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Ericsson Says Canadian 5G Users Will Pay More For the Best Experience

Despite the belief that Canadians pay some of the highest prices for wireless services in the world, Ericsson says that 5G users in this country not only desire the best quality experience but are also willing to pay more to get it.

The Ericsson ConsumerLab Report finds that one in five Canadian 5G smartphone users would be willing to pay a premium for a 5G plan that offers elevated network performance when it comes to video streaming, gaming, and other popular apps.

 The report, titled “5G Value: Turning Performance into Value,” demonstrates the business potential for CSPs as consumer satisfaction with 5G rises, with Canada showing a 12% year-over-year increase, fueled by more 5G devices in market, faster network speeds, and an increase in 5G availability.

The research reveals that the factors influencing consumer satisfaction are themselves changing. They are moving primarily from 5G geographical coverage considerations to more application-experience-based metrics such as video streaming quality, mobile gaming/video calling experience, and 5G speed consistency – especially among early 5G adopters.

“Canadian 5G users have high expectations for their service,” says Head of Ericsson ConsumerLab, Jasmeet Singh Sethi. “They’re seeking not just connectivity but rather differentiated connectivity where it matters most like crowded arenas or public indoor locations, the value-added experience that enhances daily activities.

“Our findings,” he continues, “reveal that if these expectations aren’t met, consumers are three times more inclined to switch to a provider that can deliver a superior 5G experience, with 22 per cent of users willing to pay nine per cent more for a service that offers differentiated quality of experience over 5G.”

Jeanette Irekvist, President at Ericsson Canada, adds: “This report is a testament to the quality of service and experience in networks in Canada and the sophistication of Canadian 5G users, including their high expectations of reliability and quality. As 5G adoption speeds up in Canada and globally, it’s important for service providers to expand the capacity and performance requirements, while improving network quality for apps, to meet these ever-growing demands.”

The Ericsson ConsumerLab report revealed four priorities for service providers: 5G network satisfaction drivers are evolving beyond coverage. Post 5G buildout, service providers would benefit from prioritizing network optimizations that cater to high-performing video streaming, gaming, and other popular applications to boost user satisfaction.

5G is reshaping video streaming and augmented reality (AR) usage. On average, Canadian 5G users report a 28% increase in time spent streaming video in HD/4K format per day and a 59% increase in time spent on watching multi-view video streaming compared to 2022. Service providers looking to increase customer engagement should offer innovative service bundles to leverage the rising demand for new video formats and AR, driven by 5G, says Ericsson.

5G performance at key locations influences consumer loyalty. Since the launch of 5G in Canada, a substantial 20% of consumers have changed their service provider, and the primary driving factor behind this shift is 5G network performance. Remarkably, nearly 46% of those who’ve made the switch did so due to the quality of their 5G network. Ericsson says service providers should prioritize enhancing 5G performance in key locations to boost consumer loyalty and minimize churn rates.

5G consumers will pay premiums for differentiated quality of experience as well, the study finds. Forty-one per cent of users demand more data to justify a price increase, and 17% are looking for bundles with innovative services, while 22% expect superior performance and prioritize connectivity. Ericsson’s recommendation is that service providers explore differentiated 5G monetization strategies with speed tiers, content bundles, and QoS-based pricing, leveraging 5G SA capabilities and targeted segmentation.

The comprehensive global research – which reflects the views of an estimated 21 million Canadian consumers, including about 12 million 5G customers – is part of an Ericsson research series which has tracked the evolution of the 5G consumer market since 2019.

More than 37,000 consumers in 28 countries were interviewed during May and June 2023. The research scope is reflective of the opinions of about 1.5 billion consumers, including 650 million 5G users.

You can see the full report 5G Value: Turning performance into Value.