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5G is the new WiFi

Today 4G connectivity comes at a premium, whereas WiFi is free. But that could all change, and 5G just might be the new WiFi…

Man sitting on a conference with a laptop
Michael Björn

Head of Research Agenda and Quality at Consumer & IndustryLab

Category
5G

For you to see how that could happen, I’d like to invite you along to the University of Lund. I am an adjunct professor there, and regularly give lectures to Masters’ students in an international business management program. I let the students play at being cellular operators who need to make strategic product planning.

One idea the students invariably come up with in this exercise is a free public WiFi service. However, when I ask the students about their proposed business model for this, they equally invariably come up empty-handed. How can that be? These are international Masters’ students in business management…

Parents demand WiFi

As it turns out, these students have been brought up by their parents to avoid the cellular network – because it is expensive – and use a WiFi connection whenever possible. At least half of the students in these classes come from abroad, so this is not just a national issue, mind you, but an international trend.

Personally, I think WiFi is OK for home use, but hate all the logins and hassle in airports, hotels, cafes and public places. And then there’s the outdated and already cracked security on WiFi that is only now about to be upgraded.

But I don’t learn as I live. I have been part of the problem of teaching the younger generation something else. My son has a far smaller cellular data plan than what he uses in a month.

Why 5G could be the new WiFi

Something really big would need to come along in order for us parents to change what we tell our kids. And that thing just might be 5G…

Because although a new “G” is primarily a new tech standard, it is also an opportunity to shape what that “G” stands for in people’s minds. So, whereas 4G and previous Gs have stood for something relatively costly while WiFi is seen by many as free, it doesn’t have to always be like that.

After all, WiFi isn’t free at all. That is just perception. For example, I am paying around USD 80 per month for our two fixed broadband subscriptions. And that is just for plain internet connectivity, no TV or other services included. Another way to put it is that I pay USD 80 every month just for “free” WiFi access at home.

Pretty damn expensive. And that doesn’t even include the initial sign-up fee which was about USD 2000 for each subscription. But, it certainly gives my family the sense of unlimited.

A recent Ericsson ConsumerLab report showed that whereas consumers might not need unlimited mobile broadband subscriptions, they want to get the sense of unlimited. In other words, cellular access doesn’t have to be free, but it needs to convey that all-important sense of unlimited. That’s what counts.

Now is a good time to change perceptions

A couple of things point to right now being an incredibly good time to start building a new perception for the next “G”.

First of all, there are the data-sharing scandals. More people are realizing that free apps aren’t free. They don’t even feel free anymore.

But more importantly, there is the expectation among consumers that 5G will be as good as, or even better, than WiFi.

Graph showing consumer expectations on 5g wifi performance


In this new Ericsson ConsumerLab study, 61 percent expect that data speeds will be faster than WiFi. That should be contrasted with the fact that only 17 percent believed the speed today is faster on cellular than on WiFi. And whereas WiFi still leads consumer expectations when it comes to unlimited use, as many as 43 percent think that 5G will actually be better than WiFi in this regard, compared to only 20 percent on 3G/4G currently.

The business case for ‘free’

Today, WiFi is sometimes used for “offloading” from the cellular network. But maybe it is time to think in terms of “onloading” instead. After all, in many countries, the lion’s share of the data used in a smartphone happens through WiFi. That is also probably still the case in the US for example. So even changing that balance a little bit would be huge.

However, nothing will happen automatically just because 5G is launched. Changing this long history of perception would take a major rebranding effort. We are probably talking about a coherent approach over several years and not just a marketing campaign.

But crucially, as opposed to the ideas about providing free public WiFi that my students always propose, such an effort could be based on real business cases. One interesting example of how that could happen is AT&T becoming the exclusive 5G provider for Magic Leap headsets. Internet access does not need to be free – it just has to give the user a sense of free – meaning there is money to be made.

So – will 5G be the new WiFi? The answer lies in who will own the perception of “free”.

Discover more insights into 5G consumer business and what consumers are expecting from 5G.


ABOUT THE CONTRIBUTOR
Michael Björn
Michael Björn is Head of Research Agenda and Quality at Consumer & IndustryLab at Ericsson ConsumerLab and has a PhD in data modeling from the University of Tsukuba in Japan.
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