5G and Beyond

Verizon kills plan to charge $10/month for 5G

Verizon no longer appears to have any plans to eventually charge an extra $10 per month for its high-end 5G service.

The operator first floated the charge early last year, but quickly waived the proposed fee. Now, in its latest 5G pricing plans, Verizon is simply offering the service at no extra charge, without any stipulations about a possible $10 per month fee in the future.

The collapse of Verizon's attempt to charge extra for 5G doesn't come as much of a surprise. No other provider in the US – including Verizon's own MVNO partners – is charging extra for 5G.

However, the development has significant implications for the 5G sector in general because it means operators cannot make any extra money from 5G when selling it for consumers' smartphones, despite the money they're plowing into deploying the technology. Instead, the much-touted service – Verizon still calls 5G the "fourth industrial revolution" – is now simply listed alongside unlimited texting and cloud storage as one of the many features of Verizon's mobile service.

Executives from operators including Verizon have said they believe they will derive additional money from 5G via sales to enterprise customers.

Tracking Verizon's $10/month plan
Verizon first said it would charge an extra $10 per month for 5G in March of 2019, when it first launched its commercial mobile 5G service. But it quickly backtracked on that plan in April of 2019 when reviewers balked at its miniscule 5G coverage area. Verizon's Tami Erwin told The Wall Street Journal that Verizon would waive the fee for an undetermined period of time "to give customers time to experience and understand 5G."

Verizon reiterated its plan to charge $10 per month extra for 5G almost exactly a year ago when it first introduced its "Mix & Match" plans. The carrier did impose a $10 surcharge on its cheapest plan, dubbed "Start Unlimited," and said it would add that fee to its other high-end plans.

"5G access included with a 5G phone," the operator noted at the time of its "Do More Unlimited," "Play More Unlimited" and "Get More Unlimited" plans. "Limited time offer. $10/mo value."

And Verizon's CFO Matt Ellis appeared to double down on the fee in March. "When you deliver a differentiated service, you can get a differentiated price point," he explained.

But in Verizon's newest mobile pricing announcement, the operator makes no mention of the $10 per month fee for 5G on its high-end plans. "At this time, there is no charge for 5G Ultra Wideband," a Verizon representative wrote Monday in response to questions on the topic from Light Reading.

In fact, the operator explicitly states that its forthcoming nationwide 5G service will not cost extra. "All new Mix & Match wireless plans will support our 5G Nationwide network coming this year," the operator wrote in its release Monday.

Verizon has long promised to launch nationwide 5G sometime this year, likely in conjunction with the launch of the expected 5G-capable iPhone later this year. However, Verizon executives have sought to downplay expectations for its nationwide 5G service: "In the beginning, it's going to be small," Verizon's Hans Vestberg said in May, explaining that the operator's nationwide 5G service would initially launch with "some improvements" but would progress over time.

A question of spectrum
Verizon currently offers mobile 5G service only on its millimeter wave (mmWave) spectrum. Transmissions in such spectrum cannot travel more than a few thousand feet, but they can support blazing-fast download speeds. Verizon has said it will use Dynamic Spectrum Sharing (DSS) technology to expand its 5G signal onto other, lower spectrum bands that can cover much wider geographic areas. DSS is how Verizon will launch its "5G Nationwide network" later this year.

However, the drawback is that those lower spectrum bands cannot support the blazing fast speeds that mmWave transmissions can. "Finding the optimal and fastest 5G connection is like searching for a Tic Tac in a Target," wrote the Wall Street Journal Monday in a review of 5G connections in the US. "AT&T 5G test drive: Not the next-gen network we were promised," echoed an article on Android Authority.

Verizon will be the last major US operator to launch 5G nationwide. AT&T and T-Mobile already offer nationwide 5G on their own lowband spectrum holdings.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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