Article
3 minute read 21 October 2021

Setting the stage for rising consumer adoption of 5G

Consumers are content and feel little urgency to upgrade, but 5G is seeing rising demand

3 minute read 21 October 2021
Naima Hoque Essing

Naima Hoque Essing

United States

High consumer satisfaction with current mobile providers, plans, and phones creates little urgency to upgrade to 5G. But the more exciting aspects of 5G are yet to come.

The good news is that consumers are largely content with their mobile providers, plans, and devices and feel no urgency to change. But 5G is seeing rising consumer demand. In fact, the availability of 5G service is a top consideration among early adopters thinking about switching providers in the next year, according to a recent Deloitte survey.1 Specifically, potential switchers ranked 5G service availability as a top-three factor (along with price-for-value and network quality) in selecting a potential new service provider (see figure).

That said, most consumers seem to be in no rush to switch providers or upgrade their phones to 5G. For the most part, consumers are happy with their mobile providers. While there is always room for improvement, roughly two-thirds of respondents were largely satisfied with their provider’s network performance to, for example, load web pages or stream video. Most, therefore, had no plans to switch providers within the coming year.

Consumers also appear largely content with their mobile devices and feel no urgency to upgrade. With the average age of phones at 1.7 years, 40% of survey respondents said upgrading their phone was not a priority and planned to hold on to their current device for another 1.5 years on average. Only one in three respondents expressed intent in upgrading within the year.

With the main activities for which people use their phones being messaging (47% of surveyed respondents), emailing (37%), taking photos or videos (34%), and engaging with social media (29%), the majority of those surveyed (52%) felt their current phones possessed all the capabilities they required. For these activities, an older 4G phone is, for the most part, just as capable as a new, more expensive 5G model.

But the stage is being set for greater consumer 5G adoption over time.

With consumers holding on to older devices, there is likely pent-up demand, which a right combination of education, innovation, and incentives can unleash. And while a new smartphone may not be a necessity, there is often latent desire for the next new product, service, or experience that might just transform their lives.

As was true with the rollout of previous generations, consumers often need to be incentivized to switch to a new network as they wait and see if it lives up to the hype. Moreover, incentives can help make up for uneven coverage in the early days of deployment. Incentives can also help relieve the financial burden of the higher cost of initial devices, particularly among early adopters who tend to be younger with fewer resources. And as 5G demonstrates an overall better user experience and begins to deliver compelling new applications that only 5G can provide, it will likely drive more natural interest and adoption.

Telcos, device makers, and the broader ecosystem that supports them also see incentives in working together to rapidly scale adoption. For OEMs and device makers, new technologies such as 5G can stimulate demand and drive higher sales. For telcos, 5G can not only enable them to deliver on growing expectations for faster and more reliable speeds and feeds, but also do so at a lower cost per megabyte transmitted. And finally, growing 5G customers and devices create a market for application and content creators to develop new services and experiences that can improve and potentially revolutionize the way consumers travel, exercise, shop or entertain themselves.

As cool applications that work only on 5G begin to appear, consumer curiosity and excitement should begin to drive mass adoption. We saw this with the rollout of 4G-LTE. The emergence of new-to-market ride-sharing and streaming-video-on-demand services that only worked on new smartphone devices on the new network generated rising consumer interest and healthy upgrade activity for two to three years after 4G-LTE achieved wide-scale coverage.2

Thus, by working together to encourage and demonstrate the relevance of 5G to consumers, this ecosystem can ultimately drive greater adoption. And as it matures into the center stage of consumers’ daily lives, 5G’s more exciting aspects will likely unfold gradually.3

Key takeaways

  • Although consumers are largely content with the performance and capabilities of their mobile phones and plans, a large installed base of older phones bodes well for the 5G upgrade cycle.
  • Incentives can help unleash pent-up demand among consumers as the technology ecosystem matures.
  • Over the coming years, innovative new applications and services that take full advantage of 5G will likely emerge and attract greater consumer adoption.

  1. Chris Arkenberg et al., 2021 Connectivity and Mobile Trends Survey , Deloitte Insights, 2021.View in Article
  2. Dan Littmann et al., 5G in 2020: Plotting the course for 5G innovation , Deloitte, 2020.View in Article
  3. Kevin Ferguson, “5 predictions about 5G adoption in 2021 and beyond ,” WhatIs.com, June 4, 2021.View in Article

The author would like to thank Brooke Auxier, Rithu Mariam Thomas, Shubham Oza, Prodyut Ranjan Borah, Kimmerly Cordes, Gautham Dutt, and Jaime Austin for their production assistance.

Cover image by: Jaime Austin

Technology, Media & Telecommunications

Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together one of the world’s largest group of specialists respected for helping shape many of the world’s most recognized TMT brands—and helping those brands thrive in a digital world.

Jana Arbanas

Jana Arbanas

US Telecom, Media & Entertainment Sector Leader

Subscribe

to receive more business insights, analysis, and perspectives from Deloitte Insights