The News: The new edition of the Ericsson ConsumerLab report highlights differentiated 5G connectivity opportunities for CSPs. Read the full press release on the Ericsson website.
Ericsson’s ConsumerLab Report Points to 5G Monetization Opportunities
Analyst Take: Ericsson’s new ConsumerLab research indicates that one in five smartphone users are seeking differentiated 5G service experiences, such as quality of service (QoS), for demanding applications and are willing to pay communications service providers (CSPs) a premium of up to 11% to experience and enjoy the value-added connectivity. The comprehensive research, which reflects the views of an estimated 1.5 billion consumers globally, including about 650 million 5G customers, is part of an Ericsson research series that has tracked the evolution of the 5G consumer market since 2019.
The satisfaction- and user-loyalty-focused report, called “5G Value: Turning Performance into Value,” highlights the CSP business case potential for 5G as a growing number of subscribers around the world express increased satisfaction. From my view, this takeaway is key as it runs counter to the highly perceived notion that 5G is delivering an underwhelming experience for users. This finding demonstrates that 5G services are maturing ecosystemwide, especially as CSPs make progress toward implementing 5G Standalone (SA) capabilities as they migrate away from the initial deployments of 5G non-standalone (NSA), which entailed combining 5G radios with pre-5G LTE core technology.
The new research shows that unsatisfactory 5G connectivity experiences at key locations such as stadiums, entertainment arenas, and airports can cause a threefold increase in the likelihood of customers switching CSPs. The research also shows that the factors influencing consumer satisfaction are evolving – moving primarily from 5G geographical coverage considerations to more application experience-based metrics such as video streaming quality, mobile gaming/video calling experience, and 5G speed consistency – especially among early 5G adopters.
From my view, the report also substantiates the potential of network application programming interfaces (APIs) for developers as a way for CSPs to cultivate augmented network experiences that customers will purchase. I see network APIs gaining more 5G ecosystem momentum due to the Linux Foundation and GSMA collaborating on the CAMARA Project as well as the GSMA Open Gateway initiative to provide a standards-backed foundation for network APIs that are aimed at broadening developer support. As such, I expect that high-profile applications well suited for 5G network connectivity, such as premium connectivity, augmented reality (AR), and cloud gaming, can start to provide tangible revenue diversification for CSPs and developers.
I anticipate that network APIs will play an increasingly integral role in the ability of CSPs to commercially offer APIs that enable developers to generate and manage network slices, as evidenced by T-Mobile’s announcement at Mobile World Congress 2023 (MWC23) Las Vegas of its network slicing beta now available to developers nationwide. Another key area is QoS management where network APIs are available to developers to create applications that take advantage of QoS features of 5G, ensuring that applications receive the required bandwidth and latency to ensure optimization and monetization.
It would be interesting to find out more about consumers who use their mobile devices primarily for their work including gig jobs such as ride services (e.g., Uber, Lyft) and merchandise sales (e.g., entertainment venues) as well as various hybrid/distributed work environments. From my perspective, such mobile subscribers can be strong candidates for API-enabled premium QoS offerings. Use cases can extend to organizations subsidizing consumer plans for capabilities such as network slices for mobile devices that provide security assurances supporting companywide security policies (i.e., secure access service edge [SASE]).
Ericsson ConsumerLab’s New 2023 Research Takeways
Taken together, the Ericsson ConsumerLab report identifies four key trends:
- 5G network satisfaction drivers are evolving beyond coverage considerations.
- 5G is reshaping video streaming and AR usage.
- 5G performance at key locations influences consumer loyalty.
- 5G consumers will pay premiums for differentiated connectivity.
Overall, I believe the trend of consumers conveying willingness to pay for new capabilities and differentiated QoS will help drive broader support for network APIs throughout the developer and application provider communities. As a result, developers are gaining more access to 5G capabilities to cultivate premium experiences that CSPs can leverage in diversifying their 5G and mobile revenue streams.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.
Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.
