This year has already seen more than 14 telcos launch commercial 5G services globally, with launches concentrated in the US, Western Europe, developed Asia and the Persian Gulf.
Global adoption of 5G
GlobalData’s analysis of nine telcos’ device portfolios across these regions during June-July 2019, indicates that the availability of commercial 5G smartphones is still limited.
Through its analysis, GlobalData identified only eight commercial devices offered by the nine telcos in this period: the Xiaomi Mi MIX 3 5G, the LG V50 ThinQ 5G, the Motorola moto z4, the OnePlus 7 Pro 5G, the OPPO Reno 5G, the Huawei Mate 20X 5G, the ZTE Axon A10 Pro 5G, and the Samsung Galaxy S10 5G.
Furthermore, the smartphones on offer are still relatively expensive, with most of the models available globally retailing close to the US$1,000 mark, or over, when sold unbundled from mobile plans. This makes the cost of 5G devices significant, given they mainly target early adopters within the high- to mid-level market segments.
Pricing strategies to widen appeal
For a wider and quicker 5G services adoption, telcos need to lower the 5G smartphone adoption price barrier.
The graph below is an extract from GlobalData’s report, entitled 5G Commercial Use Cases Update & Telco Go-To-Market Strategies. The examples selected illustrate several commercial telco 5G smartphone pricing and bundling strategies at launch.
Sample of operator commercial 5G smartphone pricing and bundling strategies
As shown here, two strategies can be harnessed by telcos to bring down the 5G device adoption barrier – ie smartphone-bundles with manageable upfront costs and equipment instalment plans (EIPs) spread over one or two years. Telcos can also explore introducing own-branded smartphone models for entry-level market segments.
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