Jasmeet Singh Sethi, Head of ConsumerLab at Ericsson, shares insights on UK consumer perceptions of 5G and the reasons for its sluggish uptake across the country
Consumer adoption numbers for 5G services in the UK make for sobering reading. According to our ConsumerLab research, UK customer numbers lag behind leading markets such as the US and Asia, almost half of non-5G smartphone users have no plans to upgrade, while the cost-of-living crisis has already led to 15% delaying plans to purchase a 5G device.
When you consider that we’ve passed the three-year anniversary of 5G’s UK launch, flagship phones from major manufacturers all have 5G capability, and coverage is available from all UK operators in almost every major city, this lack of interest in the UK is concerning.
The reality is that only hardcore early adopters have signed up for 5G in the UK. This leads us to an obvious question. Why has the public been so slow in adopting a technology that promises so much?
It is within the question that we see an answer. 5G’s promise, more specifically the fact that consumers in the UK are yet to see much of a difference from 4G, is the crux of the issue. It’s a catch-22 situation for operators, who can’t convince consumers to buy exciting new services built on 5G if such services don’t exist in any meaningful way, but can’t justify the creation of such services without strong demand…
Population coverage is no longer King
The first thing telco operators need to do is to wean themselves off the idea that success means covering large swathes of the population with 5G.
In truth, even this has yet to be fully achieved, as the UK’s total population coverage stands at 54 percent, while our ConsumerLab research shows that only 13% of consumers perceive being connected to 5G more than 50% of time.
The fact is the telco industry has sacrificed performance in its focus on coverage. We have relied on low-band spectrum, Non-Standalone Core and Dynamic Spectrum Sharing, all of which combine to deliver an experience only marginally better than 4G. When you look at benchmarking from Opensignal, the UK is not in the top 15 countries when it comes to 5G performance and user experience.
Part of 5G’s real potential lies in better performance and content-rich experiences in densely populated areas, the type of service you can achieve with targeted, smaller-scale coverage and mid-band spectrum.
Sports stadia, airports and other congested areas would benefit hugely from such deployment, while consumers would see a real difference in mobile performance. Operators need to deliberately consider the places where people use mobile broadband and focus on delivering real step-change 5G experiences in those locations.
Converting customers and reaping the rewards
Operators in leading markets show the way forward. For example, SK Telecom in South Korea has a growing portfolio of immersive 5G services and platforms, notably its metaverse platform, ‘ifland’. The first month after its launch, the download rate doubled and its active users increased by over 24 percent.
Leading operators from across various markets that offer differentiated 5G experience and valued services see a rise in customer loyalty. They enjoy an NPS on average 4.9 points higher compared to competitors, a much higher rating for brand quality (32 percent more) and are three times more likely to retain their subscribers.
They also benefit from a notable commercial bump, driving significant ROI. Operators offering strong 5G performance and services are twice as likely to grow ARPU and mobile service revenues through a smart blend of pricing innovation and bundling of 5G services. Our research shows that while consumers aren’t willing to pay a premium for just speed and connectivity, they will pay up to 20 percent more if innovative 5G services are offered as an add-on.
Until UK operators launch similar rich, enhanced applications and services that can really showcase the technology’s true power, why should consumers switch from 4G?
Enabling and promoting step change 5G
We have to be clear that if we fail to turn the tide on consumer interest in 5G quickly, we are going to miss out on the biggest benefits of the technology. More customers will be lost during the cost-of-living crisis, investment in the sector will dwindle, and 5G innovation will occur outside of the UK.
However, there is also a fantastic opportunity – the consumer demand for the ‘promise of 5G’ remains strong, and the UK market is primed for a step-change 5G experience with feature-rich services and applications. The operator(s) that can deliver and market it will emerge as the true winners of this mobile generation.
For insights on how leaders in other countries have achieved increased customer loyalty and ROI from 5G, along with detailed insights on what matters most to consumers, visit Ericsson’s ConsumerLab.