Swedish telecom equipment maker Ericsson said that 5G network superiority will likely emerge as a driver for consumer loyalty in India, with mobile consumers likely to churn switch providers if there is a better 5G network available.
According to a new report from Ericsson ConsumerLab, consumer 5G readiness is high in India. In fact, the intention to upgrade to 5G in urban India is two times higher than their counterparts in markets like the UK and US where 5G has already been launched.
“5G network superiority could emerge as a driver for consumer loyalty with 59% of smartphone users intending to upgrade to 5G in the first 12 months. Within those who plan to upgrade to 5G, 36% plan to churn to the best provider of the 5G network when it is available,” the vendor revealed in its study.
5G handset users want a network to go with it
The study revealed that over 100 million users in India with 5G ready smartphones wish to upgrade to a 5G subscription in 2023, while more than half of them are open to upgrading to a higher data tier plan in the next 12 months.
According to the study, 60% of early adopters who already have a 5G-capable phone expect 5G to bring new innovative applications, which are considered more appealing than better coverage. These users are even willing to pay a 45% premium for a plan bundled with novel experiences, provided their expectations are met.
Over the past two years, India has witnessed a three-fold increase in smartphone users who own a 5G handset.
Reliance Jio and Bharti Airtel will launch their initial commercial 5G services in October targeting high-value customers in metro cities before gradually extending the service to other parts of the country.
Vodafone Idea, which is currently going through a rough financial phase, hasn’t revealed its 5G launch plans despite acquiring spectrum in this year’s auction. Vodafone Idea is expected to lose high-value customers to Jio and Airtel in coming months as they churn to make better use of their 5G handsets.
5G appetite an opportunity to strengthen market positions
”The transition to 5G provides an opportunity for service providers in India to strengthen their position in the consumer market, with a focus on 5G quality and availability. More innovative experiences need to be bundled to meet the expectations of early adopters to successfully monetize 5G,” said Jasmeet Sethi, Head of Ericsson ConsumerLab.
“Even as 5G will provide immersive experiences to urban customers, it will also play an important role in achieving India’s digital inclusion goals, especially in bringing broadband to rural and remote homes,” said Nitin Bansal, Head of Ericsson India
Ericsson recently bagged 5G network deals with both Reliance Jio and Bharti Airtel, and is already helping them deploy their networks.
Bansal added that Ericsson is scaling up its manufacturing facility in Pune to meet 5G demand in India. He said the company is aiming to meet almost 100% of India requirements from its local factory.
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