NEW DELHI: One in four users of generative AI (Gen AI) applications are willing to pay up to 35% more for guaranteed fast and secure connectivity to support high-capacity applications, says a report by Ericsson.
The report predicts that the number of smartphone users using generative AI apps weekly will rise 2.5-fold over the next five years. It also reveals that fast-growing markets such as India, Thailand, and Saudi Arabia show a significantly higher interest in differentiated connectivity compared to countries like France and Spain.
High demand for enhanced connectivity
According to Jasmeet Sethi, head of ConsumerLab at Ericsson, the latest research indicates that as AI-powered applications become more widespread, users' expectations for enhanced connectivity are also increasing. “This reflects consumers' expectations for the future capabilities of AI apps—possibly in areas like image, audio, or video generation—and their willingness to pay for these capabilities to be delivered in a fast and high-quality manner,” Sethi stated.
Opportunities for service providers
The report suggests that as users demand faster and more reliable connectivity for AI applications, there is a growing opportunity for Communication Service Providers (CSPs) to tap into new revenue streams. As CSPs transition to performance-based business models, offering tailored subscriptions and plans that ensure optimal performance for specific consumer segments, they could see a 5-12% increase in 5G ARPU (average revenue per user).
Sethi also highlighted that one in three 5G smartphone users are willing to reallocate 10% of their current mobile app spend to purchase apps that offer built-in elevated connectivity. By exposing Quality on Demand (QoD) network APIs to developers, CSPs can enable the creation of premium, high-performance app experiences, unlocking new revenue opportunities.
Notable findings
Willingness to pay more: Thirty-five per cent of global 5G users are open to paying more for differentiated connectivity that guarantees better performance for essential tasks.
Assurance seekers segment: Contrary to the assumption that users won't pay extra for connectivity, the survey identified 20% of users, called ‘assurance seekers,’ who are actively looking for elevated connectivity for critical applications and are willing to pay for it.
Rise in generative AI app usage: The use of generative AI apps is expected to increase 2.5-fold in the next five years. One in four current AI users are already willing to pay 35% more for differentiated connectivity to ensure fast and responsive performance of these applications.
Regional variations: Markets like India, Thailand, and Saudi Arabia exhibit twice the share of smartphone users interested in differentiated connectivity compared to markets like France and Spain.
Five-stage journey for CSPs: The report outlines a pathway for CSPs to evolve from offering non-differentiated mobile broadband to embracing performance-driven and platform-based models, with network APIs empowering developers to create customized app experiences.