Ericsson ConsumerLab’s latest research reveals that generative AI applications are driving an increasing demand for “differentiated connectivity” among 5G smartphone users, who are now showing a readiness to pay for high-end, uninterrupted connectivity.
The Elevating 5G with Differentiated Connectivity report highlights that over a third (35%) of 5G users are willing to pay for enhanced connectivity to ensure smooth performance for essential applications, including generative AI apps, video calling, streaming, and online payments.
Jasmeet Sethi, Head of ConsumerLab at Ericsson, commented: “The latest comprehensive Ericsson ConsumerLab research indicates that as AI-powered applications become more prevalent, users’ expectations for enhanced connectivity are rising. This reflects consumers’ expectations for AI apps’ future capabilities—perhaps relating to image, audio, or video generation—and their willingness to pay for those capabilities to perform in a speedy and high-quality way. This signals an opportunity for CSPs globally to meet this demand through tailored connectivity experiences.”
Research Highlights:
- Rising Demand for Differentiated Connectivity: The report reveals that 35% of global 5G users would pay extra for guaranteed better performance for essential tasks.
- Segment of ‘Assurance Seekers’: Contrary to beliefs that users won’t pay more for connectivity, the report identifies a significant 20% segment known as “Assurance Seekers” who are eager to pay for reliable connectivity for critical applications.
- Generative AI Growth: As the use of generative AI applications is expected to increase 2.5-fold in the next five years, one in four current AI users is willing to pay up to 35% more to guarantee fast and responsive performance for these applications.
- Regional Trends: Markets in India, Thailand, and Saudi Arabia show twice the interest in differentiated connectivity compared to regions like France and Spain.
- Revenue Potential for CSPs: The report outlines a pathway for communications service providers (CSPs) to adopt performance-driven and platform-based business models.
According to Sethi: “This shift could drive a 5-12 per cent uplift in 5G ARPU (Average Revenue Per User) as users seek guaranteed reliable performance for specific applications.” Additionally, Sethi noted: “There is an opportunity to unlock new revenue pools from the significant demand among 5G users for high-performance apps with one in three 5G smartphone users willing to reallocate 10 per cent of their current mobile app spend to purchase apps with in-built elevated connectivity. By exposing Quality on Demand (QoD) network APIs (Application Programming Interfaces) to developers, CSPs can tap into this demand, enabling developers to offer premium, high-performance experiences and unlocking new revenue streams in the process.”
Survey Scope and Demographics
The study surveyed more than 23,000 smartphone users aged 15-69, covering 16 key markets across a global spread, with a focus on over 17,000 5G users. According to Ericsson, the research represents around 1.1 billion people, including 750 million 5G smartphone users worldwide. The surveyed markets included Australia, Brazil, Canada, Mainland China, France, Hong Kong, India, KSA (Saudi Arabia), Singapore, South Korea, Spain, Taiwan, Thailand, UAE, the United Kingdom, and the United States.
Ericsson’s findings underscore a growing willingness among 5G users to invest in differentiated connectivity, driven largely by the rapid adoption of AI-driven applications—a trend with substantial revenue implications for CSPs looking to transition to tailored, performance-based models that cater to high-capacity consumer demands.
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