5G for consumers - digital day

5G for Consumers
Calls to action from consumers for
operators to rethink mobile broadband
2018-11-23Afrizal Abdul Rahim
Head of Consumer & Industry Research SEA, Oceania & India

2018-11-23
WE CONDUCT WE OFFER
NEW INSIGHTS
IN KEY AREAS
RURAL &
CITY LIFE CONSUMER
EXPERIENCE
SMARTPHONE
USAGE
TV &
VIDEO
FUTURE
SCHOOLS
COMMUNI-
CATION
TRENDS
PRIVACY
APP
CULTURE
MORE THAN
RESPONDENTS
1 Million
IN MORE THAN
COUNTRIES SINCE 1995
70
REPRESENTING
INDIVIDUALS
1.1 Billion
IN MORE THAN
COUNTRIES/ANNUALLY
40
BUILDING THOUGHT LEADERSHIP - SHAPING THE NETWORKED SOCIETY
MEASURING REPORTING ANALYZING TRACKING
CONSUMER
INSIGHT
REPORTS
STRATEGIC
CONSUMER
ANALYSIS
& ADVISORY
MARKET
REALITY
SIMULATION
TOOL
CONSUMER
SEGMENTATION
MODELS
EricssonConsumerLab-thevoiceofthe
consumer

15%
26%
26%
34%
60%
40%
0%
20%
40%
60%
80%
100%
Best Network Not best network
Switching Risk across those who believe their operator has best
Network vs those who don’t
Churner Not Sure Not Churner
1,7X
Those who don’t believe their own operator
provides the best network in the market are
More likely to snap ties with their operator,
than those who believe their operator provides
the Best Network!
Perceptiondrivesloyalty
1,4 X
Base: Smartphone users aged 15-65
Source: Ericsson Consumer & IndustryLab Towards a 5G Consumer Future study, 2018
23% 31%
34%
46%
44%
23%
0%
20%
40%
60%
80%
100%
Best Network Not best network
Switching Risk across those who believe their operator has best
Network vs those who don’t
Churner Not Sure Not Churner
1,4X
Global
average
Indonesia

Buthowisthisperception
built?
64%
13%
6%
4% 4% 3% 3% 2% 2%
Own
experience
Family
advice
Third party
reports
Government
reports
Speed
tests
Operator's
reports
Experts'
advice
Operator Ads Celebrity
Endorsements
% of smartphone users and sources of information they trust most to judge operators
network performance
More likely to rely on their own experience
with the network as a most convincing
source of Network Quality assessment!
find operators own advertising and
reporting on network performance to be
credible and trusthworthy!
Customers in Indonesia are concerned that operators
might market 4G as 5G technology
Only 2 percent find operators’
own advertising and reporting
on network performance to be
credible and convincing.

— Based on statistical regressions to assess the
effect that a one-point improvement in
satisfaction rating for different service elements
has on willingness to recommend, all other
things being equal, the findings show that:
— the strongest single factor was network
coverage. Improving satisfaction with
coverage leads to a greater improvement in
NPS than it does for other factors. Data
speed was the second-strongest factor for
Emerging Asia Pacific customers. Network
performance is the main driver of customer
experience in the region.
Networkperformanceshowsthe
strongestimpactonNPS
Source: Analysys Mason’s Connected Consumer Survey 2017: Mobile
Customer Satisfaction and Churn in Emerging Asia Pacific
Statistical regressions on satisfaction scores against respondents’
willingness to promote their service provider, all countries, emerging
Asia–Pacific1
0.0 0.2 0.4 0.6
Call/SMS allowance
Data allowance
Customer service
Price
Data speed
Network coverage
Contribution to respondents' willingness to promote
1 Questions:“Pleaserateyour satisfaction withthe followingaspectsof your mobileservice”,“On a scalefrom0
to 10 how likelyareyou to recommendyour serviceprovider…”;n = 5000

2018-11-23 |
Networkmustevolvebasedonconsumer
expectations
“I start getting stressed if
the content doesn’t appear
after 4 seconds”
General Consumers Millennials
“2 seconds is the limit for me
before I start getting stressed
if the content doesn’t appear”
› Consumers start getting stressed after 4 seconds. While for the millennials the threshold is
even lower at 2 seconds. Network must be able to deliver this level of time to content and
evolve based on the consumers’ expectation.
Source: Every Second Counts (2017)

2018-11-23 |
0.9
0.6
0.4
0.2
0
0.7
0.5
0.3
0.1
0.8
1
Driving in
heavy traffic
Calm and relaxed
when driving
High video
delays
When relaxed
Comparable stress responses
› Stress levels rose 16%
when driving in heavy traffic
› Stress level rose 42%
waiting for a video to load
42%
Rise in stress
16%
Rise in stress
Waiting for a video to load is
stressful as driving in rush
hour
Cognitiveload/stress
Source: Ericsson Consumer Lab, Every Second Counts, 2017
Trafficjamtension
Source: Every Second Counts (2017)

2018-11-23 |
Communicatingsuperiorperformance
The customer benefitTo Consider
Factual layer Coverage Max Speed Roaming 4G+
Best 4G?
Fastest? Most reliable coverage?
Most common
› Consider focusing on the customer benefits rather than factual attributes in future
communication for superior network performance.

2018-11-23 |
Calltoaction
— Being with a mobile operator that has best network matters to consumers. This is more driven by their
own perception which in turn is influenced by their direct experience with the network. Consumers are
less likely to trust operators own claims and advertising and rely more on their own network experience
or recommendations from others to build this perception. On the way to a 5G future, consumers are
calling on operators to steer clear of baseless marketing slogans and instead to focus on real network
experience, thus keeping networks more honest in their marketing.

2018-11-23 |
Provide us with an effortless buying
experience

57%
74%
67%
68%
54% 57% 54% 57%
70%
45%
49% 53% 46%
54%
64% 71%
72%
67%
75% 69%
63%
72%
67% 59% 64% 58% 54%
59%
69%
79% 78% 74% 74% 73% 73% 73% 71% 69% 69%
63% 62% 59%
Total Japan Argentina Brazil China Indonesia Ireland France South Korea Finland Mexico Germany UK US
Complicated to understand what is included in mobile data plans
Navigating through and finding the best plan among all the options is confusing
It is difficult to keep up with frequent price changes, price campaigns, introductory prices and discounts
The telecom market is extremely difficult for
consumers; 57 percent of smartphone users in
Indonesia and globally find it complicated to
understand what is included in mobile data plans.
The complexity in telecom (percent of
smartphone users who agree with the following
statements)
Base: Smartphone users aged 15–65 across Argentina, Brazil, China, Egypt, Finland, France,
Germany, Indonesia, Ireland, Japan, Mexico, South Korea, the UK and the US
Source: Ericsson Consumer & IndustryLab, Towards a 5G Consumer Future, 2018
Provideuswithaneffortlessbuyingexperience

53%
74% 73%
69% 67% 66%
63%
53%
50% 49% 48%
45%
39% 37%
14%
Total China Brazil Mexico Indonesia Argentina South
Korea
UK Egypt Japan Ireland US France Germany Finland
% of smartphone users who agree they always worry about going over allowances and limit their usage
Halfofallsmartphoneuserssufferingfrom
dataplandistress
Prevalence of
unlimited plans
Base: Smartphone users aged 15-65 with capped data plans

Costsconsumerloyalty
63%
45%
19%
10%
16%
6%
Better priced data
plan available
Poor network quality
Bad Customer service
Relocated
Billed inaccurately for
data usage
Other
% of consumers who stated the reason why they switched
from their past mobile operator 62%
31%
30%
26%
20%
16%
14%
10%
8%
3%
More generous data allowance with…
Lost unused data at end of each month
Overage fee charged for crossing my…
Used to exceed my data plans very often
No free data usage for apps and services
No unlimited mobile data plan
Shared data plan with another operator
Provider does not have the phone I want
Other
No reason
Reasons to switch-Issues with previous service provider
Base: Smartphone users aged 15-65 with capped data plans who switched their operators in the
past one year
In Indonesia among those who churned in the past 6 months, about two thirds have switched looking for a new data
plan, however at least 31% of these switched because of misalignment of plans i.e either they exceeded their
allowance and were charged an overage fee or just had unused data left over

— Irrespective of age roughly 2 in 5 of all
smartphone users in Indonesia are satisfied
with the digital capabilities offered by their
operators especially during the buying
experience. Today its neither simple nor
effortless!
FallingshortonDigital
customerexperience
How satisfied are you with the following? Top 3
Data plans
that offer
peace of
mind
Intelligent
Online
Recommenda
tions based
on usage
Simple
online
Buying
experience
Simple and
Transparent
ways to explain
data plans
Digital tools to
customize &
design plans
Immediate help
and guidance
using virtual
chatbots
Real Time
Insight on
Usage
20%
25%
30%
35%
40%
45%
50%
55%
60%

DigitalExperienceInnovations(1)
Simplified: Zero click apps
What it is: A zero-click app that automatically orders the consumer’s
favorite pizza 10 seconds after opening the app.
How it simplifies: Removes steps in the pizza ordering process.
Active Recommender: Personal Shopper
What it is: A browser-based digital assistant that provides personalized
recommendations for online
shoppers.
How it recommends: Provides personalized recommendations based on
consumers’ natural language inputs.
Source: CEB Analysis

DigitalExperienceInnovations(2)
Passive Recommender: Erica
What it is: A virtual financial advisor that helps consumers manage their money.
How it recommends: Uses a conversational artificial intelligence (AI) platform to
send proactive money management alerts.
Active Recommender: Personal Shopper
What it is: A mobile “companion” that answers consumers’ questions about
products, services, and facilities.
How it assists: Uses AI capabilities to provide in-store informational assistance to
consumers..
Source: CEB Analysis

Calltoaction
— With the telecom journey for most consumers now starting with digital, consumers wish for effortless
digital simplicity from their providers.
— The challenge for operators is to simplify the purchase process, bring about greater transparency on
usage and assist consumers navigate their way through this complexity by meeting the evolving needs,
demands and expectations of consumers.
— Not doing so would cost them consumer loyalty and advocacy

Treat gigabytes
as currency
Globally, smartphone users are left with an average 31GB of unused
data over a year, enough to stream 6 seasons of Game of Thrones, or
1.5TB over a lifetime.
1 in 4 in Indonesian smartphone users consume significantly less data
than they have purchased. On an average of ~20,4 GB of mobile data
is left unused by a smartphone user per year in Indonesia. Smartphone
users in Indonesia are leaving more than 1 TB of the data they have
purchased unused, over their lifetime.
Consumers want to treat unused gigabytes as they would extra
money:
— Save it for future use
— Trade it for rewards or freebies
— Share it with family or friends
— Give it as a gift
On average, around one in two in Indonesian smartphone users
believe it can be used in different ways like real money, for example, to
save, trade or give as a gift
Assumptions: Average life expectancy of 50 years and that users continue
to buy the same plans as today over lifetime. While usage increases every
year however that can be offset by larger plans being offered by operators
implying wireless waste will still exist.

Mobiledatapurchasedvs.
unused permonthbya
smartphoneuser
Treat gigabytes as currency
>50%unused30–50%unused<30%unused
Argentina
Brazil
China
Egypt
France
Germany
Indonesia
Ireland
JapanMexico
South Korea
UK
US
Globally
0
1
2
3
4
5
6
7
8
9
10
0 2 4 6 8 10 12 14 166.6
2.6
Mobile data purchased per month (GB)
Mobiledatathatisleftunusedpermonth(GB)
Base: Smartphone users on plans with data caps in App
Annie panel reporting mobile data usage in July 2017
Source: Ericsson Consumer & IndustryLab, Towards a 5G
Consumer Future, 2018
On average,
smartphone users
globally with capped
data plans have
40 percent of their
data allowance as
unused by the end
of the month.

Consumerswishtotreatgigabytesas
money
Base : Indonesia
%
%
%
The more heavy-user the subscriber is, the more he is to believe ‘
DATA is a CURRENCY’.
Users who believe Data is a Currency
(Per User-group)
(Per Country)
65%
52%
50%
44%
43%
43%
Power users
Video Centric Users
Utility Users
Light Data Users
Browser Centric Users
Social Network Centric Users
Source: Ericsson Consumer & IndustryLab Towards a 5G Consumer Future
study, 2018
Believe that Gigabyte is a currency that
can be saved, trade and given as gift!

Calltoaction
— Supersized smartphone data plans while giving consumers peace of mind from overages also lead to
unused mobile data left over by the end of the month.
— Increasingly consumers are realizing this and expect operators to offer ways in which they can utilize
this unused mobile data as actual currency.
— Consumers would like to save, get refund, share or gift this data. The reward for offering the ability to
roll over data which is equal to saving data or to build a data pool is loyalty.
— A savings account full of data will be hard to leave behind – which a consumer needs to do if he/she
switches providers. It’s also considered fair to be able to keep data once paid for.

Offerusmorethanjustdatabuckets

Consumers want a personalized data plan
based on their unique needs.
Smartphone users can be classified into six
segments based on usage patterns.
Offer us more than
just data buckets
Video-centric users are two times more likely
to value inclusive video content as well as
the ability to stream video without using data
allowances when selecting data plans.

Offer us more than just data buckets
31%
11%
9%7%
7%
5%
5%
4%
4%
4%
3%
3%
3%3%2%
Highest internet speeds
Roll over of unused data to next month
No Penalty for exceeding mobile data allowance
Social media doesn’t consume mobile data
No binding contract
Free subscription for video on demand services
included e.g. Localize examples Netflix, HBO, Sky
sports etc.
Amount of SMS and Minutes included
Unlimited Video streaming in standard definition
quality without using data allowance
Use your mobile phone as a Wi-Fi hotspot
Freedom to adjust data plan up and down each
month
Relative importance (%) of attribute when
selecting a new mobile data plan
Source: Ericsson Consumer & IndustryLab Unlimited 5G future study, 2018
59%
11%
3%
4%
1%
2%
2%
3%
2%
3%
2%
2%
4%1%2%
Global Average Indonesia
The top three features that Indonesian
smartphone users value in data plans are
Highest internet speeds, Roll over of un-used
data to next month and Social media doesn’t
consume from mobile data plan.
Relative importance of features when
selecting a new mobile data plan
(percent)

Smartphone user segments and features
preferred in a mobile data plan
Offer us more than just data buckets
Base: All smartphone users aged 15–65 across Argentina,
Brazil, China, Egypt, Finland, France, Germany, Indonesia,
Ireland, Japan, Mexico, South Korea, the UK and the US
Source: Ericsson Consumer & IndustryLab, Towards a 5G
Consumer Future, 2018
Quality Flexibility
Mobile–video service convergence
Bucket innovation
Power users
Video-centric users
Browser-centric
users
Free video
subscription
Internet speed
Unlimited HD
quality video
Unlimited SD
quality video
Possibility to
add devices
TV/video
from operator
Free music
subscription
Free SN
included
Social media-
centric users
Wi-Fi hotspot
Utility-centric
users
Share
data
Amount of SMS
and minutes
Adjust plan up
and down
Light data users
No penalty on
exceedingMonthly
rollover
No
binding
Light data user are 1,5 times more likely to
prefer ‘’voice minutes included’’ as well as
for ‘’no binding contract’’
Social centric user are two times more
likely to prefer zero rated plans where
‘’Social media does not consume data
allowance’’
Power users are 3 times more likely to look
for ‘’unlimited streaming capability’’ as well as
‘’zero rated social media and music’
Video-centric users are 2,5 times more likely to
look for ‘’inclusive video content’’ as well as
‘’unlimited streaming capability’’
Browser centric users are 1,5 times more
likely to prefer plans that help avoid penalty
when exceeding data allowances
Utility-centric user are 1,5 times more
likely to look for ‘’the possibility to add
additional devices to their existing plan
without additional fees’’

Calltoaction
— Consumers buy mobile data bucket plans because that’s how operators sell them today.
— Consumers expect operators to go beyond data buckets and enrich the plans with aspects they value
most.
— While speed and fair policy constitutes half of all importance in selection of a new data plan, the long
tail of attributes that consumers wish for in their plans implies that one size does not fit all.
— “Unlimited” does not mean the same for all users or all devices and objects connected to a network.
— Operators should instead consider how data plans work for specific users and in the context of the
devices and services they connect. The new frontier for carrier data bundles is mobile-video
convergence.

Awarenessof5Gglobally
0%
10%
20%
30%
40%
50%
60%
Total China South
Korea
US Brazil Finland Mexico Germany Indonesia France Ireland Japan UK Argentina Egypt
Very familiar - I would feel comfortable explaining it to others I’ve heard/read about it and have basic knowledge about it
4 in 10 of the smartphone users in Indonesia are aware of the term 5G with 1 in 10 being confident to
explain this
Source: Ericsson ConsumerLab Towards a 5G Consumer Future study, 2018

Consumersexpectmorefrom5G
2%
2%
4%
2%
4%
5%
15%
16%
10%
10%
32%
2%
4%
4%
5%
5%
6%
10%
13%
13%
13%
26%
Ability to connect almost any appliance or device at home
Guaranteed quality of experience
Enable high resolution video streaming without delay or buffering
Should enable better battery life on devices
Better responsiveness and no delays to content
Enhanced security for personal data
Better reliability when compared to 3G/4G
Will provide less expensive price plans
Better outdoor and Indoor network coverage
Should have speed better than Wi-Fi networks
Should be many times faster than 3G/4G
Most important expectations among smartphone users from a technology like 5G
1 in 3 of the smartphone users in
Indonesia have expectations beyond
speed, coverage and low prices from 5G
Market Average
Global Average

5Gconsumerusecasestested
— Interest in services enhanced and enabled by 5G
— Willingness to pay
— When do consumers think these will be widely adopted?
5G Early
Alarm
Systems
Sensors as a
service
Real Time
Translation
Hearables
Massive MTC
Self Driving
Technology
Tactile Virtual
Shopping
Critical MTC
Drone delivery
AR streaming
for vehicles
Connected
Robots
Live immersive
gaming
Athlete & Arena view
Gigabytes in
seconds
Enhanced MBB
3D hologram
calling
VR Cinema
LOW COST, LOW ENERGY
SMALL DATA VOLUMES
MASSIVE NUMBERS
ULTRA RELIABLE
VERY LOW LATENCY
VERY HIGH AVAILABILITY

Note:
Bubble size = Willingness to buy
InterestLevels
Self- driving technology
Real time AR for vehicles
VR Cinema
Live immersive gaming
Athlete &
Arena View
Gigabytes in seconds
Home sensor
service
Connected robot
Virtual tactile shopping
Drone delivery
Real Time Translation
5G Early Alarm system
3D Hologram calling
LowAverageHigh
Within 5-6 yearsWithin 3 – 4 yearsWithin 1-2 yearsWithin a year
Base: Smartphone users aged 15-65 in Indonesia interested in 5G services
Consumerspredictthat5Gserviceswillgo
mainstreampost2-4yearsoflaunch

Consumers predict- paying by each gigabyte
consumed will be a thing of past
15% 15%15%
13%
33%
28%
34%
31%
4%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Very familiar Just heard of term
Pay for exact amount of gigabytes consumed Buy fixed volume of data
Pay for each device/sensor rather than gigabytes pay for a service and not gigabytes consumed
Not sure/Can’t say
Two third of the smartphone users who are familiar
with 5G rather pay per device/service than based
on volume of data consumed.
Awareness vs Preferred
Payment Model for 5G
services- Indonesia

Calltoaction
— While consumers are excited about possibilities with 5G and even willing to open their wallet for it they
also expect the vision set by previous wireless technologies to be fulfilled first.
— The challenge for 5G would be to keep up with demands of early enthusiast who expect much more.
— The move towards unlimited plans or perhaps creating a sense of unlimited could be a savvy move by
carriers as the future 5G transition begins as consumers do not see themselves paying per gigabyte but
instead an unlimited future.

Ericsson.com/Consumer & IndustryLab

5G for consumers - digital day

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