Ericsson ConsumerLab highlights rising interest in differentiated connectivity among UAE consumers
22 percent of 5G users are willing to pay 10 percent more for performance assurance on latency- and uplink-sensitive apps.
The report identifies revenue generation opportunities for communication service providers.
A new Ericsson (NASDAQ: ERIC) ConsumerLab report titled 'Elevating 5G with Differentiated Connectivity' has revealed some unique insights and consumer trends related to 5G in the United Arab Emirates (UAE). The report also identifies revenue generation opportunities for communication service providers (CSPs) in the 5G space.
The report identifies four key trends shaping the UAE's 5G landscape:
One in three 5G users in the country are no longer willing to accept best-effort 5G performance. The survey notes that satisfaction with 5G decreased as more than 50 percent of users face issues in high-traffic locations. Therefore, ensuring good 5G coverage in addition to sufficient capacity is essential for differentiated connectivity.
The appetite for differentiated connectivity is growing. 44 percent of 5G users in the UAE are interested in paying for differentiated connectivity that guarantees better performance for critical tasks, and 32 percent are likely to be among its first adopters. Meanwhile, 22 percent of users, known as 'assurance seekers', actively seek elevated connectivity for critical applications and are happy to pay for it. To make the most of this trend, service providers must develop actionable segmentation strategies that identify key consumer groups.
Generative AI (GenAI)is redefining the way people use 5G. The report shows that 22 percent of 5G users are willing to pay 10 percent more for performance assurance on latency and uplink-sensitive apps, such as those featuring GenAI, augmented reality (AR) and video calling, compared to established app categories. As the usage of these apps grows, CSPs must prepare for shifts in network traffic with rising demands on uplink and downlink capacity as well as low latency.
Service providers could see an increase in consumer average revenue per unit (ARPU). Transitioning to differentiated connectivity has the potential to increase 5G consumer ARPU by 5 to 14 percent. CSPs also have the opportunity to unlock new revenue pools by exposing quality-on-demand (QoD) network application programming interfaces (APIs) to application service providers. However, capturing the full potential of differentiated connectivity will require CSPs to explore alternative payment models, as preferred by 24 percent of 5G users.
Petra Schirren, Vice President and Head of Ericsson Gulf at Ericsson Europe, Middle East and Africa, says: 'The latest Ericsson ConsumerLab report highlights a valuable opportunity for growth in the UAE's 5G network landscape. As AI-powered applications become more prevalent, users' expectations for enhanced connectivity are rising, and so is their willingness to pay for performance assurance. We look forward to working with our partners in the country to leverage on the report's insights, drive positive change, and enhance the overall 5G experience for consumers through co-creating tailored connectivity experiences.'
The Ericsson report is based on an online survey of more than 1,100 respondents across the UAE, including 1,000 active 5G users, conducted during June and July 2024. The research scope is reflective of the opinions of over 6 million smartphone owners in the country, including more than 3 million 5G users. The report is part of the comprehensive Ericsson Research series, which has monitored the evolution of the global 5G consumer market since 2019.
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