Five ways to a better 5G

Not only are the high speeds of 5G leading to higher user satisfaction, they’re also helping people do more with their devices.

Want to hear the latest from the biggest 5G consumer study done to date? Watch on-demand Jasmeet Sethi, Head of ConsumerLab, Dr Aleks Krotoski, Tech journalist & Researcher and David Ward, Head of New Products and Propositions at Three Ireland discuss ways in which 5G is changing user behavior.

There is a wide disparity across the globe in terms of knowledge and intention to upgrade to 5G. While consumer awareness is strong, heavy tech jargon used in its marketing often muddles understanding of its value, device capabilities and offerings. While 4 in 10 intend to upgrade to 5G globally, only half of those would upgrade in 2021, the rest in 2022.

Across the 20 markets in our survey where 5G commercial networks are available, on average 4 percent of consumers own a 5G smartphone and have a 5G subscription. While 22 percent of smartphone users who own a 5G-ready smartphone are still using a 4G subscription, a further 4 percent claim they are on 5G, but use a 4G smartphone.

In China, this figure is 5 percent, and the blanket term “5G package customers” is often used by Chinese service providers to refer to anyone on a 5G subscription, regardless of whether they actually have a 5G device or access to a 5G network. In the US, our survey found 14 percent of smartphone users who claim they are on 5G are using a 4G smartphone and 12 percent who own a 5G smartphone have a 4G subscription.

This suggests a lingering confusion and knowledge gap among consumers around device capability and compatibility, 5G network availability, lack of clarity on whether access to 5G is included by default or requires a change of plan or a specific smartphone model, and the difference between 5GHz Wi-Fi usage vs. cellular 5G.

In addition, a lack of understanding regarding new services that could take advantage of 5G, and different versions and flavors of 5G network capabilities being marketed using tech jargons by the service providers, are contributing to this knowledge gap.

If the value of 5G technology had been better marketed in terms that were more relevant to consumers’ needs, an additional 22 percent of consumers globally, who already owned 5G-ready smartphones in 2020, could have upgraded to a 5G plan. This provides an opportunity for service providers to better educate consumers on 5G devices, plans and benefits and help drive broader awareness and enthusiasm.

With the pandemic and increased home-working fueling the need for better indoor 5G, indoor coverage is seen as more important to consumers than speeds and battery life. While an average 10 percent are very satisfied with 5G, compared to those using 4G, this varies globally depending on the extent of outdoor and indoor coverage.

In Switzerland, 60 percent are satisfied with 5G network performance, while only 30 percent are very satisfied with 4G. In the US, while we already see 14 percent more users being very satisfied with 5G compared to 4G, the release and usage of new mid-band frequencies would bring a further positive shift in 5G performance.

With more time spent at home, the first experience that some consumers had with 5G in 2020 was indoors. Our analysis suggests that 5G indoor coverage at home and in public places like malls and stores, is relatively more important than 5G speeds and even battery life in driving overall consumer satisfaction.

5G is triggering changes in usage behavior and brings vastly different service requirements. Wi-Fi usage is being displaced both at home and in other locations, with a quarter saying they either decreased or stopped using Wi-Fi after upgrading. Adapting to offer performance tailored precisely to the changing needs of the 5G user is paramount, as new services see increased usage.

In markets like the US, Taiwan, Switzerland, Finland and South Korea, where a higher proportion of 5G users are on unlimited plans, 22 percent have decreased their home Wi-Fi usage, while 14 percent have stopped using Wi-Fi after upgrading to 5G.

Back in August 2019, SK Telecom also reported this trend, with average monthly Wi-Fi usage time of 5G users decreasing by about 37 percent from 4.3 hours to 2.7 hours. Households with three or more members actively using home broadband were more likely to report a decrease in their reliance on Wi-Fi once they upgraded to 5G. During the pandemic, with home broadband usage at an all-time high, consumers seem to be relying on 5G cellular connectivity as a backup when performance issues arise with shared home Wi-Fi.

5G users are more engaged with using high bandwidth immersive digital services than 4G users. New services like cloud gaming and AR apps see a two hour and one hour increase respectively by 5G users, in usage hours per week. While 5G-powered VR headsets are not commercially available yet, and most usage is on Wi-Fi, 5G users already seem to be spending more time using VR content compared to 4G users. Immersive video, which includes AR and VR, already contributes to 20 percent of total time spent by 5G users on digital services.

But, while consumers are quick to pick up new trends and technology, service providers are lagging behind. While 40 percent of 5G users are satisfied with network speeds offered, only 29 percent are satisfied with the innovative apps and services bundled on the 5G plans, leaving 70 percent of users dissatisfied. Service providers need to go beyond existing bundled services, such as music and video streaming, that are already available on 4G and move towards services that could differentiate a 5G experience and promote a sense of novelty and exclusivity.

Identifying and understanding the jobs consumers want 5G to do is the first step in envisioning and offering use cases that consumers want, especially ones they are likely to pay for. While early adopters recommend 5G, they expect more innovation, and service providers need to look carefully at what “jobs” consumers want to achieve with 5G.

The study identified five key jobs consumers hope 5G will help them accomplish:

1. To be productive and efficient.
2. To be creative.
3. New ways of connecting and socializing.
4. The need for novelty (thrill, surprise, discovery).
5. Rewarding me-time.

The value of the jobs-to-be-done theory is that it provides an anchor point from which service providers can create value via new or existing use cases. Despite the pandemic, smartphone users surveyed are willing to pay 10 percent more on average for 5G plans that offer enhanced mobile broadband access and even more if bundled with innovative digital services. Globally, the inclusion of relevant use cases on a 5G plan increased the 5G premium by a further 20-30 percent.

Services providers should go beyond showcases, by accelerating and bringing to life use cases via ecosystem partnerships. They need to offer exclusive content and services that can differentiate a 5G experience from 4G and promote a sense of novelty and exclusivity.

Using the jobs-to-be-done framework, we tested 27 different use case concepts aligned with the consumer needs, to assess which concepts consumers feel are worth paying for, while also assessing their current development phase.

1. Business ready: digital services/use cases that are currently being bundled in 5G plans by service providers or are widely available.
2. Technology showcases: use cases that are currently relegated to just technology demonstrations by service providers.
3. Still in R&D: use cases that require significant research and development to solve technology complexity or see ecosystem readiness challenges.

Two-thirds of valuable use cases rated by consumers were found to be only in the technology showcase or research and development stage, and not available for consumers to experience.

A recent ConsumerLab study uncovered USD 31 trillion addressable consumer revenues that will flow over 5G networks by 2030. Service providers could secure USD 3.7 trillion of this, driven by 5G connectivity, which remains the biggest revenue driver.

However, the greatest revenue boost will come from bundling digital services with 5G tariffs, in order to convince consumers of the value of a 5G network platform. Service providers together with other ecosystem players should try to accelerate the development of digital services that are still being used as just showcases and commercialize them. This way they meet consumer needs while unlocking the full revenue potential of 5G.