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Rising use of Generative AI apps boosts consumer interest in differentiated connectivity
Generative AI applications are emerging as a key area in driving interest in differentiated connectivity - guaranteed uninterrupted high-end connectivity when you need it most - among 5G smartphone users globally, new Ericsson ConsumerLab research has revealed.
Going to a concert these days means expecting to record it on your phone. — Photo courtesy of Ericsson
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With the number of smartphone owners who use Gen AI apps on at least a weekly basis expected to increase 2.5-fold in the next five years, the rapidly growing category joins existing differentiated connectivity use cases such as video calling, streaming and online payments, that smartphone users say they are willing to pay a premium for.
Differentiated connectivity and consumers’ willingness to pay communications service providers (CSPs) for the guaranteed higher performance for essential apps, is the subject of the latest global report from Ericsson ConsumerLab, called Elevating 5G with Differentiated Connectivity.
Almost one-in-four Gen AI users say they are already willing to pay up to 35 per cent more for guaranteed fast and secure connectivity for such high-capacity applications.
The CSP-focused report also addresses revenue generation opportunities for service providers based on the survey research.
Head of ConsumerLab, Ericsson, Jasmeet Sethi, said: “The latest comprehensive Ericsson ConsumerLab research indicates that as AI-powered applications become more prevalent, users’ expectations for enhanced connectivity are rising. This reflects consumers' expectations for AI apps' future capabilities - perhaps relating to image, audio or video generation - and their willingness to pay for those capabilities to perform in a speedy and high-quality way. This signals an opportunity for CSPs globally to meet this demand through tailored connectivity experiences.”
He added that the differentiated connectivity revenue generation potential for CSPs will increase as they transition to performance-based business models, offering tailored subscriptions and plans with assured performance for different consumer segments in the market.
“This shift could drive a 5-12 per cent uplift in 5G Average Revenue Per User (ARPU) as users seek guaranteed reliable performance for specific applications,” he said. “Additionally, there is an opportunity to unlock new revenue pools from the significant demand among 5G users for high-performance apps with one-in-three 5G smartphone users willing to reallocate 10 percent of their current mobile app spend to purchase apps with in-built elevated connectivity. “
President & CEO Ericsson Vietnam Rita Mokbel, said: ”Once the 5G networks in Việt Nam are fully deployed, CSPs in Việt Nam can expose Quality on Demand (QoD) network APIs to developers and can thereby tap into the consumer demand for high performance apps. They can thus enable developers to offer premium, high-performance experiences and unlock new revenue streams in the process. This is one example of network API CSPs can expose.”
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