5G Revolution: One in Four AI Users Ready to Pay 35% Premium for Superior Connectivity
Stockholm, Tuesday, 26 November 2024.
In a groundbreaking shift in consumer behavior, Ericsson’s latest mobility report reveals that 25% of AI application users are willing to pay significantly more for guaranteed high-performance 5G connectivity. This trend, driven by the explosive growth in generative AI applications, is expected to create a potential 5-12% revenue uplift for telecom providers by 2030, as smartphone AI app usage is projected to increase 2.5-fold in the next five years.
The Growing Demand for Differentiated Connectivity
The Ericsson ConsumerLab report highlights a significant shift toward differentiated connectivity, with 35% of 5G users indicating a willingness to pay more for guaranteed, high-quality service. This trend is largely fueled by the increasing reliance on generative AI applications, which demand robust network performance. As AI becomes integral to daily life, users are prioritizing connectivity that ensures uninterrupted and reliable service for critical applications, such as AI-driven tasks[1].
Performance-Based Business Models: A New Revenue Stream
Telecom providers are poised to benefit from this shift through the adoption of performance-based business models. By leveraging network slicing and APIs, providers can offer customized connectivity solutions that cater to the specific needs of different consumer segments. This approach not only enhances user experience but also presents a lucrative opportunity for increasing average revenue per user (ARPU) by 5-12% by 2030[2].
Implications of 5G Expansion on the Telecommunications Industry
The expansion of 5G networks is set to revolutionize the telecommunications landscape. With projections indicating that 5G networks will handle approximately 80% of total mobile data traffic by 2030, up from 34% in 2024, the emphasis on performance-based connectivity is expected to grow. This shift not only reflects the technological advancements in the industry but also aligns with consumer demand for high-speed, reliable service[3].
Expert Insights and Future Outlook
Fredrik Jejdling, Executive Vice President at Ericsson, underscores the importance of service differentiation in the evolving telecom industry. He asserts that performance-based opportunities are crucial for providers looking to capitalize on the growing demand for enhanced connectivity. As the first 6G deployments are anticipated by 2030, building on the capabilities of 5G, the industry is on the brink of a new era of connectivity that promises to meet the increasing expectations of both consumers and businesses[4].