Recently, we looked at how much your mobile phone could be costing you, perhaps without you even realising. One of the things we touched on was how new technology is going to effect our monthly bills, including 5G.
5G is set for a wide release across the UK in 2020. We did highlight in our mobile phone article that sales across the industry, including in China, the world’s biggest smartphone market, are down. The release of the awesome technology is expected to rejuvenate the industry and provide the upturn it needs. Interestingly, reports show that 23% of iPhone customers would be willing to upgrade for a phone with 5G capabilities. As phones, especially those with the latest technologies can now cost £1000, it seems appropriate to assume that upgrading will be an expensive advancement in the future.
Many articles suggest that consumers upgrade their phone when new handsets or technology is released, such as when 4G was rolled out, simply because it is a status symbol or marker of wealth and position. Getting too caught up in that mindset could be quite dangerous, as we looked at in a study of luxury markets, consumers could be over-spending on items that they do not need to replace or upgrade which could be leaving them short of money for priority bills or encouraging them to take out costly financing like a payday loan because they have stretched themselves too thin.
Our guide aims to provide you with a comprehensive look at 5G and all the costs and considerations involved before you opt to upgrade for better bandwidth.
What Is 5G?
5G is set to be the next big thing in the mobile and data industry. As it says on the tin, 5G is to replace 4G for our mobile data technology, which is how our mobiles connect to the internet without a WIFI connection or ethernet cable. In theory, 5G could be up to 20 times faster than the premium 4G speeds that are available now. However, the current average 4G speeds work well below the fastest possible service. This means it would be safe to assume that 5G will also operate at a lesser speed but will still be faster than our current 4G service. Of course, this is not how it is being portrayed by network providers.
The interesting thing about 5G is that it will make your mobile data service faster, not more impervious or reliable. This means if you are looking to upgrade to the improved data roaming service because you struggle to get a signal at home because you live surrounded by high-rise buildings, this is not a guaranteed fix. 5G is still subject to the same quality-impairing factors as 4G, including density issues (wherein too many mobile connections will slow down your data), other microwaves and buildings.
Will It Make A Difference To You?
So, 5G is superfast mobile phone connection, but what does this mean for consumers. Firstly, it won’t make any difference if you do not have a 5G enabled handset. Although this is expected to be a normal practice for upcoming mobile phones, there are limited options currently available in the UK. Moreover, there are no 5G enabled handsets from the popular iPhone range. If you are looking to upgrade your phone and want to ensure you are futureproofing your purchase for the latest technology, you might consider investigating the phones that are already 5G ready, rather than upgrading twice. However, 5G handsets are considerably more expensive than standard mobile devices, but could prevent you from paying for the privilege twice.
5G is being gradually rolled out by different networks in different cities across the UK. As you would expect, 5G is currently only available in cities such as London, Manchester, Birmingham, Cardiff, Edinburgh and Belfast, but by the end of 2020, EE (the leading UK provider of 5G), expect it to be much more widespread. However, the network giant has not yet released whether or not it will be available UK-wide by the end of 2020. This might mean if you live and work rurally, you might not benefit from upgrading your package or handset yet, because the service will not be available to you, but you will still be fixed with the increased cost.
The Cost Of Data
Research shows that data usage is set to rise 720% between now and 2021, coinciding with the widespread release of 5G around the UK. It seems safe to assume that this huge increase in data usage will come with a price tag. The phone network, Three, released earlier this year that they will not be charging their current 5G customers any additional costs to use the improved data service. However, this may have limitations. Current packages for 5G enabled phones range anywhere between £40 per month (with a £99 upfront fee and limited data allowance) to £124 per month (with a £50 upfront cost but unlimited data allowance). These tariffs are for different handsets but do give an indication of how much you can expect your monthly bill to change with the advent of 5G. The average monthly spend on mobile phone contracts is £45.60, which indicates those who are looking at the top tier packages can expect to more than double their bill.
Another thing to consider is how older technologies become obsolete upon the advent of newer, faster alternatives. For example, the desire for a home phone has dropped since smart phone technology meant that calling costs from mobiles were cheaper and were able to utilise the internet. This may suggest to some that 5G technology, which in theory is available for laptops, smart TVs and other devices with a dongle, could replace our home broadband. This is because it may reduce the latency between clicks and the desired action which may lag in areas with standard broadband or during peak hours. There is little information as to how much this will cost at the moment.
As the current wave of 5G enabled smartphones, and indeed the data service itself is expected to be the models with ‘teething problems’ it could be worth waiting a while before upgrading if you are interested.
Here at Wizzcash, we understand the desire for upgrading your mobile phone, particularly to take advantage of new technologies that are going to make a difference to your day to day life. However, all consumers that are planning to upgrade their mobile should only be doing so if it is a bill they can realistically cover from month to month. For example, 14% of 18-24 year olds said that they exceed their monthly data allowance every month. Going over your allowance could mean a bill that you cannot afford and find yourself in a financial emergency. Wizzcash can provide emergency loans for those who need temporary financial help, but should not be considered a reliable source of financing. We encourage all customers to manage their finances and stick to a budget that suits them.