YOU ARE AT:5GAre consumers willing to pay (more) for 5G?

Are consumers willing to pay (more) for 5G?

Two recent studies highlighted consumers’ willingness to pay a premium for 5G service, but devices, and whether 5G actually provides a new kind of customer experience, could prove to be sticking points.

Matrixx Software recently surveyed more than 4,000 mobile users in both the U.S. and the U.K. to ask about the value that users place on next-generation networks. Matrixx concluded that “respondents revealed a willingness to open their wallets if 5G delivers an enhanced connectivity experience.”

“The feedback from consumers paints a very clear picture for operators — ‘deliver a 5G experience worth the attention, and we’ll gladly pay for the privilege of using it,’” said Dave Labuda, founder, CEO and CTO of Matrixx Software. He added that “5G presents a real opportunity to deliver a powerful value-add to the consumer,” but went on to say that “Speed to network isn’t the whole battle. The operator who wins the 5G race will be the one to deliver an entirely new experience that trumps what is available to consumers today.”

Matrixx’s survey also found that 16% of those surveyed were not willing to pay more for 5G — either because their current service was good enough; they figured that carriers would eventually provide 5G anyway; they simply couldn’t afford to pay more; or they felt that the potential benefits didn’t justify the added cost.

Both the Matrixx survey and a PwC survey from last fall found that consumers were, at least at some level, dissatisfied with current mobile and/or home network services and are hoping 5G can resolve their issues. The Matrixx survey found that with “nearly 70 percent of mobile users surveyed across both continents [complained] that 4G connectivity is too slow, isn’t available everywhere, and connections are not reliable in heavy traffic areas.”

The PwC survey, conducted last fall across a statistically representative sample of 1,000 Americans between the ages of 18-64 who have access to the internet, found that despite relative overall satisfaction with home and mobile services, there is “mounting frustration with overall reliability, speed and cost” of current offerings. In particular, PwC that more consumers were “completely satisfied” with their mobile internet experience than their in-home one and that faster internet access via 5G was the primary reason that users were willing to pay more for 5G.

PwC reported that 33% of respondents said they would pay more for 5G in the home, while 31%
would do the same for mobile. On average, end users were willing to pay an extra $5.06 per month for 5G service to the home and an extra $4.40 per month for mobile 5G.

Matrixx’s survey showed an overall promising picture of willingness to pay — and pay more — for 5G, if carriers can deliver a better consumer experience. The company found that of the 33% of consumers who were confident that 5G would solve their connectivity issues, 87% planned to upgrade to a 5G device and 78% were willing to pay more for such devices; 88% indicated willingness to pay more for 5G network access; and 76% said that they would switch carriers to get 5G service.

PwC, meanwhile, found that seven out of ten respondents said that if they needed a new device to utilize 5G, they would wait until they were eligible for an upgrade rather than buying a new device as soon as it was available.

ABOUT AUTHOR

Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr