A PwC 5G survey finds service providers will have to educate consumers and build unique services if they expect potential buyers to pay more for the high-speed wireless technology.
Service providers anxious to recoup the billions of dollars spent on delivering 5G to U.S. consumers will find the majority of potential buyers are unwilling to pay more than they do now for home and mobile internet service.
Only about a third of 1,000 home and mobile internet users surveyed by consultancy PricewaterhouseCoopers was willing to pay extra for the next generation wireless technology. The rest felt their finances were already stretched thin by current communication costs.
Survey respondents willing to pay more were most attracted to 5G's speed, which is significantly higher than current 4G technology. On average, mobile internet users were willing to pay $4.40 more a month while home users were OK with an additional $5.06 a month, the 5G survey, released this week, found.
But most consumers will want more than just speed. Service providers will have to sell them on new services made possible through 5G's higher bandwidth and low latency, said Dan Hays, a principal consultant at PwC.
"Service providers will need to think about this creatively, especially if they are going to be displacing other categories of spending from consumers' wallets," he said.
That creativity will have to include convincing mobile internet users 5G is worth the cost of a new phone. The PwC survey found that only 26% were willing to buy a 5G-enabled smartphone before they were eligible for a phone upgrade through their carriers. Analysts expect carriers to start offering 5G smartphones next year.
What's 5G?
People are unwilling to pay for 5G because many do not know what it is. Less than half of the respondents in the PwC 5G survey could define the technology. "Despite all of the hype about 5G from within the telecom industry, the average consumer still isn't very aware that 5G is coming and, in most cases, even what it is," Hays said.
Despite all of the hype about 5G from within the telecom industry, the average consumer still isn't very aware that 5G is coming and, in most cases, even what it is.
Dan Haysprincipal consultant, PwC
Once briefed on 5G, survey respondents listed reliability as the most important of five must-have features. Inconsistency in service was a significant contributor to overall dissatisfaction with current internet service.
Outside of reliability, home and mobile internet users differed on the next four critical 5G features. For home users, security was number two, followed by speed, cost efficiency and no buffering when watching a video. For mobile users, unlimited data was second, followed by security, cost efficiency and speed.
As researchers expected, younger people were more excited about the advantages of 5G. Almost seven in 10 respondents under 40 said 5G was "very appealing" compared to six in 10 for people older than 40.
Selling 5G to consumers and businesses is critical to companies providing wireless services. The Federal Communications Commission estimates those companies will spend $275 billion over the next decade on 5G infrastructure.
This year, AT&T and Verizon started rolling out 5G internet service in U.S. cities. Both companies plan to continue expanding the service nationwide over several years.
