2021 will be the second year in the Coronavirus pandemic, and operators have spent a lot of time over the past 12 months adjusting their strategies in line with the new normal. 2020 required a steep learning curve, and while it was hailed as the year of 5G, it will be in 2021 we finally see 5G take center stage. In fact, we are in the midst of an upgrade supercycle, which is set to revive both the global smartphone and secondary device markets.
#1: 2021 is finally the year for 5G
Biju Nair, EVP
& President, Global
Trade-in & Upgrades
(HYLA) Assurant
Inc.
2021 will be the year that 5G starts living up to its hype - for real this time. Of course, this is a promise we are familiar with; 2020 was heralded as the year of 5G, but it proved to be too soon.
The pandemic had a surprising effect on the number of 5G users; instead of slowing down 5G roll out, it made it easier for carriers to expand their networks faster. Rollouts have been accelerated in the U.S., China, U.K, and South Korea amongst others. According to a report by Ericsson, it was expected that 1 billion people would be in a 5G coverage area by the end of 2020. New 5G devices were also launched, which saw strong phone sales in the last quarter of the year.
5G is now ready to take its place in the spotlight as coverage gets better, and speeds become faster. 5G is the innovation for which consumers have been waiting. In fact, a recent study found that 63% of consumers are interested in upgrading to 5G. This clear consumer appetite for 5G devices means operators should be creating compelling 5G upgrade offers, using trade-ins as a vehicle to attract new customers, maintain loyalty, and try to offset the financial impact of the pandemic.
#2: Offers and promotions are well placed to drive the super cycle
These trade-in offers from operators, retailers and OEMs will be key to driving the 5G upgrade supercycle. The upgrade frenzy fuelled by these offers started in late 2020 and is expected to continue through the first half of this year, as consumers target the latest available smartphones to take advantage of faster speeds and increased bandwidth from the widespread availability of 5G networks.
The opportunity for operators, retailers, and OEMs to unlock the latent value in pre-owned devices and pass it back to consumers as credit towards new devices makes new smartphones more affordable and helps accelerate upgrade cycles, while lowering the customer acquisition costs. But this upcoming upgrade supercycle will not only enable operators to drive revenues through the sale of new devices it will allow them to take advantage of the ever-growing secondary device market. Operators who have deployed trade-in as mechanism to incent customers to upgrade have also experienced record high post-paid subscriber adds and historically low level of subscriber churn. Extending the lifecycle of pre-owned devices and re-selling these devices help operators, OEMs and retailers maintain their commitment to sustainable, responsible practice and continues to drive a lucrative circular economy.
In 2021 the mobile ecosystem will be looking at ways to recover from the financial hit of the global pandemic and build on the strategies put in place last year. As 5G takes its much-anticipated place in the spotlight, operators have an opportunity to make compelling 5G upgrade offers that not only drive the upgrade supercycle, but also allow them to drive revenue growth that will be key to their recovery - along with realizing their investment in 5G.
