5G has been a hot topic of conversation ever since its inception, when it became clear that this next-generation network would represent a step-change in connectivity for consumers and businesses. Industry excitement has been widespread, and it's easy to see why. 5G's unique properties, including super low latency, blazing fast speeds, and exceptional bandwidth, promised brand new experiences for consumers and an opportunity to transform business models for operators.
Being a marketer involved in the industry, it's been fascinating to see the conversation around 5G grow and evolve. But it's sometimes been difficult to separate the industry's enthusiasm for 5G from the reality of consumer and enterprise adoption.
Though we are relatively early into this network generation's lifecycle, it's been two years since the UK's first 5G network was launched. Ericsson has used this moment as an opportunity to take stock, conducting the world's largest ever study of 5G consumers and early adopters, 'Five Ways to a Better 5G', that represents the views of 40 million daily smartphone users in the UK, including two million 5G users.
The report gives some indicators whether we as an industry have succeeded in translating our excitement for 5G into momentum among consumers and businesses to quickly adopt it. Unfortunately, the answer appears to be: 'not yet'. Its headline findings show that while there's a huge opportunity for UK operators to add 5G subscribers and drive profitable growth, adoption to date has been slow.
My key takeaway from this landmark piece of research is that marketing is, somewhat ironically, both the cause of, and solution to, this challenge.
Consumers are confused (and marketing shoulders some of the blame)
Ericsson's research highlights that consumer adoption of 5G has been gradual in the UK, with just 3% having a 5G phone and a 5G subscription. Our survey results highlight a knowledge gap among the general public, with confusion on everything from the way device and network capabilities are marketed (5G ready, 5G SA, 5G NSA…); subscription needs (is access to 5G included by default, or does it need a new plan?); competing nomenclature (5GHz WiFi and 5G cellular); and 5G availability (especially granular detail on coverage).
Marketing is certainly a driver of this confusion. But it must also be seen as our solution to clarifying these areas, while also providing a compelling reason to switch to 5G, in turn driving the sharp increase in subscriber numbers that will justify both our industry's excitement over 5G and heavy investment in deploying the technology.
UK users with a 5G handset but no subscription represent easy wins
Our research indicates that five million UK smartphone users could take up 5G in 2021 if it was promoted to consumers in the right way. Of these potential subscribers, some represent easy wins that could generate some much needed momentum. Across the UK, 13% of smartphone users who own a 5G-ready handset are still using a 4G subscription. They are primed and ready to convert to 5G, but either do not realise they need a 5G subscription to get the most out of their handset, or do not see enough of a compelling reason to switch just yet.
The opportunity for operator marketers lies beyond just subscriber growth
Consumer data from our study revealed three key commercial opportunities for marketing leaders at mobile operators.
Firstly, there is a clear relationship between 5G and brand referability (NPS) in the UK. Despite 5G networks being still in their infancy, on average 9% more 5G users said they were very satisfied with network performance compared to 4G users. NPS for 5G users in UK was 23 points higher than 4G users.
Secondly, there's evidence that 5G products can increase consumer value. 5G could uplift average revenue per user (ARPU), as consumers are willing to pay 10% more than their existing tariffs for 5G. This rises to 17% if compelling digital services are bundled with solutions that make the most of 5G's capabilities, such as cloud gaming, augmented reality (AR) apps and streaming video services. There is a pressing need to go beyond marketing stunts, showcases and demonstrations to commercialising these services.
Thirdly, 5G can enable operators to enter new markets and broaden their market share beyond cellular users. The UK's lockdowns prompted by COVID-19 caused a huge strain on broadband and home WiFi networks, which often became congested. Our survey revealed that many people with a 5G subscription switched to using their 5G network rather than their home broadband for work and leisure. Between this trend and the opportunity to offer people 'Fixed Wireless Access' – fibre broadband-like performance with no wires or roadside installation, provided over a 5G network – network operators could increase their share of customers and the time spent on 5G networks.
Where marketing can focus its efforts to seize the opportunity
- Speak clearly and be transparent on the details: We need to stop using confusing, industry jargon and speak clearly to consumers. Importantly, this includes being detailed when it comes to 5G availability. Our research shows that misguided perceptions about the availability of 5G have a major impact on the likelihood of consumer adoption. A significant majority (57%) of 4G users in the UK think that 5G is not available or is available but only a small part of the time. Their likelihood of adopting 5G increases a huge 7x if they see 5G as being available most of the time.
- Talk to consumers in benefits that matter to them: Carrying out surgery remotely using a robotic hand or a factory floor with 5G powered robots is undoubtably an impressive demo of 5G's power. But it's not what will make an average user want to rush out and subscribe. Operators have an opportunity to differentiate 5G by supercharging existing experiences that consumers already understand and care about. These might include 5G TV and spatial hi-fi music, enhanced mobile broadband, improved smart home features, and immersive AR/VR event and sporting experiences. All of these examples are perceived as important by consumers in driving 5G premium pricing and, critically, could be offered today.
- Provide innovative bundled services not possible on 4G: Our research shows that 66% of subscribers expect more innovative services to be offered. This clearly indicates that there are major opportunities for forward-thinking operators to be first to market with a compelling bundled 5G proposition.
It's time for marketing to play a key role
When considering the role marketing plays in 5G adoption against that of accelerating network rollout, it can feel like a chicken and egg situation. Consumers won't buy 5G if it's not available and valuable to them, and operators might be loathe to invest heavily in deployment if the market interest isn't there to justify it.
But we in the UK need only to look at other leading countries to see that both can, and must, work hand in hand. In South Korea, for instance, SK Telecom targeted its first phase of rollout on geographic locations that had the most market potential. These included large city centres, major traffic and commuter routes and other densely populated areas. The strategy – which also included the deployment of a premium 5G network experience and innovative services, such as VR and AR, streamed cloud gaming, and 5G media – worked there and could work here, too.
5G is a game-changing technology for our industry and for UK consumers. The opportunity to grow 5G subscriptions, improve the customer experience, increase customer value, grow brand loyalty and extend into other markets is clear. Also clear is UK consumer appetite for 5G… if it's marketed to them in the right way.
