.

Ericsson’s report, 5G consumer potential, set out to bust some industry myths surrounding 5G – namely that it offers no short-term benefits to users, that there are neither real use cases nor a price premium, that smartphones will be some kind of “silver bullet” for 5G and that 4G usage patterns can be used to predict 5G demand.

“Through our research, we have busted four myths about consumers’ views on 5G and answered questions such as whether 5G features will require new types of devices, or whether smartphones will be the silver bullet for 5G. Consumers clearly state that they think smartphones are unlikely to be the sole solution for 5G,” said ConsumerLab head Jasmeet Singh Sethi.

It found that in general, consumers were willing to pay a 20% premium for 5G services, rising to 32% for around half of early adopters, with users already sold on the idea that 5G will bring them relief from congested 4G networks in urban areas, and the possibility of using 5G as a home broadband alternative.

The group that identified as early adopters were also more likely to demand enhanced devices for their money.

The most popular prospective features emerged as enhanced battery life and increased storage, but consumers also identified multiple cameras with 360-degree capabilities, holographic projectors, security beyond facial recognition, and enhanced sensory experience that could, for example, allow users to feel textures on the screen. Many also mentioned foldable screens, which have so far been a notable failure.

The most hotly anticipated use cases, meanwhile, included higher resolution video, as well as augmented and virtual reality applications. The study found that one in five smartphone users’ data usage could hit 200GB or more per month by the middle of the 2020s.

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In light of this, O2 chief operating officer Derek McManus, who contributed to the report from an industry perspective, said consistency of experience would be the challenge for mobile operators in the 5G world.

“For a guaranteed quality of experience, we will be able to charge a premium. For services that require low latency, we will be able to charge a premium. For 5G as a pure bearer alone? [That will be] harder,” said McManus.

For smartphone manufacturers, meanwhile, Kenneth Stewart, chief wireless technologist at Intel, argued that 5G would become more important for them than they currently understand.

“Once the need for latency becomes prevalent, LTE will run out of options,” he said. “5G has the engineering potential to deliver enhanced experiences that will truly delight users. And – critically – be perceived by users to be adding invaluable services; something far more than just a marketing gimmick.”

The 5G Consumer Potential report is available to download online. The research was based on quantitative data from 35,000 online interviews with people aged from 15 to 69 in 29 countries, including the UK. Six additional focus group interviews were conducted in London, New York and Seoul.

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