5G is coming sooner than expected, and with it, opportunity
Is 5G overhyped? Not according to two recent Ericsson reports, which tell us *5G is coming faster than previously anticipated – and consumers are **more eagerly anticipating the latest generation of mobile wireless technology than previously thought. And while the convergence of these two trends creates an opportunity, we must delve deeper into the “why” to ensure 5G lives up to expectations.
In my first blog post in this two-part series, I examined in-depth some of the pain points U.S. consumers are experiencing with their current wireless service. But with that discomfort comes opportunities – here are the top three and what they mean for companies developing 5G business plans.
U.S. consumers have knowledge – and high expectations – for 5G
5G is not just anticipated by the early adopters and the tech savvy. An estimated 55 percent of U.S. consumers say they have at least a basic knowledge of 5G, with 22 percent saying they’re very familiar.
Not only are consumers informed about 5G; they won’t be satisfied with the technology only powering incremental improvements in smartphones. Forty-eight percent of consumers expect 5G to need an iconic device before adoption can really take off. There will be an opportunity here for new business models, as the expectations are that 5G will create a fundamentally more immersive experience, driven by devices that may not even exist today.
Underpinning a lot of these growth statistics will be an increasing appetite for data. Data use is projected at a 34 percent compound annual growth rate from 2018 and 2024, growing from 7GB to 39GB a month. Video will be a main driver of this, especially new formats such as 4K and 360-degree video. Additionally, the new gaming applications 5G is predicted to unlock, such as streaming platforms like Google Stadia and more immersive mixed reality, will play a big role.
Consumers are ready and willing to adopt 5G
Ericsson recently increased its forecast for 5G subscriptions and now expect there will be 1.9 billion 5G subscriptions globally for enhanced mobile broadband by the end of 2024. This will account for over 20 percent of all mobile subscriptions at that time. In North America specifically, 63 percent of all mobile subscriptions are expected to be 5G by 2024, which amounts to 270 million subscriptions nationwide.
The penetration of 5G mobile subscriptions shows that consumers are ready and eager to adopt this next generation of mobile technology as access and availability continues to expand. As mobile operators deploy 5G, they will continue to phase out 2G and 3G connectivity and ensure customers are accessing either a 4G or 5G network in order to meet their growing expectations.
With high expectations comes opportunity
Since consumers are informed and showing high anticipation for the arrival of 5G, there is a clear opportunity for businesses that can rise to meet these expectations.
Our consumer report found that people would be willing to pay USD 20 monthly premium for 5G, but that comes with a major caveat – that the 5G offering would have to be bundled with a new attractive use case to make the spend worthwhile. Operators willing to put their 5G offerings out ahead of the pack have the best chance of capturing these early adopters.
Those offerings will be spread out over a number of different use cases, although video will play a major role, with 74 percent of mobile traffic in 2024 estimated to be video-related. Ericsson has identified 31 concrete use cases that will be introduced in the next five years, spread across use case categories such as automotive, gaming, AR/VR, enhanced mobile broadband, smart home/fixed wireless access, shopping, and immersive communications.
We’re at a critical time for 5G, as select markets roll out their 5G networks and early adopters get their hands on the first 5G-enabled devices. We know that there is a desire among consumers for the fast speeds and unique use cases the next generation of mobile wireless is poised to deliver. It’s an opportunity that is there for the taking.