Winning in the market with differentiated connectivity offerings

What do you do when you find yourself in a perfect moment? Whether you’re watching your favourite band perform at a festival and you want to share with family, friends and the world or you need a secure and reliable connection for that critical on-line meeting on the go.

It’s at times like these that differentiated connectivity can elevate key moments for 5G users. Our Ericsson ConsumerLab report ‘Winning in the market with differentiated connectivity offerings’ provides consumer behavior insights related to their experiences and expectations of mobile services and explores the opportunities that open up for service providers.

What does our research reveal about differentiated connectivity opportunities for service providers?

Our ConsumerLab report shows how the performance guarantees enabled by differentiated connectivity can boost consumer experiences in key moments, and what this means for service providers.

The report reveals that as 5G continues to roll out, and consumer demands are increasing more than 40% of consumers identify key moments where they would opt for guaranteed network performance. Half are willing to pay for this.

Our research highlights the opportunities this brings service providers. This means that service providers not offering differentiated connectivity are missing out on one to two months of average revenue per user (ARPU) every year.

In addition to the revenue opportunity, the report presents data showing how differentiated connectivity strengthens brand equity and customer satisfaction, impacting customer lifetime value. The study also explores the role of differentiated connectivity in addressing demands arising from the accelerating adoption of AI by consumers.

The Ericsson ConsumerLab report provides insights into how differentiated connectivity can elevate consumer experiences and help service providers to win in the telecoms market.

Executive summary report insights:

ARPU opportunities can be unlocked with differentiated connectivity. With shifting consumer expectations more than 40% of consumers identify key moments where they would opt for guaranteed network performance. Half are willing to pay for this.

By not offering guaranteed performance options, service providers are leaving two months’ ARPU on the table each year.

Differentiated connectivity strengthens brand perception. Differentiated connectivity boosts brand equity. Consumers with mobile plans that offer performance differentiation have 46 percent higher brand perception scores compared to consumers with the same service provider, but without enhanced performance offerings.

The value of differentiated connectivity must be communicated clearly. Off-the-shelf differentiated connectivity offerings are not guaranteed to succeed. To ensure that uptake of differentiated connectivity is smooth, offerings need to be discoverable and frictionless, and clear messaging about the benefits should be in place.

Differentiated connectivity is a strategic tool that helps service providers compete in the market. In a competitive and dynamic market landscape, service providers can use differentiated connectivity as a strategic lever to protect against low pricing and as well as boost retention . Despite the availability of low-priced, best-effort 5G plans, one in two users would prefer to go with differentiated connectivity.

Differentiated connectivity has a role in meeting the demands of future AI adoption. AI is on the rise and here to stay; convenience, ease of use and intelligence of devices are key for consumers. By 2030, share of time spent using AI apps outside the home, will increase from 35 percent today to 45 percent and one in four consumers will use AI across multiple devices.

Read the full report:

Five key questions for service providers considering differentiated connectivity

The objective of this ConsumerLab report was to gain a deeper understanding of how consumers perceive differentiated connectivity offerings and to uncover insights into their experiences and expectations of mobile services, both now and in the near future. The survey, conducted between June and August 2025, includes responses from more than 43,000 smartphone users aged 15-69 across 27 markets, of which 34,000 were active 5G users. This report highlights five key questions that communications service providers might have when considering launching differentiated connectivity and offers insights to service providers that have already launched it.

Boosting revenues and brand equity

What are the five key questions that service providers should be asking about differentiated connectivity?

This ConsumerLab report addresses five key questions for service providers that are considering launching differentiated connectivity in their respective markets, providing consumer behavior insights to support them on their journeys. It also offers insights to service providers that have already launched it and want to better understand consumer experiences and expectations around network performance assurances.

Taking a step back, let’s start with the basics.

What’s the upside of moving toward differentiated connectivity for service providers?

As 5G continues to roll out globally, bringing improvements to network performance, speed and availability, consumer expectations around 5G network performance are also evolving. More than 40% of consumers identify key moments where they would opt for guaranteed network performance. Half are willing to pay for this.

Figure 1: 5G users who identify key moments where they would opt for guaranteed network performance and are willing to pay for it

This insight highlights the fact that consumer expectations are shifting globally, with speed no longer the only determinant of good 5G network connectivity. Compared to 2023, consumers are now placing more importance on browsing and uplink speeds, rather than download speeds.

These consumer preferences translate into business opportunities for service providers. Our consumer trends report shows that by capturing consumer willingness to pay for seamless network experiences in the moments that matter, service providers can generate one to two months of additional ARPU per year that otherwise would have been left on the table. Examples include boosting connectivity for live-streamers at concerts and offering guaranteed performance levels to executives at busy transportation hubs.

Beyond ARPU increases, what findings support the launch of differentiated connectivity?

Moving on, the second question aims to highlight other findings that support the transition to differentiated connectivity, drawing key consumer behavior insights from markets where it has already been launched.

One key finding that supports its launch is that it is proving to be an impactful differentiator for consumer brand perception of service providers, which is another decisive success metric outside of simply driving revenue increases in this extremely competitive industry.

When analyzing data gathered from seven markets where differentiated connectivity plans are being offered, including Australia, France, Singapore, the Philippines, Thailand, the UK and the US, we can see that these subscriptions tend to vary, falling into three distinct archetypes, ranging from premium plans to add-on performance boosts. [1]

Consumers in these markets with mobile plans that offer performance differentiation have 46 percent higher brand perception scores, compared to consumers with the same service provider but without enhanced performance offerings. These users also have 18 percent higher satisfaction scores with their service providers overall, compared to the average score for 5G users. Yet, network performance observability is a pain point that service providers still need to address. 5G users in these markets still state the need to clearly see that they are getting what they are paying for, with about half of the users surveyed believing that network performance levels from differentiated connectivity services are mixed. Our consumer trends report reveals that to address this issue, service providers need to ensure their technology and software toolkits are in order and provide clear evidence to consumers of the benefits of the service.

Consumers have indicated three ways in which they would like to receive confirmation that the service has been activated:

1. An icon that conveys the enhanced performance (popular with 44 percent of consumers).
2. An aggregated network quality summary (popular with 35 percent of consumers).
3. Real-time network observability (popular with 21 percent of consumers).

What can be done to drive the uptake of differentiated connectivity, and is it a given that uptake will be smooth?

Considering the many benefits for consumers, one might assume that service providers can simply expect word of mouth to spread the concept. However, our consumer trends report shows that is not the case.

As can be expected, awareness about differentiated connectivity has a direct impact on uptake, however, 60 percent of the consumers surveyed reported that they were either unaware of it (42 percent) or found the concept to be unclear (18 percent). For service providers seeking to drive uptake, clear messaging and explanations to consumers about its benefits should be in place. Additionally, information about these offerings should be made available in regular customer communications, tailored to the respective segment tiers that service providers wish to target in their customer bases.

Addressing this lack of awareness in markets where it’s offered will enable service providers to potentially cater to the 20 percent of consumers who reported strong interest in acquiring these services. 

In conclusion, the success of off-the-shelf differentiated connectivity offerings is not a given; they need to be discoverable and frictionless for consumer uptake.  

The last two questions for service providers considering a move toward differentiated connectivity will be discussed in more detail in the following sections.

How can differentiated connectivity help service providers compete in the market, and what are the key routes to market for it?

Revenue growth is needed for the long-term survival of any business, but with the telecom industry facing flat revenues, how can service providers lead and increase ARPU in an already highly competitive market? Can differentiated connectivity be utilized as a strategic lever to grow and retain market share?

ARPU is a key success metric for service providers. Findings from this ConsumerLab report revealed that performance guarantees enable ARPU growth opportunities for service providers in the different markets they operate in, depending on the path they select to address their market reality.

But beyond ARPU, which, as mentioned previously, is being left on the table by service providers, a notable advantage is the flexibility it offers regarding strategic positioning; its go-to-market strategy can adapt to align with a service provider’s desired market position, without compromising on the concept or its capabilities.

To better capture the variation in market realities and how differentiated connectivity can be leveraged strategically (beyond ARPU opportunities) across markets where such plans are offered, our consumer trends report assessed various market conditions. Let’s look closer.

As a tool to protect against low pricing

In markets where service providers need to manage and protect against low prices, the key competitive advantage of differentiated connectivity is the improved network quality it offers. This conclusion was derived via a trade-off exercise in which consumers were asked to pick between and prioritize three plans simulated in a natural market scenario: The first plan offered best-effort 5G at a low price; the second plan offered two times the network resources at a medium price; and the third plan offered four times the network resources at a high price.

When choosing between these three plans, which were equal on all attributes except for price and network resources, the result was clear: Improved network quality was popular among consumers, even at higher prices, with 34 percent willing to pay for medium-priced plans with double the network resources and 21 percent willing to pay for high-priced plans with four times the network resources. The remaining 45 percent opted for best-effort 5G.

As a differentiation tool

In markets where major data-bucket plans[2] are being offered, differentiated connectivity can be leveraged as a differentiation tool to capture new consumer business. Consumers report that 47 percent of their decision-making process when it comes to selecting mobile plans rests on assured network quality, including both network boosts and enhanced plans. In fact, these services are 1.5x more important for users than perks and content when selecting 5G plans. Data bucket plans differ in various markets. Our ConsumerLab report refers to plans with high GB packages.

As a retention tool

For service providers seeking to maintain or grow their market position, differentiated connectivity can be used as a strategic tool to retain subscribers, with two-thirds of consumers reporting that they would be willing to take on other solutions and products from their service providers if differentiated connectivity were offered. Moreover, 30 percent indicated they would be willing to churn from their current provider if another provider offered it and theirs did not.

Figure 2: Differentiated connectivity as a strategic tool in a dynamic market landscape

What are the routes to market for service providers looking to offer differentiated connectivity to consumers?

To unlock these opportunities, service providers will need to go beyond traditional business models and move toward new business models that enable the successful offering of differentiated connectivity. As mentioned earlier, service providers will also need to ensure that their technology and software toolkits are in order and that they are able to prove to consumers that they are getting what they pay for. This is an opportunity for service providers to widen their role in the value chain and strengthen ecosystem collaboration – a shift beyond the traditional ways of engaging.

Our consumer trends report shows that over one in three consumers would still prefer to opt for the direct service provider model to obtain assured network performance (split between 10 percent, who find value in temporary performance enhancements, and 24 percent, who would opt to obtain it via enhanced, "always-on" subscriptions). However, 26 percent would prefer it to be embedded in apps (split between 16 percent, who would prefer it via application programming interfaces (APIs), and 10 percent through other business models, such as getting it for free by watching advertisements). This implies that service providers can gradually move away from their current mobile broadband business models[3] toward platform business models and change their role in the value chain. This also means strengthening ecosystem collaboration, ensuring app developers make full use of the network capabilities that are exposed to them through network APIs.

Figure 3: The preferred business models among 5G users for obtaining differentiated connectivity

Will service providers need to leverage differentiated connectivity to prepare for the next wave of apps and devices, or is it only needed for today’s use cases?

Looking ahead to 2030 and beyond, our ConsumerLab report examines the importance of network performance assurances for the next wave of apps and devices as AI becomes an integral part of society and transforms the world at an unprecedented pace.

The rise of AI-native apps and devices is paving the way for more innovative, immersive and time-sensitive experiences, and as a result, redefining consumer behaviors and expectations for what lies ahead. With AI adoption growing at an exponential rate – globally, there are already 1 billion monthly active users of standalone AI[4] – performance assurance will be an essential component of service provider offerings in the future to support the new application requirements brought forth by AI.

Today, consumers already rate AI responsiveness as a key component of overall network satisfaction, with our ConsumerLab report revealing that they mostly blame any lag in AI responsiveness on their service providers, despite it not always being their fault.

Consumers increasingly expect their AI interactions across multiple interfaces and devices to feel like a single seamless experience. By 2030, more than 25 percent anticipate using AI across multiple devices. Additionally, two times as many consumers expect to use AI beyond smartphones and tablets, giving rise to increased usage of smart wearables and connected car assistants. Such cross-platform engagement will require AI systems capable of contextual intelligence and understanding, which involves not only recognizing the consumer’s exact location but also their activity, intent and even emotional state, to deliver meaningful, context-aware experiences.

Furthermore, the ConsumerLab report indicated that, among consumers, multimodal[5] AI adoption will more than double by 2030, increasing from 13 percent to 29 percent. This progression reflects a broad industry shift toward a more integrated, human-like mode of interaction with AI.

Another trend expressed by consumers is the expected increase in their share of time spent using AI apps outside the home, rising from 35 percent today to 45 percent in 2030. Consumers report that they are most likely to use AI in these settings while “being out and about,” followed by “while traveling (excluding commuting)” and “while in a personal vehicle.”

In this emerging landscape, differentiated connectivity enabled by 5G SA[6] represents an important stepping stone for service providers seeking to deliver next-generation, immersive, and contextually intelligent services and cater to the demanding and diverse requirements of next-generation AI-driven applications. While the full scale and future capabilities of AI are still unfolding, market demand for AI-enabled services is already tangible.

With the maturing of the next-generation AI-driven ecosystem, networks will need to support the diverse requirements of these new AI applications, such as ultra-low latency (uplink and downlink, with uplink expected to take more prominence), guaranteed bandwidth, enhanced security, real-time analytics, and overall better network efficiency. By commercially launching 5G SA, service providers are equipped to meet evolving consumer expectations, unlock differentiated service offerings, and capture new business opportunities in this increasingly intelligent and connected world.