Demand forecasting for the 5G service market considering consumer preference and purchase delay behavior

• Published in: Telematics and informatics Vol. 47; p. 101327
• Main Authors: Maeng, Kyuho, Kim, Jihwan, Shin, Jungwoo
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.04.2020; Elsevier Science Ltd
• Subjects: 5G mobile communication; 5G service; Commercialization; Communication; Computer simulation; Conjoint analysis; Connected vehicle; Consumer preference; Consumers; Delay; Diffusion rate; Economic forecasting; Internet of things; Logit models; Purchase delay; Willingness to pay; Internet of things; Consumer preference; Connected vehicle; Conjoint analysis; Willingness to pay; Purchase delay; 5G service
• ISSN: 0736-5853; 1879-324X
• DOI: 10.1016/j.tele.2019.101327

•We analyze 5G services’ demand considering consumer preference and purchase delay behavior.•Consumers have a high heterogeneity for the attributes of 5G services.•Data transmission rates and data offers are the important factors for 5G diffusion.•The main reasons purchase delays of 5G services are cost and lack of need.•By consideration of the purchase delay, the acceptance rate of 5G service decreases by 50% more. Unlike previous mobile communications technologies that centered on service subscribers, 5G mobile communication (5G) is expected to converge with various industry fields such as transportation, manufacturing, and construction, thereby stimulating innovation and generating significant ripple effects. At a time when 5G commercialization is incipient, it is necessary to understand mobile communication service users who are likely to be important initial users for the creation and diffusion of 5G services. The current study analyzed consumer preference for 5G services based on conjoint survey data and a mixed logit model, and we conducted a market simulation based on the estimation results to determine the impact of 5G technology development on the 5G market, specifically regarding the mobile communication fields. In addition, this study derived consumer purchase delay factors for 5G services using an ordered logit model. The results show that consumers delay the adoption of 5G services mainly because of the cost and lack of need. By considering the consumer purchase delay, it is estimated that the acceptance rate of 5G services by consumers will decrease by more than 50%; this is because it is hard to conclude a purchase delay of more than one year leads to an actual purchase. The results of this study suggest important strategic implications that are likely to reduce the purchase delay of consumers, improve the actual adoption rate, and increase the diffusion of 5G services.