India is on the brink of a technological renaissance. The convergence of 5G technology and the burgeoning use of Generative AI (GenAI) applications is not merely a fleeting trend but a transformative wave reshaping the digital fabric of the nation. The latest Ericsson ConsumerLab report, “Elevating 5G with Differentiated Connectivity”, sheds light on this phenomenon. It reveals that the rising use of GenAI apps is a pivotal factor driving heightened expectations for 5G performance in India.
As the world’s second-most populous country, India’s digital aspirations are monumental. The report underscores how GenAI applications are not just enhancing user experience but are fundamentally altering consumer behavior and expectations. This paradigm shift is catalyzing demand for reliable, high-speed connectivity, pushing telecom operators to innovate and adapt swiftly.
The Rise of Generative AI in India
Generative AI is revolutionizing the way Indians interact with technology. GenAI applications are infiltrating daily life. They range from AI-powered writing assistants that craft compelling narratives to personalized shopping bots that redefine online retail. Intriguingly, Indian users are at the forefront of this revolution. The report highlights that Indian users engage with GenAI applications at twice the rate of their U.S. counterparts. Specifically, 21% of Indian GenAI users today utilize more than four different GenAI apps on their smartphones, compared to just 8% in the United States.
But why is GenAI gaining such traction in India? One reason is the youthful demographic. With over 600 million people under the age of 25, India’s Gen Z population is tech-savvy and hungry for innovation. They demand more from their devices and networks, seeking seamless, responsive experiences that only advanced AI applications can provide.
Young Gen Z smartphone users are expressing a strong demand for more responsive AI experiences on 5G networks. Moreover, 67% of 5G smartphone users in India are expected to use GenAI apps weekly within the next five years. This signals an unprecedented shift in how users perceive and utilize their smartphones.
Transitioning from traditional smartphone features, the report reveals a significant shift in consumer priorities. A staggering 32% of Indian smartphone users now place AI-powered features above camera quality when choosing their next 5G-enabled smartphone. This underscores the growing importance of AI in shaping the smartphone experience, driving demand for higher performance from both devices and networks.
Moreover, the proliferation of AI applications is not confined to urban centers. The report indicates that Tier 3 cities are experiencing a surge in AI adoption, reflecting a nationwide embrace of technology. This widespread acceptance is fostering an environment ripe for innovation. Developers and tech companies are motivated to create solutions tailored to the unique needs of the Indian market.
5G Performance Expectations Soar
As GenAI applications become integral to daily life, the demand for robust 5G networks escalates. Users are no longer satisfied with basic connectivity. They require networks that can handle high data throughput. They also need low latency and consistent performance. The report shows that satisfaction rates among 5G users have jumped from 48% in 2023 to 57% in 2024, particularly in Tier 3 cities. This uptick is attributed to improved network availability and performance in previously underserved areas.
However, challenges remain. Sixty-four percent of users acknowledge issues with network quality in congested spaces like stadiums, airports, and tourist attractions. This dissatisfaction is driving consumers to seek alternatives. Notably, one in six users is willing to pay 20% more on their monthly mobile bills for assured connectivity during events. Therefore, 5G networks need to adapt instantly to rapidly shifting traffic patterns to meet this consumer demand.
To address these challenges, the report suggests that 5G deployment in India will shift focus. It is likely to move from mere availability to enhancing experience at key locations. This includes dynamically adapting networks to manage shifting traffic patterns. Networks ensure high-density areas receive the bandwidth necessary for seamless connectivity.
Additionally, the rise of GenAI apps and wearable devices is expected to reshape mobile traffic patterns in India. With applications like real-time 3D content generation and AI-enhanced video processing, uplink traffic is projected to surge. Ericsson’s report forecasts an industry shift toward semantic compression technology to manage this escalating traffic, particularly as augmented reality (AR) glasses and hybrid computing devices become mainstream.
Consumer Willingness to Pay for Assured Connectivity
The willingness of consumers to invest in better connectivity is a game-changer. The report highlights that around 40% of respondents are interested in reallocating 12% of their app spending toward elevated connectivity services. This signifies a substantial market for premium connectivity solutions.
Communication Service Providers (CSPs) have a golden opportunity to capitalize on this trend. By exposing Quality on Demand (QoD) network APIs to developers, CSPs can enable a new class of applications that offer premium, high-performance experiences. This not only satisfies consumer demand but also opens up new revenue streams for operators.
Furthermore, the data reveals that one in six 5G users is willing to pay 20% more for guaranteed performance at event venues. This is a clear indication that consumers value reliability and are prepared to pay a premium for it. CSPs can leverage this by offering tiered services that provide enhanced connectivity during peak times or at specific locations.
Jasmeet Sethi, Head of ConsumerLab at Ericsson, encapsulates this sentiment by stating, “As AI-powered applications become more prevalent, users’ expectations for enhanced 5G connectivity are rising. This signals an opportunity for CSPs to meet this demand through tailored connectivity experiences.”
The Road Ahead: Challenges and Opportunities
Looking forward, the intersection of GenAI applications and 5G connectivity presents both challenges and opportunities. The accelerated uptake of GenAI is expected to cause a steady increase in mobile traffic, beyond the baseline growth. This necessitates significant investment in network infrastructure to handle the increased load.
CSPs must navigate the complexities of upgrading networks while maintaining service quality. The implementation of semantic compression technology is one potential solution, enabling more efficient data transmission without compromising quality. Additionally, the anticipated launch of AR glasses and other hybrid computing devices will further strain networks, requiring proactive measures to ensure readiness.
The evolving consumer expectations also demand a shift in business models. Telecom operators need to move beyond traditional service offerings, exploring partnerships with developers and content providers to create integrated solutions. By offering differentiated connectivity, CSPs can not only meet consumer demands but also differentiate themselves in a competitive market.
Moreover, regulatory frameworks will play a crucial role in this evolution. Policymakers must create an environment that fosters innovation while ensuring fair competition. This includes addressing spectrum allocation, infrastructure sharing, and investment incentives.
Transitioning to a more consumer-centric approach, CSPs can focus on enhancing user experience at key locations and during peak times. This strategy will ensure that network performance meets the high expectations of modern consumers, fostering loyalty and long-term engagement.
Conclusion
India stands at the threshold of a new digital era. The rising use of GenAI applications is not just a trend but a transformative force reshaping consumer expectations and the telecommunications landscape. The demand for enhanced 5G performance is clear, and consumers are willing to invest in solutions that meet their needs.
Telecom operators, policymakers, and stakeholders must collaborate to seize this opportunity. By focusing on innovation, infrastructure development, and consumer-centric offerings, India can lead the way in the global digital revolution.
As the Ericsson ConsumerLab report illustrates, the future is not just about connectivity; it’s about creating an ecosystem where technology enhances every facet of life. The road ahead is challenging, but with strategic planning and investment, the possibilities are boundless.
