A new report from technology vendor, Ericsson, has revealed that the growing adoption of Generative Artificial Intelligence (GenAI) is driving a surge in demand for enhanced 5G connectivity across the globe.
While noting that this creates a significant opportunity for telecom operators, Ericsson said 35% of surveyed 5G users expressed an interest in higher-tier services beyond standard 5G performance.
The report reveals a willingness among consumers to pay a premium for “differentiated connectivity,” particularly for performance-sensitive services such as video calls, streaming, and generative AI applications.
Customers ready to pay more for speed
Ericsson’s findings indicate that 5G users are not only expecting better network performance but are also prepared to pay up to 35% more for seamless, performance-assured connectivity.
- It noted that this growing demand represents a potential revenue increase of 5-12% for telecom operators willing to invest in differentiated services that guarantee consistent, high-quality connections.
- Ericsson suggests that by providing these premium connectivity options, service providers can unlock new revenue streams, especially by opening up quality-on-demand APIs to application service providers, creating new avenues for 5G monetization.
“Today, 5G users are looking for performance assurance on core services such as video calls and streaming, while generative artificial intelligence (GenAI) users are going a step further, and are already willing to pay a premium that is 35% higher than these core services.
“This signals a growing demand for enhanced, performance-assured connectivity that goes beyond traditional application expectations,” Ericsson stated in the report.
Network quality
Ericsson noted that network quality has become an integral part of consumers’ daily lives, from morning routines to late-night browsing, and users increasingly expect uninterrupted, high-speed connections.
“Enhanced 5G performance is especially valued in high-traffic areas like stadiums, transport hubs, and shopping centers, where connectivity challenges often arise,” it stated.
- Ericsson’s research added that 42% of 5G users expect improvement in these high-footfall locations.
- The report also emphasized that 5G has made noticeable strides in user satisfaction compared to previous generations of cellular networks.
- Data shows that 38% of 5G users report very high satisfaction with their network experience, a 10 percentage point lead over 4G users, of whom only 28% expressed similar satisfaction.
What you should know
Although three telecommunications companies have launched 5G networks in Nigeria, only two are currently providing the service, which offers higher internet speed compared to 4G.
- MTN Nigeria took the lead by launching the first 5G network in Nigeria in September 2022 and has since expanded the service to more cities in Nigeria.
- Mafab Communications, which acquired the 5G licence at the same time with MTN also announced the launch of its 5G service in January 2023, but has gone quiet after the launch, while its routers or SIMs are not available in the market yet.
- Airtel Nigeria followed suit in May 2023 launching the 3rd 5G network in the country and the company is today pushing the 5G market in Nigeria alongside MTN.
As of September 2024, data from the Nigerian Communications Commission (NCC) indicated that 5G penetration in Nigeria stood at 2.19% while 4G accounted for 44.96% of connectivity in the country.
