5G: evolution deferred – what’s next for connectivity?
Digital Consumer Trends 2020
Published: 22 September 2020
Authors: Paul Lee, Cornelia Calugar-Pop
15 minute read
One year on from the consumer launch of 5G in the UK, demand remains modest: as of May 2020 just two per cent of respondents (adults aged 16-75) claim to be using 5G.
COVID-19 may well have constrained the industry’s ability to promote 5G in the UK, but interest should spring back over the next 12 months, as a growing number of 5G devices, including models at mid-tier prices, become available.
The impact of COVID-19 on consumer demand for 5G:
- Operators have had less opportunity to market one of 5G’s principal initial selling points: better capacity in congested areas. Outdoor campaigns promoting 5G in venues such as congested airports or city centres would have been ideal; but as of end-August these places remained quiet. This has also meant that the nation’s mobile phone stores, which in normal times act as billboards for the latest technologies, have been unable to raise the flag for 5G.
- During lockdown, smartphone sales slowed, reducing the opportunity to upgrade to a 5G phone. Consumer confidence is weaker; there is less buzz around new smartphone releases; less socialising means less opportunity to show off a new phone, and for non-5G users to upgrade out of envy. Globally, smartphones sales are forecast to be down 12 per cent in 2020. In the first half of the year, smartphone sales declined by 20 per cent. The launch of some phones has also been delayed.
- There is less need for mobile data, as a large chunk of users, in particular those who remain working at home, are outdoors far less, and are more likely to be connected to Wi-Fi. What remains to be seen is the long term impact of COVID-19 on digital consumer behaviours.
The reshaping of connectivity demand, while temporary, may also slow the roll-out of 5G in the short term. Mobile operators tend to deploy networks to meet anticipated demand – but this has shifted from urban to residential areas and is temporarily far more diffused. Operators may consider delaying the deployment of 5G networks in traditionally busy areas until there is a return to high demand; and, in parallel, operators may prefer to bolster 4G networks in residential neighbourhoods where demand has shifted, particularly for voice calls.
Global demand for 5G
While demand for 5G in 2020 may be softer than it would have been were it not for COVID-19, other markets are likely to see strong demand, particularly in Asia, with China leading due to its strong investment in 5G infrastructure. In some of these markets, 5G is perceived to be of critical strategic interest, and major investment has been encouraged. 5G has been rapidly rolled-out in China, with operators expected to spend $26 billion (£20 billion) deploying over 600,000 5G cells by the end of the year. South Korea reported approaching 7 million 5G subscribers as of the end of May 2020. Korean operators spent $3.4 billion (£2.6 billion) on 5G infrastructure in the first half of the year and plan to invest $22 billion (£17 billion) over the three years to 2022. In 2021, 5G coverage will include subways and all train stations. US network operators have also made bold commitments: Verizon announced as part of its H1 2020 results that it was accelerating its roll out and AT&T planned to have a nationwide network by mid-2020.
In 2021, global 5G phone shipments are expected to number over 150 million. This is more than double the installed base of 70 million 5G phones as at the mid-point of 2020. Falling handset prices will drive consumer adoption: mid-range devices are now available for $230-$260 (£180-£200).
5G consumer understanding
Demand for 5G in the UK is also likely to depend on market awareness and consumers’ understanding of the technology. According to our research, this is currently lacking. About two-thirds of adults aged 16-75 in the UK say that they ‘do not know enough about 5G’. A quarter of respondents ‘strongly agree’ with this statement and a further 38 per cent ‘tend to agree’. Only 15 per cent disagree. Among women, the perception of not knowing enough is yet higher, at 74 per cent: websites and other marketing from operators and smartphone manufacturers are failing to connect with three out of four women. Across multiple operators in several countries, the 5G section of operator websites predominantly feature men. Among older age groups, the feeling of not knowing enough about 5G is also elevated: 69 per cent among 55-64 year olds and 73 per cent among 65–75 year olds.
Concerns around health implications are an additional factor that may dampen demand for 5G (see Figure 1). Fourteen per cent of respondents believe that there are health risks associated with 5G. The misperception of health risks is most acute among younger age groups: 18 per cent of 25-34 year olds and 16 per cent of 16-24 year olds believe there are health risks. Incidence among older age groups is far lower at 11 per cent among 55-64 year olds and 10 per cent among 65-75 year olds. But a large proportion of these age groups answered ‘don’t know’ (20 and 26 per cent respectively).
While it is concerning that 14 per cent believe (mistakenly) that there are health risks from 5G, this is lower than for other European countries surveyed, as shown in Figure 2. Notably, over a third of respondents in Austria believe that there are health risks associated with 5G.
Concerns around the health impact of radio waves have always existed, notably flaring up upon the launch of 3G, 4G and Tetra networks. Exposure to such misinformation is becoming increasingly prevalent, due to the ubiquity of the internet, and its search and sharing tools.
For the record, based on all available evidence from accredited sources, there are no risks to health from either 5G base stations or from handsets. Both emit radio waves, but at a very low power level, which are well within accepted levels. 5G, and other mobile frequencies, operate within spectrum ranges that have been used for mass market activities including television and Wi-Fi.
Consumer exposure to 5G misinformation
Misinformation is pervasive, and 5G myths have been among the most seen and shared untruths of 2020. A survey undertaken by Ofcom at the end of June found that 29 per cent of respondents had come across false or misleading information about COVID-19 in the prior week. The most common topic, seen by 21 per cent of respondents was ‘theories linking the origins or causes of COVID-19 to 5G technology’. Exposure to 5G misinformation at the end of June was highest among 16-24 year olds.
In a previous Ofcom survey undertaken on 10-12 April, 50 per cent of all respondents had been exposed to 5G misinformation (linking the technology to COVID-19). Of those who saw what they regarded as misinformation, the majority (57 per cent) took no action. It is also likely that some people do not recognise misinformation as such, which suggests that the actual proportion of people exposed to COVID-19 misinformation may be yet higher than just half the population.
Understanding how mobile networks work is challenging and time-consuming, with every new generation of network more sophisticated and harder to comprehend. There are many technical explanations, accessible for free, of how mobile networks, including 5G, work. Ofcom has posted multiple reports that explain clearly how safe 5G networks are. These include a report, published in February, titled: “Electromagnetic Field (EMF) measurements near 5G mobile phone base stations”. But the typical consumer may not know where to find these reports and once located may struggle to understand them.
ICNIRP is the International Commission on Non-Ionizing Radiation Protection, an association based in Munich. Its remit is “to protect people and the environment against adverse effects of non-ionizing radiation (NIR)”. Non-ionizing radiation is any type of electromagnetic radiation that is sufficiently weak such that it does not ionize atoms or molecules. Radiation is the emission of transmission of energy in the form of waves, and is used for many common applications including mobile telephony, Wi-Fi, microwaves, X-rays and ultrasound scans. Ionizing radiation can be harmful to the body if exposed in large amounts.
Concerns about 5G’s health implications are unlikely to be a major constraint on long-term demand for the technology, but it may slow network roll-out in the short term.
A more concerning recent development, however, has been arson attacks on mobile networks, and threats to engineers working on any communications network. As of May 2020, 90 mobile phone masts – of any generation – had been attacked in the UK. Telecom engineers working on fixed networks have been forced to flee attacks by anti-5G campaigners.
Despite the volumes of misinformation, we would still however expect mobile users to migrate to 5G phones as they become more available. This will be partly out of choice, to access higher speeds and more capacity (or put otherwise, to reduce the risk of not being able to connect in congested areas). And a large proportion of 5G users will migrate out of inertia – within 24 months there may be very few non-5G models available, at any price point.
How should 5G operators respond?
5G is a major innovation which in the long run consumers will benefit from directly (in the form of better service), and indirectly through some of their suppliers using 5G to improve the user experience.
Operators should, as soon as the time is right, restart their marketing around 5G. This is the single most significant network-centric innovation for several years, and it offers the ability to portray telecom companies as innovators.
Consumer acceptance of 5G requires a clear and enthusiastic articulation of the major consumer benefits of the technology. These should be explained in terms that are understandable and relatable to the wider market. Marketing materials for 5G should reflect the diversity of their customers, whilst clearly explaining how 5G enables a wide variety of applications. This ranges from the pragmatic, such as increasing chances of connecting in busy areas, to the more audacious, such as remote surgery.
All industry stakeholders, including mobile operators, equipment vendors and regulators, should consider how to re-engage in a debate that they may well have thought had been concluded. Otherwise, adoption of 5G may well be slowed by worries about 5G’s health impacts. Industry stakeholders will need to provide accessible and evidence-based information on the subject, and they should also consider which media channels are best suited to engage in the debate.”
Director, Economic Consulting
More data, more trends
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