The COVID-19 pandemic confirmed just how dependent we are on connectivity. And although we are not yet in the clear from the pandemic, plans are in place to ensure economies can bounce back and markets can grow again. 5G adoption will be central to this recovery in all sectors. But to use ‘true’ 5G, not only does the network need to be in place, but users will also have to upgrade to 5G handsets.
5G’s role in COVID- 19 recovery
5G not only provides ultra-fast, ultra-low latency connectivity for consumers, it also transforms the business landscape—as people continue to work remotely, they will look to 5G as an enabler. Businesses will turn to 5G to unlock new revenue streams, while governments will see 5G as an accelerator to rebuild economies. In fact, according to research from Boston Consulting Group, it’s estimated that over the next decade, 5G deployment will contribute $1.4 trillion to $1.7 trillion to US GDP, and create 3.8 million to 4.6 million jobs.
But for consumers to access 5G, they need more than a 5G network—they also need a 5G-enabled device, which for many are cost-prohibitive. Carriers need to continue their focus on putting 5G devices into the hands of consumers, affordably, to realize their return on investment for the infrastructure build-out.
The secondary device market and 5G adoption
Although there is huge revenue potential for enterprise 5G, that revenue is still some way off—which means today, carriers need consumer adoption on their 5G networks. Without consumers buying 5G devices and accessing the latest products and services on the network, carriers are unable to generate 5G revenue and see a ROI on the high costs of 5G deployment.
Mobile device trade-in programs have proven to be a way for consumers to reduce the cost of a new 5G device by unlocking the latent value of their previous 4G device. Extremely attractive trade-in promotions launched towards the end of last year and continuing into 2021 have helped to accelerate upgrades. And, as more viable use cases are developed for 5G devices, consumer adoption will continue to ramp up.
For many consumers still using a 4G phone, a trade-in program may be their only route to accessing a 5G device, so it’s up to operators, OEMs, retailers and cable operators to recognize this and drive these programs forward. Assurant has seen a very strong correlation between high attach rates on trade-in programs to increased net adds and increased Net Promotor Score, as an indicator of consumer satisfaction.
Not only do trade-in programs offer a route to 5G for consumers, but they also provide a path to extending the useful life of their old devices within the circular economy. The old device that’s traded in can be refurbished and resold, often in an emerging market. This means that not only does one consumer get an upgrade to 5G, but another consumer may also find an affordable upgrade route to 4G. Moreover, by re-purposing the device within the ecosystem, you keep it from being sent to a landfill to become e-waste— simultaneously helping the economy and the environment.
The importance of trade-ins
5G is important for global recovery post COVID-19 due to the economic and social benefits it promises. The only way to access 5G is with a 5G-enabled device, which tend to be more expensive—but the pandemic has caused financial constraints for many consumers. Mobile device trade-in programs are an excellent way to diminish the cost-barrier to 5G, all while keeping an old device within an environmentally friendly circular economy.
The more 5G devices operators can get into the hands of consumers, the faster they can generate 5G revenues and continue 5G expansion. This will in turn boost global economies and aid the pandemic recovery process. Ultimately, mobile operators, OEMs, retailers and cable operators need to continue to promote and incentivize trade-ins or risk stalling 5G adoption.