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Unlocking the value of 5G for consumers

IBM surveyed nearly 12,500 consumers in 21 countries and found that 5G subscriptions are growing faster than expected. The challenge for service providers is to understand and keep up with the high expectations of early adopters.

Rob Van Den DamRob Van Den Dam
12 Jan 2020
Unlocking the value of 5G for consumers

Unlocking the value of 5G for consumers

Though it will take some time for it to hit critical mass, the race to 5G is clearly on. Communications service providers (CSPs) in several markets have gradually switched on 5G and the number of subscriptions is growing faster than expected. In a presentation at TM Forum's Digital Transformation Middle East in Dubai, IBM’s Rob van den Dam will reveal the results of a recent global consumer survey and discuss the 5G services and experiences consumers crave. Early 5G commercial deployments have been driven by enhanced mobile broadband (eMBB) services which have elevated 4G LTE mobile broadband experiences to the next level, primarily connecting consumer smartphones and targeting consumer applications. These services represent an evolutionary approach for CSPs to meet the consumers’ insatiable appetite for faster and better mobile experiences. To better understand consumer interests in 5G, the IBM Institute for Business Value (IBV) surveyed nearly 12,500 consumers in 21 countries, representing 62% of the global population and 77% of global GDP. The objective was to discover the pain points of today’s mobile experiences and assess consumer excitement. Almost two-thirds (64%) of respondents report awareness of 5G as a follow up to 4G/LTE. This ranges from having some idea about 5G to being very familiar with it. Perhaps surprisingly, respondents in many emerging developing countries are more familiar with 5G than in developed countries, with the highest 5G awareness in China (82%). Once educated as to what 5G brings to the table, 81% of respondents surveyed in developing countries and 49 % in developed countries say they are very excited about the technology. Yes, people want the new and improved experiences it promises, particularly in developing countries where the quality of current networks leave much to desire.

Early adopters willing to pay extra, or switch

The challenge for CSPs preparing for 5G is to understand and keep up with the high expectations of early adopters, with 83% of these early adopters stating that it is very to extremely relevant to them. Close to two-thirds say they are willing to pay significantly more for a 5G-enabled smartphone and a 5G data plan, in contrast to the non-early adopters of which less than 30% are prepared to do so. The quality of video streaming is one of the main criteria influencing how satisfied consumers are with provider networks. Four out of five early adopters say that video streaming quality is important for them. However, streaming mobile video on current networks present frustrations for many, particularly with load times, rebuffering, playback, picture quality and synchronization.

More than three quarters of early adopters state they would probably or certainly opt for 5G when it becomes available, and pay extra if it results in a superior video streaming experience. Moreover, 76% say they would probably or certainly switch to another provider if they can get a better-quality mobile video experience.

In the mid- to long-term ultra-high-definition (UHD) video streaming formats such a 4K and 8K, which 5G enables, will become common for videos viewed on mobile devices. It is by far the most relevant 5G application for consumers, selected by 63% of early adopters. Clearly, people are longing for high quality mobile viewing experiences. Companies such as AT&T and the China Media Group are already test-streaming 4K high dynamic range (HDR) video. AT&T, for instance, has tested streaming 4K video at the 2018 US Open golf tournament.

Embracing immersive media

With the performance of 5G technology further improving in terms of speed, latency, throughput and other characteristics, many more transformational applications for consumers will become available. Future 5G-led applications will include immersive media encompassing deeply engaging, multi-sensory, digital experiences. According to Intel, immersive and new media applications will scale significantly by 2028 and are forecast to generate more than $67 billion annually. Indeed, consumers are enthusiastic about innovations in the area of media and entertainment. Nearly half of consumers surveyed indicate they’re excited about more advanced virtual reality (VR) entertainment applications, ranking them second only to UHD video streaming. According to the latest PwC Media and Entertainment Outlook, VR will be the fastest growing media segment for the next five years. Other 5G-led applications consumers are excited about include 3D-video movies (44%), augmented reality (37%) and 360-degree video and 3D holographics (33%).

Gaming and eSports

5G-led innovation will also be important for mobile and VR gaming, as well as for eSports. In particular, incredibly low latency is key to the gaming experience overall, and even more so for eSports. Indeed, 77% of the eSports enthusiasts among those surveyed are very excited about 5G, with 58% willing to pay significantly more for a 5G-enabled mobile device. The importance of 5G makes CSPs a vital component in gaming and eSports ecosystems. South Korean operator KT, for instance, launched its 5G network with an AR “Avenger” game. AT&T announced premium 5G plans for gaming. And, Deutsche Telekom is investing in eSports, intensifying its involvement in the gaming market. The group has acquired a 25% holding in leading eSports business SK Gaming. An increasing number of CSPs are also organizing eSports tournaments. Be sure to join us in Dubai at Digital Transformation Middle East where we will discuss the results of the survey.