The potential of 5G
Given the history of the wireless industry, how do you feel about what 5G is likely to bring to you?
Consumers are intrigued, but will they pay?
Consumers are largely satisfied with their current home and mobile internet services; however, there’s mounting frustration with overall reliability, speed and cost. As a nationwide deployment of 5G draws near, it becomes increasingly important to understand how consumers feel about their existing home and mobile broadband services and what they perceive about this next generation of wireless technology, of which only 46% are familiar.
Doing so will allow companies to make more informed decisions about the network devices, services, and applications that will depend on 5G. Specifically:
We asked 1,000 home and mobile internet users questions in several categories:
Methodology: During September 2018, PwC surveyed a nationally representative sample of 1,000 Americans between the ages of 18-64 who have access to the internet via an online survey conducted by a leading global research firm.
Overall satisfaction with today’s internet services is high, with 92% and 87% of users at least somewhat satisfied with their mobile and home internet services respectively. However, more consumers are “completely satisfied” with their mobile internet (50%) than with their home internet service (38%).
“My home internet is extremely inconsistent. I feel I pay way more than what it’s worth for basic internet. I wouldn’t mind what I pay if my internet consistently worked.”
Compared to one’s home internet, mobile internet seems to hold more value for the money. Reasons for this include:
1 Federal Communications Commission, “International Broadband Data Report,” February 2, 2018.
46% of respondents were familiar with the term “5G” without prompting, with familiarity skewing heavily towards males. Awareness of 5G is also higher in urban vs. rural areas (50% vs. 40%).
“Now that I know about 5G, I’m pretty excited about it and hope that it is as great as it has been built up to be."
Once defined, the idea of 5G technology is appealing to nearly everyone (93-98% across all age segments); 62% of consumers find 5G “very” appealing. Interest peaks among 18-24-year-olds (71% “very appealing”).
Inconsistency is a current pain point for consumers and is largely contributing to overall dissatisfaction: 43% agree that the internet on their mobile device “cuts in and out sometimes/ is not always strong,” while 37% say the same for their home internet, and how it “disconnects for no reason.”
Thus, it’s no surprise that if consumers could change just one thing about their current internet, both in and out of the home, the majority would change its reliability—more so than speed, data and cost.
Reliability is the top consumer “must-have” for internet across the board.
In addition to faster speeds and lower latency, 5G in the home brings with it a host of other benefits, including the possibility of less wires, faster do-it-yourself installation, and portability of the service to bring it to other locations when not at home. But do consumers care?
The business case for 5G isn’t ideal—the rollout and implementation will be costly, and there’s growing concern around small profit margins. But what if internet users are willing to pay more for 5G service?
If 5G delivers on its promise, a third of internet users will pay more for the technology—33% would do so for 5G in the home, while 31% would do the same on mobile.
But how much more would consumers be willing to pay?
Among all surveyed respondents, on average, consumers would be willing to pay an extra $5.06/month for 5G internet service in the home, and an extra $4.40/month for 5G internet on mobile.
Notably, more consumers are willing to pay a premium for 5G in the home than on mobile. As it is, home internet users are less satisfied with their current service, and they feel as though they are already overpaying. What’s a marginal increase in price for a significant improvement in service?
Though reliability is a consumer’s top priority, it’s speed for which consumers will pay an upcharge. Faster internet, both in and out of the home, is the primary reason why consumers said they would be willing to pay more for 5G.
Interestingly, benefits having to do with video specifically hold more weight among mobile internet users. More would pay a premium for 5G if it provided “better quality video” on their mobile device (29% vs. 25% of home internet users) and “decreased buffering while streaming video” (25% vs. 19%).
53% of mobile internet users said they would be willing to make a switch for 5G:
However, being amenable to change does not equal urgency, and most consumers are not in a rush to get the new technology—in a scenario where a new mobile device would be required to access 5G, only 26% said they would rush out to buy one, even if they were not yet eligible for an upgrade.
Willingness to buy a new device right away was highest among young males <40 (36%), African Americans (36%), and consumers who regularly play video games (34%).
Not surprisingly, internet users under the age of 40 hold the most excitement about a future with 5G connectivity. While much of their attitudes and opinions align with the broader population, it’s worth noting where this group falls outside the line.
Younger consumers place more value overall on the internet and what it affords them. Our respondents under the age of 40 were significantly more likely to report a household income of less than $75,000/year, and yet, they were also significantly less concerned with the cost of their internet.
Given the history of the wireless industry, how do you feel about what 5G is likely to bring to you?
What do you wish your current home internet provider knew about your service?
If you could change one thing about your current home internet service, what would it be?
What do you wish your current mobile phone provider knew about your internet service?
If you could change one thing about your current mobile provider regarding the internet, what would it be?
5G doesn’t just promise a faster version of the 4G internet we have now; by some estimates, 5G will spur $1 trillion in global GDP over the next three years. It will change how consumers digest media, purchase products and services, and operate their homes. And in the workplace, 5G underlies immense potential for automation and proliferation of intelligent environments.
Yet as the industry looks to capitalize on 5G’s true potential, there will inevitably be some bumps along the way. The actual deployment of 5G, for one, which involves a costly and time consuming rollout of small cells (of which consumers are accepting if certain needs are met). Other pressing issues include: downward pricing pressure on mobile broadband as the number of provider options grow; the need to define a more streamlined, self-service customer experience; and the need for network operators to capture significant enough return on their investment beyond just access charges. Providers will need to “up their game” in developing new products to monetize more effectively.
For companies to successfully capitalize on 5G in the near term, there are a few key consumer points to keep in mind:
In the near term, incumbent mobile network operators directly responsible for 5G deployment have the most at stake; however, in the long run, the test will be for companies with applications that rely on the internet to deliver products and services. As 5G rolls-out market by market, consumers’ expectations for efficient, reliable and secure interfaces will only escalate, and companies who ignore their exposure to the impact of 5G may be trailing their competitors.
5G refers to the next generation of wireless network technology. Previous wireless network generations include 1G, 2G, 3G, and 4G/ LTE. You might recognize 3G and/or 4G/LTE, which most consumers currently use on their mobile devices. Up until now, these wireless networks have been primarily used by only mobile devices outside of the home when not connected to Wi-Fi.
Like the advances seen in previous generations of technology, 5G is expected to bring significantly faster speeds, shorter delays/ buffering, and improved reliability. However, unlike previous generations of technology, 5G will not only offer mobile capabilities but may also be offered as a potential replacement for your current home internet connection.
Dan Hays
US Technology, Media and Telecommunications Corporate Strategy Leader, PwC's Strategy&, PwC US