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Leveraging 5G capacity in mobile service packages

Leveraging 5G capacity in mobile service packages

Mobile service packaging trends

5G’s capabilities are allowing service providers to offer new packages with advanced services

Key findings
  • 5G has matured to become the standard choice offered to users.
  • As many as 60 percent of 5G service providers now offer multi-play offerings with media packages, compared to just 30 percent of those still on 4G.
  • Packages aimed at live streamers are emerging, using network slicing to guarantee uplink performance when streaming from mobile phones.

An updated Ericsson study1 of retail packages offered by 308 mobile service providers worldwide shows that as 5G matures, service providers are making it the standard choice for consumers.

The practice of having long-term contracts as the default for SIM-only plans seems to be continuing and expanding among service providers globally, with the majority setting the default option on their websites to 24-month contracts instead of 30 days. In addition, most offer discounts on 24- and 12-month options versus 30-day contract periods.

Some form of data buckets are available from nearly 99 percent of the surveyed service providers, while 45 percent offer at least one unlimited data package to their users. There are significant regional differences, and in Western Europe 89 percent of service providers have unlimited offerings as part of their plan structure. It is also four times as common to have unlimited plans among the service providers who have launched 5G compared to the group that only provide 4G services, 61 percent versus 19 percent.

The use of boundary conditions limiting the ability to tether and use cameras or other IoT devices is still quite common within unlimited data plans (16 percent), which speaks toward the high risk associated with unlimited plans. Regular changes in plan structures are common, and a popular trend has been toward minimizing the number of plans available, or changing every plan to include 5G. As in the previous study, a significant percentage of service providers have either removed or introduced unlimited data plans within their offering structure. This makes it the offering type with the highest volatility of all types being surveyed.

Figure 13: Percentage of service providers with and without selected 5G offerings

The capabilities of 5G drive changes in service provider offerings

This study also examines the specific differences between service providers offering 5G and those who have not yet launched 5G in their markets. Even though unlimited data plans present the risk of subscribers increasing their data usage indefinitely, 5G networks can manage increasing traffic volumes more efficiently. Service providers are likely betting that data consumption from smartphones will grow at a reasonable rate.

Another data plan being offered is service-based connectivity, and there is a correlating higher percentage of this type of data plan among service providers who do not offer 5G yet. Currently, 70 percent of service providers on 4G have these plans available in their structure, compared to 51 percent of 5G service providers. A similar trend can be seen when looking at the off-peak plans, which have previously been commonplace in Africa, parts of Latin America and a few markets in Asia. These plans were introduced with 3G networks and often lived on after the launch of 4G. In later years, and with the introduction of more advanced versions of 4G and/or 5G, these plans are starting to become unavailable. As with many of the other differences being observed, these changes can be tied to the increased network capacity provided by 5G.

Service providers are utilizing 5G’s toolbox to create offerings

A more profound difference with 5G are the tools becoming available, which allow for greater control of user experience, for example through APIs and network slicing. Here, a new set of offerings with very specific properties are emerging. The basic plan structure remains, with data buckets as the foundation, with or without unlimited plans at the top end. In addition to these, other plans are being made available which target specific use cases and customer segments. This could mean offering certain performance guarantees, such as can be seen in Austria where a service provider is guaranteeing a minimum data speed for their Fixed Wireless Access (FWA) service.

Another example is packages targeting live streamers, for example influencers or anyone wanting to share their favorite moments in real time. These packages are using network priority functions, or network slicing, to guarantee a better uplink performance when live streaming from mobile phones. Other packages are specific to a location or event where many users are gathering, where there is a risk of congestion or other network challenges. It is very common among service providers with 5G to bundle media content with some of their plans. Traditionally, these bundles apply only to the most expensive plans, but it is becoming more common to separate these offerings. While it may still be called a bundle, it is added as an option as decided by the user. Other types of bundle offerings may cover a mobile subscription, home broadband and a home phone. This is commonly known as triple play, and adding a media package into the bundle makes it a quad-play offer. As many as 58 percent of service providers with 5G are now offering multi-play offerings with media packages, versus only 31 percent of those still on 4G. This is another example of the capability of 5G and how it drives changes in service providers’ offerings.

For device-based offerings – commonly including smart watches and bag-, dog- and kid-trackers – around 68 percent of service providers with 5G have these types of devices available to consumers, with a data plan attached. Only 21 percent of those not providing 5G offer any such devices with data plans. The reason for this difference is likely not found in the capability of the network, but rather has to do with market segmentation and ARPU levels. Smart watches, especially those with an independent subscription, are still quite expensive and are much more common in high-ARPU regions, which are also the first regions to transition to 5G.

Similarly, family and share plans are quite common in high-ARPU regions where it is being used as an effective churn-reducing tool. Over 64 percent of service providers with 5G are offering these plan structures, whilst that number is around 36 percent among those without 5G service.

Figure 14: Number of service providers per type of offering

1. November 2023.

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