What customers want from 5G, Ericsson says users willing to pay 66% more premium for services

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Published: June 19, 2019 6:01:42 PM

The services are crucial in terms of customer expectations and industry opportunities for the telecoms who can benefit from the “66% premium” that customers are ready to shell out for 5G service.

Ericsson signed managed services contract with RCom after Chinese telecom gear maker Huawei stopped services to the debt-ridden telecom operator because of payment issues. (Reuters File photo)(Reuters File photo)

As telecoms look to make 5G a reality soon for everyone, customers have already given an insight into services for which they are willing to pay the most when 5G rolls out, Swedish telecom service provider Ericsson revealed in its June 2019 Mobility report. Among these are virtual tactile shopping, home sensor services, 5G TV, 5G in-car entertainment, VR passenger and VR cloud gaming. Spread across categories such as automotive, entertainment, gaming and VR, smart home and retail & communications, these services are crucial in terms of customer expectations and industry opportunities for the telecoms who can benefit from the “66% premium” that customers are ready to shell out for 5G service, Ericsson report observed.

Ericsson has also found the premium that can be expected from the customers who look forward to 5G services. While ‘early adopters’ are ready to pay Rs 320 on average for 5G, ‘followers’ were found to be willing to pay Rs 200 more and ‘laggards’ about Rs 180 extra. Out of the total subscribers, early adopters and laggards constitute 60% and the rest are followers. Also, “premium is on top of current ARPU [Average Revenue Per User] and the median ARPU for our Indian sample is Rs 300 as mentioned,” Ericsson said. These findings were majorly from metro cities, Head of Ericsson India and Head of Network Solutions, South East Asia, Oceania and India, Nitin Bansal said.

Ericsson India has been partnering with telecom operators such as Bharti Airtel to launch 5G in India. India, which is one of the highest data consuming countries in the world for smartphone usage, will consume about 18 GB data per customer by 2024, Ericsson said at the event. Hence, the companies need to be prepared to cater to such an opportunity, Nitin Bansal said at the event. The chief drivers for data consumption in India have been “increased numbers of LTE subscriptions, attractive data plans being offered by service providers, and young people’s changing video viewing habits have driven monthly usage growth,” it added. Also, despite the uptick in 5g adoption by 2024, 4g will still remain key technology in the coming five years with 82% of the subscribers using 4G and GSM/ Edge only 2G.

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