Device Financing Could Spur 5G Uptake

Trustonic survey reveals upside to increased 5G device security

Recently I came upon some interesting research from mobile technology company Trustonic, which has done customer survey work in three areas: the UK, Mexico and South Africa.

Digging through the data it was notable to see some trends relating to pent-up demand for 5G devices. Customers were asked if they planned to purchase a 5G-enabled device in the next 12 months and I was astonished to see that 48% of consumers in Mexico and 56% in South Africa indicated that they did.

Interestingly, this data aligns with an Ericsson survey that I’ve also been reading. As part of its ConsumerLab work, Ericsson asked Indian consumers about their intention to upgrade to 5G, and 67% said they would upgrade to 5G when it was available. This is a stunning number given that 5G services have not yet been launched in India. I can only assume that poor fixed-line infrastructure is a significant contributor to this strong interest, with 5G promising much faster speeds to access the Internet.

In contrast, it was striking that in the UK the percentage of consumers wanting to upgrade to 5G in the next 12 months was a mere 21%. This is slightly higher than a recent CCS Insight survey that revealed 13% of consumers who bought a new phone in 2020 did so to get 5G. It’s particularly surprising in light of the early network launches and strong operator promotions. However, given the prevalence of Apple and Samsung devices in the UK, I expect that many customers will end up upgrading to 5G by default rather as a purposeful choice.

Although 5G devices are rapidly becoming more affordable, with entry-level smartphone starting at $250 in most markets — and less in some cases — for many people it remains a substantial investment.

On this basis, the growing use of new finance options to support phone purchases seems destined to play a role in the wave of 5G growth. Trustonic’s survey revealed that 53% of South Africans, and 58% of Mexicans would consider getting a higher-specification phone or replacing their current phone with a smartphone if a finance or loan option were available.

However, this leaves us with one last piece of the jigsaw; how to ensure that customers don’t just sign up for finance and then disappear, particularly when the purchaser can only afford to make a relatively modest deposit? This is where the ability to lock a device becomes more important than ever. A good example of this approach is from HMD Global, the maker of Nokia-branded phones, which has been offering microfinancing to customers in sub-Saharan Africa who are looking to upgrade from a feature phone to a smartphone. Trustonic also offers a similar service, so it’s little surprise it wanted to share the survey data it had found on upgrades and financing.

One final thought is that there could be an added upside to increased security on smartphones to support financing. A staggering number of smartphones get stolen in locations like South Africa and Mexico. In fact, the Trustonic survey data showed that 53% of Mexican consumers have had their phone stolen, rising to a whopping 64% in South Africa. If the security software for financing can also make phones so secure that they’re not worth stealing, that could be a fruitful endeavour for all parties.