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ERICSSON

CONSUMERLAB

Towards a 5G
consumer future
Six calls to action from consumers for
operators to rethink mobile broadband

An Ericsson Consumer and Industry Insight Report
January 2018 ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  1

App Annie’s Android are used. Japan.1 billion people. Germany.Contents 3 Expectations for a 5G Methodology The voice of the consumer consumer future In July 2017. Egypt. and Android smartphone users aged including the way they act and 6 Offer us a sense of unlimited between 15 and 65 took part in the think about ICT products and survey.ericsson. To be close to the market and of real-world users. All reports can be found at: www. Indonesia. Ericsson ConsumerLab. The views expressed in the services. Ericsson ConsumerLab 8 Treat gigabytes as currency survey are representative of 800 million provides unique insights on smartphone users across Argentina.000 individuals each year. France. analyzed and statistically representing the benchmarked mobile broadband views of 1. South Korea. analysts in all regions where Ericsson is present. market and consumer trends. Ireland. and hundreds of hours are data on smartphone data consumption spent with consumers from different is derived from a large global panel cultures. Finland. the UK and the US. 10 Offer us more than just data buckets Brazil. Ericsson ConsumerLab gains its 12 Give us more with 5G Mexico.com/consumerlab Finland UK Ireland Germany South Korea France US Egypt China Japan Mexico Indonesia Brazil Argentina 2  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . developing a thorough global understanding of the ICT market and business models.000 iPhone people’s behaviors and values.000 smartphone users Ericsson ConsumerLab has more 4 Provide us with an effortless in 14 countries participated in an than 20 years’ experience of studying buying experience online survey. 1. combined with consumers. knowledge through a global consumer research program based on interviews 15 Keep networks real for us In addition to the survey. Ericsson ConsumerLab has additional proprietary data sets. A total of 14. strategies of operators globally. China. Data from App Annie has also been used Both quantitative and qualitative methods for this report. with 100. together in more than 40 countries – with Tefficient.

a 5G future ultimately depends on consumer and business expectations.Expectations for a 5G consumer future The promise of 5G has the potential to completely change the way we interact with wireless devices. Give us more with 5G 6. Offer us more than 5. most mobile broadband plans online. 44 percent are in fact willing to is not influenced by marketing claims bundled video content within mobile pay for 5G. Over one-third expect but rather their direct experience plans and innovative data plan features capabilities beyond speed. However.5TB over misalignment between what users While unlimited plans are easier to buy their lifetime. their unique needs. Provide us with an effortless 2. best network. services or each 5G-connected device. However. or as much as 1. Consumers predict an end expect operators to steer clear of operators to innovate. 70 percent of those unused data to others. Treat gigabytes as currency buying experience With 6 in 10 smartphone users Eighty percent of smartphone users The average smartphone user globally is grappling with the complexity of mobile are not necessarily looking for limitless left with unused. evolve and to paying by gigabytes consumed baseless marketing slogans and instead personalize a data plan based on and instead paying a single fee for 5G focus on real network experience. 31GB a year. only 4 percent trust increasingly play a role in consumers’ and low prices. Though the unknowns are many and there are still technical issues to be resolved. there is considerable plans but rather a sense of unlimited. This report uncovers six calls to action from consumers which operators must act on. 4. to drive consumer satisfaction and monetize mobile broadband for a 5G future. coverage with the network. Thus. and half envision using operators’ own advertising and network choice of plan and eventually mobile 5G-enriched services within two years performance reporting. ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  3 . However. Offer us a sense of unlimited 3. Two in five users consider buy and what they use. simple nor effortless. this perception considered more important. This is them today. Higher mobile broadband of 5G services appeals to 76 percent driven more by their perception of the speeds and fair wireless contracts are of smartphone users in our survey. high mobile data usage is not to be able to save. Consumers’ six calls to action 1. from smartphones to cars. Consumers want of launch. Given that only and offer peace of mind by avoiding bill gigabytes as actual currency and expect 3 in 10 smartphone users are satisfied shocks. paid-for mobile data of data plans. Consumers service provider. the buying such plans are not the heaviest users today cannot use mobile data digital telecom experience is neither mobile data users. Keep networks real for us just data buckets Consumers buy data buckets because Contrary to the belief that consumers Consumers want their operator to that is how telecom operators sell are uninterested in 5G. as currency. it is imperative to understand whether the vision set out by current wireless technologies and telecom operators’ offerings – specifically mobile broadband plans – meets consumer expectations today. trade or even gift this with the way their operator presents the main motivation. globally the idea have the best wireless network.

Germany. Mexico. campaigns and introductory promotions compound this. Finland. buy and what they use. A lack of Half of all across 14 countries satisfied that their operator presents mobile broadband recommendations. South Korea.Provide us with an effortless buying experience The telecom market is extremely difficult for consumers to navigate. China. Ireland. Towards a 5G Consumer Future. users globally) to buy smaller monthly data allowances than they require. Only one-third Figure 1: The complexity in telecom (percent of smartphone users who agree with the following statements) It is complicated to understand what Navigating through and finding the best It is difficult to keep up with frequent price changes. insight or support during the buying process causes smartphone users plans simply and transparently. Brazil. France. With just 3 in 10 users use their entire mobile data allowance. A similar proportion says that wading through all the options for the best plan is confusing. 2018 4  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . This often leads experience data plan distress and limit plan’s data allowance and 7 in 10 users to the consumer experiencing data plan their mobile broadband usage due to are unsure how much mobile data they distress on approaching their allowance the fear of being hit by overage fees. a quarter of heavy data users (who operators must work hard to help represent 14 percent of all smartphone consumers navigate this mobile maze. Operators’ frequent price changes. the rest either exceed or have unused data by the end of the month. Japan. half of all up to 60 percent of light data users buy Globally. the UK and the US Source: Ericsson ConsumerLab. on average. half of all smartphone misalignment between what consumers users globally experience this. 57 percent of smartphone users find it complicated to understand what is included in mobile data plans. Indonesia. Egypt. is included in mobile data plans plan among all the options is confusing price campaigns. introductory prices and discounts 79% 78% 74% 75% 74% 73% 73% 73% 72% 71% 69% 68% 69% 69% 74% 71% 72% 69% 63% 62% 67% 67% 70% 59% 64% 64% 63% 67% 59% 59% 57% 58% 57% 57% 54% 54% 53% 54% 54% 49% 46% 45% Total Japan Argentina Brazil China Indonesia Ireland France South Finland Mexico Germany UK US Korea Base: Smartphone users aged 15–65 across Argentina. half of all smartphone users smartphone users are unaware of their more than they require. while Given this complexity. consume monthly. This results in a gross limits.

consumers want effortless digital data plans chatbots simplicity from providers. Finland. among those smartphone 35 users who switched operators in the past six months. Mexico. The lack of communication around data 40 being consumed by advertising. The operator challenge is to simplify the purchase process. the UK and the US with operators’ ability to present plans Source: Ericsson ConsumerLab. and a similar proportion (30 percent) are satisfied with their ability to assist them in the online buying process with recommendations via chatbots. users globally say they are satisfied France. while 6 in 10 expect operators to act on this. only one-third (37 percent) of smartphone Base: All smartphone users aged 15–65 across Argentina. Today this experience is neither effortless nor simple. (percent of smartphone users globally who say they are satisfied Anywhere from 18 to 79 percent of the with their operator) monthly data bucket can go towards delivering advertising.businessinsider. Japan.cms ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  5 . South Korea. 25 Simple and Data plans Intelligent online Simple Digital tools to Immediate Real-time With the research and buying process transparent that offer recommendations online customize and help and insight on for most consumers now starting ways to peace based on usage buying design plans guidance usage explain of mind experience using virtual online. March 2016 www. Indonesia.1 Our survey Global average suggests that 70 percent of smartphone users globally are unaware of mobile ads 50 eating up data allowances but. 2 in 10 among them 30 switched because of plan misalignment.in/Ads-on-news-sites-gobble-up-as-much-as-79-of-users-mobile-data/articleshow/51435661. Ireland. Towards a 5G Consumer Future. However. China. Globally. However. 1 Enders Analysis. Egypt. when made aware. 2018 in a simplified and transparent way. 70% 70 percent of smartphone users globally are unaware of mobile ads eating up data allowances. are costing telecom operators consumer loyalty. as well as data plan distress. demands and expectations. bring about greater transparency regarding usage and meet consumers’ evolving needs. Brazil. 6 in 10 expect operators to give them more control over whether to 45 see these ads and be transparent about data consumed by mobile advertising. Germany. they either exceeded their allowance and were charged an overage fee or had unused data left over.One possible hidden drain on mobile Figure 2: Telecom operators fall short on digital customer experience data allowances is mobile advertising. half switched to a new data plan.

this advantage is marginal. with Overall.2 This varies. by a lowered quality of limits. while 45 percent would prefer internet speeds. transparently.5GB of double their existing data allowance. others. July 2017 2 Note: App Annie panel data not available for Finland 6  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . Twelve percent on tethering or reducing speeds and use the most mobile data. only 44 percent of unlimited mobile data plan users globally are very Hence. Average just want the flexibility to change deprioritization of traffic after reaching cellular consumption across unlimited data allowances on their contracts the fair usage policy limits (depending data plan users in all countries surveyed each month based on their usage. However. imposing restrictions buying such plans do not necessarily the monthly data limit. globally still used 2. smartphone users are not necessarily looking for limitless data satisfied that plans are communicated simply and plans but rather a sense of unlimited. a large majority (80 percent) South Koreans using 18GB per month. 70 percent of users music apps not to be counted towards video streaming. today on capped data plans. Some are restricted by to reduce the fear of receiving penalties any time. For most users plans with fixed allowances. of smartphone users are willing to while those in Germany use just 2. unlimited data plans ease consumers’ Despite having the capability to use as much cellular data with such decision making since it takes away the need to plans. as seen in the US. One-third One possible reason for this is that Consumers’ primary motivation to buy (32 percent) want to save unused mobile unlimited plans also have certain unlimited plans is for peace of mind and data in a data vault that could be used at limitations. analysis of data consumption across unlimited data plan users in the App Annie panel. monthly mobile data. accept the features of a sense of unlimited data plan.5 times more Wi-Fi compared to cellular data.5GB. (except for Finland) was 7. or on plan details). saving unused data to be used later is as good as access to unlimited data. most users on unlimited plans decide what data bucket volume to buy. However. Ericsson ConsumerLab. video or Finland. as has been seen in when exceeding their data allowance data consumed by social. versus 34 percent on mobile data so that they feel they have enough data to cater to their needs.Offer us a sense of unlimited In theory.

would consider giving up contrast. mobile data to cater to users’ needs so they do not feel concerned is the key to satisfaction. China. 2018 65% Those already on unlimited data plans Recent findings released by other firms are not averse to changing to a sense show that people on unlimited plans of unlimited either. Indonesia. unlimited. including 65 percent of users of their operator’s network quality. South Korea.jdpower.com/press-releases/us-wireless-network-quality-performance-study-volume-2 3 ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  7 . offering a sense of unlimited to unlimited and capped data plan users plan users are willing to consider consumers encourages mobile data and found that users on large enough giving up their unlimited plans if usage and helps operators to monetize capped plans were equally happy with offered a plan which provides a mobile broadband efficiently. Germany.3 In in the US. about 7 in 10 such have a much more positive perception users. Brazil.Figure 3: Preferred data plan features that offer a sense of unlimited to smartphone users 32% 23% 15% 12% 12% 7% Unlimited music Ability to adjust data Get a bigger bucket Unlimited streaming Unlimited usage Save unused data streaming without allowances each month at a marginally of video without using of social networking in a data vault using data allowance based on usage higher price data allowance apps without using data allowance Base: All smartphone users aged 15–65 with capped data plans across Argentina. Ireland. not necessarily to evolve. Finland. Towards a 5G Consumer Future. Mexico. the UK and the US Source: Ericsson ConsumerLab. Moving towards gauged perceptions among both 65 percent of US unlimited data 5G. plan is not yet extinct. our survey in 14 countries their unlimited plans. It would seem sense of unlimited. it just needs that having enough. The bucket network performance. France. Japan. www. Egypt.

8  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE .7 times to offer super-sized plans. data allowance unused by the end of as 1GB add-ons. smartphone users consume most of As awareness around this grows there is an emerging perception among their allocated data limit. or 1. Within the Although approximately 1 in 2 Figure 4 suggests that. 2. This figure of course varies.7 times more it can be used in different ways like real mobile data they never use. a smartphone user each month. 31GB of mobile smartphone users with capped data smartphone users with capped data data costs consumers anywhere plans are always concerned about plans are left with 40 percent of their between USD 44 and 463. paid-for data of about the end of the month than those who give as a gift. This equates smartphone users with unused data by money. or binge watch 6 seasons of a TV show like Game of Thrones.Treat gigabytes as currency As consumers become increasingly aware of over an average lifetime if conditions do not change. while 41 percent consume in France. 2. them. 14 countries studied. on average only 15 percent exceed the month. two in five believe In other words. most users pay for Globally there are 2. if purchased exceeding their data allowance limit. to save. trade or to unused. demand to treat these gigabytes could make 65 hours of video calls. spend 517 hours streaming music as currency is growing. in countries than those who exceed their data limits. it is leading more smartphone users with unused to unused data allowances of over mobile data by the end of the month 62 percent. for example.5TB exceed their allowances.6GB a month. Meanwhile. To put this into context. where unlimited data plans significantly less than they have from some operators are pushing others purchased. on average. 31GB a year. On average. like Mexico. Brazil and Indonesia.7 times consumers to treat gigabytes as a currency. the amount of unused data they are left with with 31GB of data. with less than 25 percent left by the end of the month. This translates to 2.

consumers are less likely paid for.6 8 10 12 14 16 Mobile data purchased per month (GB) Base: Smartphone users on plans with data caps in App Annie panel reporting mobile data usage in July 2017 Source: Ericsson ConsumerLab. only 19 percent of smartphone users globally in our survey data plans rolling over unused data to the next have rollover of unused mobile data in month. 40 percent of those a consumer must do if they switch If this continues. 2018 ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  9 . enough to stream a refund or discount on their next bill for data will be hard to leave behind – which 6 seasons of Game of Thrones. Figure 4: Mobile data purchased vs. Thirty-nine percent would like pool is loyalty. a user could who would like this would pay a one-off providers. be able to keep data allowances once for but unused over a lifetime. operators have not addressed Super-sized smartphone users with unused data would like to save it for future use by this desire properly.6 2 US Japan Germany Argentina Brazil Indonesia 1 Mexico Egypt South Korea 0 0 2 4 6 6. Towards a 5G Consumer Future. 44 percent are even willing to their plans. The reward for offering the Super-sized data plans equate to pay extra to add such a feature to their ability to roll over data or to build a data 31GB of unused data over a year per data plan. despite consumers’ huge interest and readiness to pay extra. Seventy-six percent of Nevertheless. data not consumed. Consumers want to treat unused gigabytes as they would their extra money.5TB of mobile data paid fee for such a facility month to month. unused per month by a smartphone user 10 >50% unused France 9 8 Mobile data that is left unused per month (GB) 30–50% unused 7 6 Ireland 5 4 UK China <30% unused 3 Globally 2. A savings account full of smartphone user. Interestingly. to share their unused mobile data with family members or friends. It is also considered fair to have 1.

Mexico. Towards a 5G Consumer Future. Despite this. 5% having one-third of relative importance. Video-centric 3. using data allowance Unlimited video streaming Amount of SMS and Use your mobile phone consumer preferences are minutes included in standard definition quality without using data allowance as a Wi-Fi hotspot for individualization. About one-third of additional relative impact is then contributed by a long tail of features considered important Base: All smartphone users aged 15–65 across Argentina. 3% 2% 3% The survey assessed the relative 3% importance of 15 features by consumers 3% that might drive their choice of a 4% 31% particular mobile data plan. the UK and the US segment as well as country. Finland. 4% Mobile internet speeds are considered most important in data plan selection. Indonesia.Offer us more than just data buckets Despite the recent trend Figure 5: Relative importance of features when selecting a new mobile data plan of waiving data usage for Rollover of unused No penalty for exceeding certain apps or services Highest internet speeds data to next month mobile data allowance (zero-rating) and unlimited Unlimited usage of social networking apps without No binding contract Free subscription for video on-demand services included plan wars across countries. as shown in Figure 5. Brazil. Source: Ericsson ConsumerLab. by consumers. 4. 5. Social media. Ireland. The ability 11% to treat gigabytes as currency using 7% rollover of unused data allowances is the next most important feature. Power users 2. Browser. 2018 Smartphone users can be segmented into six different groups based on the types of apps and services they use on their phones and how often they use them: 1. Japan. These features could be used by telecom 4% operators or are being used to evolve current data plans. which varies by consumer France. Germany. China. Egypt. and Freedom to adjust data plan Ability to add more devices to Share data with family/device the plan without paying any choosing the products up and down each month additional charges per device from one data bucket Unlimited streaming and services they want on just one video app in Free subscription for premium Free access to mobile operator TV/video service HD quality without using music service included most at the time and data allowance included in the plan location they need most. Light data users centric users centric users users users Use wide range Stream videos Access social Browse the Weekly users of Browse the of apps and on for over three media apps internet at least utility applications internet only on average consume hours a day and instant weekly and rely such as banking a weekly basis two times more messaging apps less on apps for and mobile or less often mobile data than at least 10–20 internet access payments light users times a day 10  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . followed 7% 9% by contract fairness in the form of no overage penalties or binding wireless contracts. South Korea. Utility 6. most operators continue 5% to sell plans by volume and do not differentiate on speed tiers.

Base: All smartphone users aged 15–65 across Argentina. in addition to unlimited video streaming capability. on the other hand.5 times more likely than other preferred in a mobile data plan smartphone users to value unlimited video streaming capability. As consumers’ No penalty Monthly on exceeding appetite for mobile video grows. prefer plans Free video quality video subscription that help avoid overage fees when Power users exceeding data allowances and plans Video-centric users Unlimited SD that have the flexibility to change data Free music quality video allowances month on month. ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  11 . known Bucket innovation as mobile–video service convergence. centric users from operator Free SN included Possibility to Utility-centric users add devices Considering the diversity of users’ Quality Flexibility needs. Brazil. Ireland. Video-centric users are two times more likely to look Segment of smartphone users Features preferred in data plan for bundled inclusive video content. operators need to innovate Internet speed Wi-Fi hotspot Browser-centric users Share data beyond just offering data buckets and instead consider how mobile broadband Light data users plans work for specific users and in the Adjust plan Amount of SMS No binding up and down context of the devices and services they and minutes connect to the network. Germany. Indonesia. France. Japan. South Korea. 2018 2X Video-centric users are two times more likely to value inclusive video content as well as the ability to stream video without using data allowances when selecting data plans. Mexico. TV/video voice minutes and no binding contracts. while light subscription data users prefer plans with bundled Social media. Towards a 5G Consumer Future. China.As shown in Figure 6. Finland. such as subscriptions to popular video Mobile–video service convergence on-demand services like Netflix and HBO. the UK and the US Source: Ericsson ConsumerLab. rollover operators could differentiate plans by combining the benefits of a data plan that provides a sense of unlimited with bundled inclusive video content. Browser-centric Unlimited HD users. Egypt. power users Figure 6: Smartphone user segments and features are 2. This would particularly appeal to power and video-centric users.

Mexico. One in 10 are even 5G to fulfill these first.4 which the Ericsson creating huge expectations. 8K) without delay or buffering 4% years away. This is because predictors of their own future behavior. such as better battery life. Indonesia. and to others. highest reliability. challenges for operators to deliver on. Ireland. China. July 2017 12  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . Figure 7: Top expectations among smartphone users from 5G Should be many times 26% faster than 3G/4G Should have speed better 13% than Wi-Fi networks Better outdoor and indoor 13% network coverage Will provide less 13% One-third of expensive price plans Better reliability when 10% compared with 3G/4G Better responsiveness and no delays to content Should enable better 4% smartphone users 5% battery life on devices Enhanced security 6% for personal data Despite the technology being a few Enable highest quality video streaming (4K. Germany. while in the with the promise of 5G while creating 52 percent of surveyed executives from US this is 44 percent. aware of its possibilities. the UK and the US Source: Ericsson ConsumerLab. 2018 4 Ericsson. one-third of smartphone users (35 percent) globally expect 5G Guaranteed quality of experience 4% to deliver beyond speed. over one-third of global smartphone in 5G services. align industry segments and businesses. coverage and low prices for mobile broadband. improvements from 5G. suggesting that consumers consumer expectations over what is say they have some knowledge about expect any technology including going to happen with 5G going forward. Egypt. 2% appliance or device at home 0 5 10 15 20 25 30 Base: All smartphone users aged 15–65 across Argentina. the survey also looked at use.Give us more with 5G Contrary to the belief that consumers are uninterested Despite 5G being a few years away still. coverage Ability to connect almost any and low data prices. with 75 percent but also the Internet of Things. our survey has found that the idea of 5G users (35 percent) already expect appeals to 76 percent of smartphone users globally. Expectations from 5G comfortable explaining 5G’s possibilities guaranteed quality of experience. 5G awareness is highest in the ability to connect not only devices Despite opportunities in specialized countries like China. operators mentioned that 5G planning will be focused on consumers in a recent 5G and its promises are already A vision of the 5G future 5G readiness report. globally 4 in 10 smartphone users met. globally only half of all smartphone Rather than just focusing on the Even though there are many unknowns users say that their current network question “What are you going to do and variables to resolve before 5G’s performance expectations have been with 5G?”. Brazil. capabilities beyond speed. Most ConsumerLab survey corroborates and consumers expect speed and coverage Consumers are not always accurate which cannot be ignored. Towards a 5G Consumer Future. Finland. France. South Korea. its possibilities. These improvements. Japan. 5G Readiness Survey.

They also predict that the ability to download gigabytes in seconds. Indonesia. will go mainstream within one to two years of 5G’s launch. future. South Korea. most consumers An end to paying with gigabytes A whole new class of devices will be predicted that the majority of needed to leverage 5G capabilities 5G-enriched services will go mainstream Half of all smartphone users state according to 6 in 10 smartphone users. enabled by 5G. France. As seen in of 5G to address mobile broadband Figure 9. In contrast. Egypt. Mexico. 2018 As shown in Figure 8. Finland. new services. Towards a 5G Consumer Future. Ireland. China. consumers envision services such as 3D hologram calling. that 5G will change the way they think while an equal proportion believe that Globally. within three to four years of 5G’s launch. smartphones increases. watching live events from multiple points of view in an arena utilizing live camera streams. and things that single fee for each 5G service or device are impossible today. the UK and the US Source: Ericsson ConsumerLab. Japan. Consumers expect the first phase attached to a 5G network. 57 percent wish to instead pay a new apps. Germany.Figure 8: Consumers predict most services may go mainstream within three to four years of 5G launch Note: Bubble size = willingness to pay High Real-time Gigabytes in translation seconds Virtual tactile VR cinema Consumer interest levels 5G early shopping alarm system Real-time AR Self-driving for vehicles technology Athlete and Average arena view Home sensor service Drone delivery 3D hologram Connected Live immersive calling robot gaming Low Within a year Within 1–2 years Within 3–4 years Within 5–6 years Timeline for services to go mainstream Base: Smartphone users aged 15–65 with interest in 5G services across Argentina. ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  13 . those aware of 5G’s potential needs as the demand for data on have the strongest opinion on this. 76 percent of smartphone about monthly mobile broadband bills 5G would need an iconic device like users showed interest in 5G-enabled today. Consumers envision an end to the iPhone to drive consumer adoption. it is expected that this would happen in the US and UK within a year of launch. Brazil. or even watching in virtual reality also generated above-average consumer interest and were expected to go mainstream within two years of 5G’s launch. self-driving cars and connected robots to be a more distant 5G future. Earphones giving real-time language translation. services and 44 percent among them paying per gigabyte consumed in a 5G Consumers also expect 5G to enable are willing to pay for them.

countries China Very familiar such as Argentina and Mexico see 5G as a way to cover up shortcomings from existing wireless technologies around speed and coverage and aspire to take up 5G as soon as it is launched. China. Despite 5G’s unknowns. Mexico. and the US lead the way in consumer 2.5 years post-launch. On average. intention to take up 5G Smartphone users who are aware of 5G envision using 5G-enriched services On average in most countries Based on consumer awareness within two years of launch. A shift towards service-based pricing or 1. Source: Ericsson ConsumerLab. 2018 14  ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE . Brazil. 2018 Timeline to adoption Figure 10: Consumer awareness vs. 68 percent of smartphone users in Latin America see themselves Awareness of 5G US taking up 5G within 2 years of launch. Towards a 5G Consumer Future.5 2 2. however. Only UK Brazil 39 percent expect to take up 5G within Mexico Germany France Egypt 2 years of launch. Finnish consumers are Ireland Finland particularly pragmatic and expect to take Japan Basic knowledge it up after 3 years of it being available.5 3 3. Argentina The challenge for operators preparing for 5G is to keep up with the high expectations of early adopters. Finland. China and the US varies from country to country. the UK and the US Source: Ericsson ConsumerLab. Indonesia.5 perhaps creating a sense of unlimited could be a savvy move by carriers. Germany. Egypt.Figure 9: Awareness and preferred payment option for 5G connectivity (percent of smartphone users) 35 Pay for exact amount 31% of gigabytes consumed 30 Buy fixed volume of data 26% 24% Pay a flat fee for each device connected to a 25 23% 5G network rather than data consumed 21% 20% Pay for a service and not 20 data consumed 17% 16% 15% Not sure/can’t say 15 10 7% 5 0 Very familiar Just heard of term Base: Smartphone users aged 15–65 who are aware or have only heard of the term “5G” across Argentina. When do you see yourself using 5G post-launch? (years) as the transition to 5G ultimately will not involve consumers paying per gigabyte but rather an Base: All smartphone users aged 15–65 who are aware of 5G possibilities unlimited future. Japan. awareness and the intention to adopt 5G. Towards a 5G Consumer Future. Ireland. South Korea. users would rather Indonesia Korea wait for the technology to mature. France. This is much higher than the global average of 53 percent. this consumers who are aware of 5G and interest. South on the other hand. In Europe. China see themselves using it in around might lead 5G adoption.

Figure 11: Most credible source of information which convinces consumers that an operator has the best network performance 46% Only 4 percent find operators’ own advertising and reporting on network performance to be credible and convincing. average about 5 percent higher in However. Mexico. many networks more honest in their marketing. China. Finland.5 Those operators perceived as offering on average. only operator compared to others. reports. A 2016 their operator’s network performance 17% Ericsson ConsumerLab study suggested as the best in the country. in terms of aspects like the experience This is reflected in operators’ financial of streaming YouTube on the network. rather than solely using Consumers who perceive their operator H1 2017 compared to operators operators’ marketing messages or to provide the best network in the rated second best. However. communicate network performance 17 percent more per month on services. France. Brazil. Indonesia. performance in the country spend. On average. 2018 Ericsson ConsumerLab. on average.6 claims to determine what network they country are loyal and far more likely consider “best”. Experience Shapes Customer Loyalty study. about 7 in 10 of those who operators to steer clear of baseless believe their operator provides the best marketing slogans and instead to focus One way to explain this is the network also believe they provide the on network experience. the UK and the US Source: Ericsson ConsumerLab. Consumers are calling on and network quality test results. Users that consumers expect operators to who believe this spend. Japan. they base this choice to recommend it. 5G even before 5G networks are widely 4 percent trust operators’ advertising available. for 46 percent Score is 48 points higher and they are smartphone users are concerned that this is ascertained through their direct 1. Ericsson and Tefficient analysis or the time taken to upload content on looked at the earnings before interest.7 times less likely to switch to another 4G connectivity will be marketed as experience with a network. Egypt.Keep networks real for us Real everyday experience with mobile operator networks builds consumer perceptions and expectations. Ireland. 17 percent more per the best network in their own country month on mobile broadband access. 17% 8% 7% 7% 6% 4% 4% 2% Own Family/friend Speed Third-party Government body/ Experts’ Operator’s own Ads/marketing Celebrity/ experience recommendations tests reports regulator reports advice reports and claims around operator public figure and advice network endorsements Base: All smartphone users aged 15–65 across Argentina. thus keeping lack of differentiation reported by best value for money. Indeed. network quality. depreciation and amortization operator provides the best network used by consumers to judge the (EBITDA) margins of global operators. consumers when operators market consumers will pay more if they perceive network performance. Towards a 5G Consumer Future. Their Net Promoter Moving into a 5G future. three in five on their own perceptions. Consumers who believe their social apps which are mental indices taxes. Germany. 2016 5 Tested across all 14 countries except Ireland (no access to Irish operators’ EBITDA margin figures in H1 2017) 6 ERICSSON CONSUMERLAB TOWARDS A 5G CONSUMER FUTURE  15 . South Korea. Consumers expect their operator to The value of best network perception reported an EBITDA margin on have the best network in the country.

ericsson.com Ericsson SE-164 80 Stockholm. Read more on www.5 billion). Our organization consists of more than 111. Sweden Telephone +46 10 719 0000 GFTB-18:000048 Uen www. Sweden.6 billion (USD 24.com © Ericsson AB 2018 .000 experts who provide customers in 180 countries with innovative solutions and services. Together we are building a more connected future where anyone and any industry is empowered to reach their full potential. The Ericsson stock is listed on Nasdaq Stockholm and on NASDAQ in New York.ericsson.Ericsson is a world leader in communications technology and services with headquarters in Stockholm. Net sales in 2016 were SEK 222.