How Hard Will it Be to Sell 5G?

How hard will it be to sell 5G? Much depends on the pricing and packaging of service, plus the willingness of consumers to buy new handsets. In some cases, the consumer decision might hinge on the handset replacement timing, as some major service providers might not charge a premium for 5G service.

In other cases, where 5G actually does cost more, coverage and uses cases will be pivotal. “Carriers will find it hard to sell 5G services unless 5G offers a better mobile network experience,” argues OpenSignal.

As always, the difficulty will be that it is virtually impossible for a consumer to see, tough, smell or taste the difference between their own 4G experience and the new 5G experience. As with many other intangible products, “quality” and “value” can only be assessed after the purchase is made.

It will be relatively easy to illustrate the potential differences. Across the United States, 4G speeds range from an average of 32.9 Mbps in New Jersey to 12.1 Mbps in Mississippi.

source: Opensignal

It is likely 5G will represent three to 10 times such speeds, with lower latency performance as well, end to end. That arguably will improve user experience when uploading and downloading. One way of asking the question about experience is to compare 5G experience as an improvement over 4G, as 4G was an improvement over 3G.

Many users will attest that 3G improved experience over 2G, as 4G improved experience over 3G. Web browsing became possible using 3G where the 2G experience was unsatisfactory. 4G meant video was possible where it was unpleasant using 3G.

The issue with 5G is that 4G now is good enough to handle browsing and video, and more speed will not necessarily provide any more value. Latency improvements will not help streaming much, either.

So the issue is which apps and use cases other than those really benefit from 5G performance improvements, and whether users deem those improvements to be worth the potential higher recurring fees.

Also, since coverage will be spotty at first, the other issue is how often 5G actually can be used during a normal day. But if 3G and 4G provide templates, the interim period of limited coverage will not last more than a few years. Also, phone replacement cycles will mean that most customers can choose to upgrade to a 5G device in the normal replacement cycle over about that period.