As issues with app quality persist, many mobile users are growing increasingly dissatisfied with standard “best-effort” 5G network performance, especially when it comes to generative artificial intelligence (Gen AI) applications. Some users are now willing to pay extra for guaranteed performance and improved connectivity.
A recent study by Ericsson reveals that 35% of 5G users would consider paying more for differentiated connectivity that ensures superior performance for critical tasks. This figure is significantly higher in densely populated regions like Thailand, India, and Brazil, where the demand for better connectivity is 1.5 times the global average. The study surveyed over 23,000 smartphone users, including 17,000 5G users from 16 countries, such as the US, UK, South Korea, Singapore, and China.
Ericsson notes that in mobile-first markets, where users heavily rely on mobile connectivity, the demand for enhanced connectivity is driven by the need for improved capacity rather than general network inadequacies. The company estimates that the market potential for differentiated 5G connectivity is approximately 35% of users across these global markets. However, to capture this demand, service providers will need to adopt segmentation strategies that cater to key consumer groups willing to pay for enhanced connectivity and specific services.
The study also found that 5G users are more inclined to pay premiums for connectivity that supports core services like video calls, media streaming, and multiplayer games. Premiums are particularly high for niche services such as cloud gaming and augmented reality (AR) applications. In Singapore, for example, users are most likely to pay more for content creation and uploads, while users in the US are willing to pay more for gaming and Gen AI apps.
Notably, 25% of Gen AI users already expect guaranteed performance, such as real-time responses, and are willing to pay up to 35% more for such services. As Gen AI features become more integrated into popular apps like TikTok and Snapchat, and as new apps for image and video enhancement emerge, mobile traffic is expected to rise significantly.
Ericsson predicts that Gen AI will see a substantial increase in usage over the next five years, with 65% of smartphone users engaging with AI-powered applications on a weekly basis. This surge in Gen AI use will place additional demands on 5G networks, particularly in terms of uplink speeds and low latency, to ensure a seamless, responsive user experience. The integration of Gen AI into extended reality (XR) devices, such as AR glasses, will further increase the need for reliable mobile networks, especially for uplink traffic.
The rise of AI-driven features on smartphones, like those found in Meta’s Ray-Ban smart glasses, which use multimodal AI, will also contribute to the growing demand for fast and reliable uplink connectivity.
As the demand for Gen AI grows, service providers will need to prepare for shifts in network performance expectations, focusing on managing traffic loads and meeting the need for both low latency and fast data transmission.
App quality issues, particularly in crowded areas, are already pushing users to reject the notion of “best-effort” network performance. Around 40% of users are no longer willing to settle for subpar 5G performance, with 30% reporting inconsistent connectivity underground and 26% experiencing slower speeds indoors. These challenges highlight the urgent need for enhanced mobile connectivity to meet the expectations of today’s mobile-first, AI-powered users.