Rising use of Generative AI apps boosts consumer interest in Differentiated Connectivity
Generative AI applications are becoming increasingly popular among smartphone users around the world, according to new research from Ericsson ConsumerLab. This trend is driving interest in differentiated connectivity, which ensures uninterrupted high-end connectivity, especially for 5G smartphone users.
The research indicates that the number of smartphone owners using Gen AI apps on a weekly basis is expected to grow significantly in the next five years. This growth in the use of Generative AI apps adds to existing differentiated connectivity use cases such as video calling, streaming, and online payments, for which users are willing to pay extra.
Consumer Preferences and Opportunities for CSPs
One in four Gen AI users is already willing to pay up to 35% more for fast and secure connectivity to support high-capacity applications. The latest global report from Ericsson ConsumerLab, titled "Elevating 5G with Differentiated Connectivity," explores consumers' willingness to pay for enhanced performance and the revenue opportunities for communications service providers (CSPs).
According to Head of ConsumerLab at Ericsson, Jasmeet Sethi, consumers' expectations for improved connectivity are on the rise as AI-powered applications become more prevalent. This presents an opportunity for CSPs to offer tailored connectivity experiences to meet the demand for high-quality connectivity for AI apps.
Revenue Generation and Business Models
The report emphasizes the potential for CSPs to increase revenue through performance-based business models that offer assured performance for different consumer segments. This shift towards tailored subscriptions and plans could lead to a 5-12% increase in 5G Average Revenue Per User (ARPU).
There is also an opportunity for CSPs to tap into new revenue streams by catering to the demand for high-performance apps among 5G users. One-third of 5G smartphone users are willing to allocate 10% of their app spending towards apps with enhanced connectivity.
Unlocking Revenue Streams
President & CEO of Ericsson Vietnam, Rita Mokbel, highlights the potential for CSPs in Vietnam to leverage Quality on Demand (QoD) network APIs to meet consumer demands for high-performance apps. By enabling developers to offer premium experiences through these APIs, CSPs can unlock new revenue opportunities in the market.
This collaborative approach between CSPs and developers can drive innovation in the 5G ecosystem and enhance the overall user experience with high-performance applications.
