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Consumers fail to see value of 5G, Deloitte study finds

By Catherine Knowles
Thu 14 Nov 2019
FYI, this story is more than a year old

While 5G presents many opportunties for businesses, consumers are sceptical of the benefits of 5G, according to Deloitte's latest Mobile Consumer Survey.

Up to 84% of respondents said they were not prepared to pay the $15 premium operators are proposing for 5G, indicating that telcos need to better communicate the value of the upgrade to consumers, Deloitte says.

Deloitte Partner and National Telecommunications lead Peter Corbett, says 5G is a feature most people simply don't understand. There was a clear business case for 4G consumers - they wanted faster download speeds to stream content. For now consumers are more focused on a reliable network, rather than a faster one, posing a real challenge for the marketing and adoption of 5G, Corbett says.

"Consumers should prepare to be disappointed with 5G in the short-term, as the network will experience growing pains until it is fully established which will come with small-cell deployments and the auction of mmWave in early 2021.

"We have also seen a drop in the hype consumers are experiencing with 5% fewer people looking to switch to 5G when its available or upon hearing good things in 2019 vs 2018. We are probably entering a period of disillusionment with the technology until it becomes clearer for consumers on how 5G will improve their day-to-day lives," says Corbett.

Deloittes Mobile Consumer Survey, now in its sixth year in Australia, is a multi-country study of mobile phone users around the world. It examines how consumers interact with the device that completely dominates our lives, exploring current and future trends.

"Mobiles are increasingly helping us manage our health, but they might also be hindering it. We've reached an ironic point with our digital devices were using technology to help us detox from technology. Which in turn is making us more tethered to our devices," Corbett says.

Up to one in four Australians are using their mobile to monitor their health and wellbeing, with an increasing number of mental health related apps targeting early detection and symptom management. However, with this improved help, people have also developed more reliance on our phone.

The survey found that respondents who perceive they use their phones too much are four times more likely to not go to sleep when intended to, and five times more likely to feel anxious or stressed without their phone. And nearly 15% of respondents claim they experience physical pain as a result of overuse. But this year, 60% of people are trying to limit their mobile phone use, up from just 38% last year.

When it comes to specific actions taken to limit use, 28% are turning sound off, 27% are turning their phone off, 23% are turning their notifications off, and 14% are using do not disturb. Screen time trackers are being used by 12% of Australians who identify as over-users, with 76% of that group finding these newer services useful.

When it comes to purchasing, mobiles are the fastest growing device for eCommerce payments, with 24% of respondents now using their mobile as their preferred device for online purchases, overtaking desktop computers for the first time.

Deloitte Consulting Partner, Kate Huggins, says, "The 25-34 age group is leading the pack for adopting mobile as the preferred device for online purchases, with more women using it than men. The top three purchases from our devices are tickets for events, travel or holiday purchases and clothing.

"But were not just buying online mobile is becoming increasingly popular in-store with the rise of tap and go payment options, fuelled by biometric functionality. 58% of respondents have used their mobile as an in-store payment method, up from 26% last year."

The survey also found that many think their smartphones knows too much about them, but few are restricting how much information they share with their device.

Deloittes 2019 Privacy Index indicated 65% of consumers cite trust as their number one consideration when granting an app permission to access personal information. However, only 13% of respondents did not share personal information, such as their address, photos and health metrics with companies online

"While data privacy concerns continue to grow, we're seeing devices continue to evolve their security features to zero-in on a persons identity, Huggins says.

Fingerprints and facial recognition methods have significantly increased. 12% of Australians are now using facial recognition to unlock their phones, and 40% use fingerprints.

The use of fingerprints to authorise purchases and money transfers is also increasing, and is highest in the 18-24 and 25-34 age brackets, growing to 23% and 25% respectively over the last two years.

"As more of our personal lives are captured in our mobile phones, the more we care about keeping them private," says Higgins.

Furthermore, consumers are holding onto their devices for longer, forcing manufacturers to continue raising the bar and turning to innovation in a bid to pique consumer interest.

Smartphone penetration has grown from 76% to 91% over the past six years, with Australians aged over 55 based in Western Australia and Queensland the last cohort to jump on board. Consumers are owning their smartphone around 3.5 years on average, up from three years in 2017.

"We've seen that premium manufacturers are still favoured, with Apple and Samsung holding 40% and 36% market share respectively. However, we may see a shift if Samsung, LG and Oppos early move on 5G-enabled handsets pays off," says Huggins.

"It's clear that consumers are not seeing tangible benefits of new upgrades with around 50% of consumers on a smartphone that was launched in 2016 or earlier. We are perhaps seeing Australians doubling down on accessories, with the ownership of wearables like smart watches and fitness bands on the rise, up 43% over the past five years," Huggins says.

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