Discover four key trends for capturing 5G value
Ericsson ConsumerLab has conducted research across 28 global 5G markets, identifying four key trends for capturing 5G value, and giving communication service providers vital insights into what drives 5G network satisfaction and user retention.
What consumers want from 5G
The 5G opportunity in India
India 5G market: Key insights
31 million users plan to buy 5G smartphones in 2023
To delve deeper into India's 5G landscape, Ericsson ConsumerLab conducted interviews with a substantial sample size of 3,000 Indian smartphone users, all aged between 15 and 69 from Tier 1–3 towns and cities. This sample included over 1,800 individuals who have embraced 5G technology. Given the scale of our sample, our data provides statistically significant insights into the opinions of 250 million urban consumers within the Indian population, encompassing 50 million 5G users.
In India, almost half of respondents plan to purchase a new handset in the next six months. Our assessment considers not only consumer intent but also affordability, taking into account household income and the age of their current phones. As a result, 18 percent are more inclined to buy a 5G phone, and we estimate that 31 million users may upgrade to a 5G phone in 2023.
5G early adopters in India are more advanced
The early adopters of 5G technology in India exhibit a notable trend of being more advanced users compared to their counterparts in mature markets. Notably, 3 in 10 of 5G users in our survey emerged from major urban centers like Delhi, Mumbai and Bangalore. When it comes to usage patterns, if we consider various categories of apps such as streaming video, high-definition video calling, gaming, esports, AR and more, India today stands out. It has a larger share of 5G users actively engaging in these activities daily and spending significant time on them.
Specifically, 5G users in India engage in enhanced video streaming, video calling, multiple player mobile gaming, and AR services to a significantly higher degree than users in markets where 5G has been deployed for the past few years. Indian 5G users who engage with all these services could spend on average 2 hours more per week than 5G users in those markets. This usage significantly impacts mobile data consumption, leading to increased data traffic on the 5G network.
5G users in India outpace global counterparts in daily engagement with apps
5G satisfaction levels are high in India
Our analysis of satisfaction levels among Indian users indicates that 5G surpasses 4G in various aspects. Notably, a significant number of users in India express very high satisfaction with 5G, even when compared to early adopter markets. Additionally, the perception of 5G availability, which reflects how consumers perceive their frequent connection to 5G, is on a par with or even exceeds that of many early adopter markets.
In a comparison between consumer satisfaction with 4G versus 5G network performance across different parameters such as mobile gaming, video streaming, download speeds and video calling, we found that 5G consumers in India consistently report significantly higher levels of satisfaction, with a nearly 30 percent increase compared to 4G users. This indicates that 5G is effectively addressing the shortcomings of 4G and elevating user satisfaction in terms of both speed and application experiences. Some of these differences can also be attributed to ownership of premium 5G smartphones among early adopters. Around 30 percent of 5G users in our survey own a smartphone priced higher than USD 500.
4G versus 5G network satisfaction score among smartphone owners in India
5G elevates overall satisfaction by a remarkable 30 percent compared to 4G.
Indian consumer appetite and willingness to pay for novel use cases
A total of 15 percent of Indian consumers are interested in adding application bundles, including video on demand, gaming and music, to their 5G plans, even at a higher cost. They are prepared to pay a 14 percent premium for these services. However, when introduced to 8 innovative 5G use cases, user interest jumps to 44 percent. These vary from live streaming plans for content creators offering faster upload speeds, to AI-optimized mobile gaming to reduce lag, to 5G-powered AR tools that offer immersive reading of children’s books.
While demand for larger data buckets remains the most prominent expectation among consumers for 5G plans, it is noteworthy that 31 percent of 5G users tend to deplete their data allocations by the end of the month. However, an even larger portion, 58 percent of 5G users, find themselves with more than 30 GB of unused data by the month’s end. This suggests a clear need for service providers to explore more innovative approaches in crafting their 5G monetization strategy beyond just offering higher data allowances to better align with consumer preferences and usage patterns. As 5G coverage expands in India, there is a significant opportunity to unlock greater value. By offering segmented 5G propositions using QoS offerings, providers can tap into the 22 percent of smartphone users who express interest and are willing to pay a 13 percent premium for such enhanced experiences.
1. 5G network satisfaction drivers are evolving beyond coverage
5G newcomers versus experienced 5G users
The factors driving total 5G network satisfaction differ between two distinct groups: 5G newcomers and experienced 5G users. For 5G newcomers, namely individuals who have used 5G for less than 6 months, key factors influencing their overall 5G network satisfaction include mobile data upload speeds, the extent of 5G outdoor coverage and voice experience. Since 5G coverage is already built out in these markets, and improving, most users seem to be satisfied with these aspects. In contrast, experienced 5G users, namely those who have been using 5G for over a year, have different priorities driving their satisfaction. These priorities include both mobile upload and download speeds, app experience KPIs like video streaming quality, mobile gaming and video calling experience, together with the consistency of 5G speed. Notably, for experienced 5G users, the importance of video streaming experience in driving satisfaction is 20 percent higher than for 5G newcomers. These experienced users are power users or early adopters of technology and were the first to adopt 5G as opposed to mainstream users.
2. 5G is reshaping video streaming and AR usage
Over the last three years, there has been a significant upsurge in mobile data consumption among 5G users globally. 5G subscribers are consuming two to three times more data than 4G subscribers on average. This begs the question: What’s driving mobile data traffic over 5G networks?
The percentage of daily users engaging in streaming high-definition 4K videos has risen from 44 percent to 52 percent over the course of the past three years, according to our research. Additionally, the adoption of advanced video formats has seen considerable growth. Examples include 360-degree video and multi-view streaming, which allow users to pick and choose multiple camera feeds, control the angle and zoom in and out during the stream. On average, 25 percent of daily users are now engaging with these formats, signifying their rising popularity. Notably, the number of daily users of AR apps has doubled compared to the end of 2020.
Video usage is evolving over 5G
5G users are also dedicating more time to engaging with enhanced video content. This is evidenced by an increase of 10 minutes per day spent on new video formats like 360-degree videos and 15 minutes on multi-view streaming, while the amount of time spent on streaming videos in standard resolution decreased by 23 minutes. Enhanced video formats such as multi-view streaming with interactive features could drive as much as five times more data usage when compared to regular video streaming1. This shift underscores how video usage is evolving over 5G with the introduction of new formats.
3. 5G performance at key locations influences consumer loyalty
Since the launch of 5G across all 28 markets that we have studied, 17 percent of 5G users have switched providers. The main reasons behind these switches are predominantly network-related rather than pricing considerations. Roughly one in two users made the switch to obtain an improved 5G network experience. This highlights how 5G performance is becoming a pivotal factor in influencing customer decisions to switch providers. Despite the current 5G population coverage being 1.5 times that of 2021, the perception of 5G availability has only increased by 7 percent. An essential determinant of switching decisions is 5G performance in critical usage locations. Frequent network connectivity issues in crowded places like event venues and airports have a significant negative impact on consumers’ perceptions and memories. Among 5G users who frequently encounter problems in various locations, 13 percent fewer of them perceive themselves as being connected to 5G compared to those who do not experience such issues frequently.
5G performance as a protector against churn
Our research shows that users who encounter connectivity problems at event venues and at airports are 3 times more likely to churn in the next six months. This is depicted in our chart, underscoring a discrepancy between reality and expectations of 5G functioning seamlessly in crucial locations, such as congested areas like airports and concert venues. This discrepancy, particularly in locations where 5G was marketed as offering increased capacity, also highlights the paramount importance of robust indoor coverage. As 5G matures, attention should shift from providing wide area 5G coverage toward ensuring strong performance and indoor coverage in these vital locations, aligning with the initial promise of enhanced performance and high capacity.
4. 5G consumers are willing to pay a premium for differentiated connectivity
Our analysis has examined various monetization models that are either being implemented today or could be explored in the future by service providers. These include different benefits such as increased data allowances or unlimited data, plans tiered by specific speeds, bundled content-rich apps, and the possibility of network elevation or on-demand performance enhancement, known as quality of service (QoS) offerings. These QoS offerings can be generic, applied to any type of data usage, or linked to specific applications, such as gaming, video calling or live streaming.
Beyond unlimited plans
We also conducted an analysis of 5G plans and packages across 105 service providers in 30 different markets. Among these, about 13 percent have begun implementing QoS-based offerings. Some examples include offerings like 5G Stock Pro from 3 Hong Kong2, which allocates more network resources and prioritized network usage to enhance experience of a stock trading application; China Unicom3 offering Super Live Streaming package with uplink prioritization; and the ProPing service by Ooredoo Kuwait4 that offers a premium plan with low lag for mobile gaming over 5G. These offerings indicate an emerging trend in the industry, with more service providers exploring this avenue. These QoS offerings also seem to be more commonly commercialized by service providers who have rolled out a 5G standalone (SA) network. Service providers can employ multiple strategies for delivering QoS-based offerings, including techniques like network slicing or providing quality-on-demand APIs to developers such as the recent example of Deutsche Telekom commercial launch of network APIs5.