Investing in differentiated connectivity can boost telcos' revenue: Ericsson

Recently, telecom equipment maker Ericsson suggested in one of its reports that Indian telecom service providers invest in differentiated connectivity as consumers are willing to pay extra for it.

- RAKESH KUMAR

In simple terms, Indian telcos such as Reliance Jio, Bharti Airtel, and Vodafone Idea Limited (VIL) need to improve coverage at high-traffic locations such as stadiums, railway stations, airports, and concert venues, as consumers are willing to pay an additional 20% for better services. According to Ericsson, one in six 5G users is willing to pay an extra 20% on their monthly mobile bill for guaranteed connectivity at event venues. The report also mentioned that this move would give service providers a significant opportunity to increase 5G average revenue per user (ARPU) by 5-12%.

Jasmeet Sethi, head of ConsumerLab at Ericsson, emphasised that telecom companies globally have already begun adopting this strategy and are seeing a return on investment.

These companies are not targeting the mass market, which tends to prioritize affordability over quality. Instead, they are focusing on high-ARPU and postpaid subscribers, who are willing to pay more for a superior experience. "We need to adopt a similar approach in India," Sethi said. hi said.

In this article, we will explore what differentiated connectivity is and how it works.

What is differentiated connectivity?