Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.
April 24, 2019
AT&T's CEO suggested that the telco may someday offer 5G services at different speeds for different price points, as the company currently does with its wired network.
"I would be very surprised if, as we move into wireless, the pricing regime in wireless doesn't look something like the pricing regime you see in fixed line," AT&T CEO Randall Stephenson said today during the operator's quarterly conference call with analysts. "If you can offer a Gig speed, there are some customers that are willing to pay a premium, or 500 Meg to a Gig speed, and so forth. So I expect that to be the case. We're two or three years away from seeing that right now from a 5G standpoint."
AT&T charges $70 for 15GB per month of 5G data in the handful of cities where it's offering 5G NR services, though the carrier is only offering 5G to "select" customers. Verizon, meantime, is charging an extra $10 per month for unlimited 5G NR services in the two markets where it's offering service. Sprint hasn't launched its mobile 5G service yet, but the operator's executives have hinted that the provider will likely charge extra for 5G speeds.
Meantime, T-Mobile has said that it won't charge a premium for 5G when it launches the service.
Stephenson's comments around 5G pricing were part of a much broader look that various AT&T executives offered into the company's overall 5G rollout and long-term outlook on the wireless market.
From '5G E' to FirstNet
Specifically, Stephenson referred to AT&T's decision to change the "LTE" signal indicator on some of its phones to say "5G E" instead of LTE. "Our competitors hate it," Stephenson said. "But it's having exactly the effect that you want it to have. Our customers see this tag and they go do a speed check and they're seeing 80, 90, 100, 150 Meg speeds, depending on where they are. It is truly a step change difference in the product capability. And it's having exactly the effect we had hoped. And so of all the areas where I look at right now and say I'm pleased with, this is the No. 1 area that I am most pleased with."
But AT&T's move to change its LTE indicator -- however controversial it may be -- is just a first step in the provider's overall transition to 5G. Another major element of the operator's efforts centers on AT&T's work to deploy FirstNet's 700MHz spectrum nationwide -- as AT&T adds that spectrum to its towers, it is concurrently installing 5G equipment there as well. AT&T plans to launch 5G nationwide on sub-6GHz spectrum by early next year.
"We're well ahead of schedule" on the FirstNet buildout, said AT&T CFO John Stephens during the operator's quarterly conference call. He said AT&T is 53% finished with its FirstNet network buildout efforts and expects to pass the 60% threshold by the end of the third quarter.
You're invited to attend Light Reading’s Big 5G Event! Formerly the Big Communications Event and 5G North America, Big 5G is where telecom's brightest minds deliver the critical insight needed to piece together the 5G puzzle. We'll see you May 6-8 in Denver -- communications service providers get in free!
The analysts from Wall Street research firm MoffettNathanson cheered AT&T's FirstNet actions. "They’ve got a good story to tell around FirstNet, which is helping lower costs and capital spending (through sharing), improving network performance (by providing additional capacity), and attracting new subscribers (from within the first responder community)," the analysts wrote in a note to investors.
Indeed, AT&T in the first quarter reported a total of 570,000 FirstNet subscribers, and Stephens noted that each FirstNet subscriber is bringing an average of two family members to AT&T due to the operator's FirstNet bundles and discounts.
While AT&T's Stephenson and Stephens discussed the nuts and bolts of the operator's 5G efforts, AT&T's CTO Andre Fuetsch offered a longer-term view of the provider's network operations during a separate appearance at the Brooklyn 5G Summit this week. Fuetsch said AT&T transmits 253 petabytes a day of traffic on its network, and that fully 57% of that traffic is video. "We're all about a video-centric network," he explained, pointing to AT&T's decision to acquire Time Warner.
And Fuetsch described AT&T's mobile 5G network launch as a "Herculean effort" geared toward creating a network that can handle customers' video and data demands.
AT&T's 5G wants and needs
But Fuetsch said there are three areas in 5G where AT&T is looking for additional support. First: "We really have to get much more advanced in the modeling and simulations that we do," he said of 5G operations in the millimeter-wave spectrum. Fuetsch explained that the operator is working to deploy 5G services in its 39GHz millimeter-wave spectrum, but he said that is difficult considering the technology is so new it's unclear how those transmissions will work in a real-world environment. Thus, Fuetsch said AT&T needs better modeling technology to plan out its 5G buildout.
Fuetsch also said AT&T needs more help in the site acquisition and deployment process. "We have got to improve this part of the process," he said of obtaining local approvals to install new network equipment like small cells. "This is really hard to do."
Finally, Fuetsch said AT&T needs more open ecosystems, including in the Radio Access Network (RAN), partly because such an approach is "going to drive the economics in the right direction."
But Fuetsch said AT&T and its partners in the ORAN Alliance are making progress on this topic. Indeed, he pointed to AT&T's announcement today that it and Nokia submitted seed code for an open 5G RAN Intelligent Controller (RIC) to the Linux Foundation, to officially release it into open source.
AT&T's network updates coincided with the release of the operator's earnings. In its wireless business -- which accounts for 39% of AT&T's consolidated revenues -- service revenues grew 2.9%. The operator reported 179,000 postpaid smartphone net adds in the US and 80,000 postpaid phone net adds.
"Mobility offered a pleasant surprise as the postpay phone additions were in stark contrast to where the Street was looking and resulted in service revenue and EBITDA growth y/y," wrote the analysts at Wall Street research firm Wells Fargo Securities in a note to investors.
But the analysts at MoffettNathanson offered a more pessimistic take on AT&T's mobile results in the first quarter: "Notwithstanding the FirstNet benefits, they are still losing subscribers (despite headlines to the contrary) and, despite the best competitive backdrop in years, revenue and EBITDA growth are still painfully low."
Overall, AT&T reported that revenues grew to $44.8 billion, up from $38 billion in the year-ago quarter, and that its operating income was $7.2 billion, up from $6.2 billion in the year-ago quarter.
Editorial Director, 5G & Mobile Strategies, Light Reading
Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.
You May Also Like
Rethinking AIOPs — It's All About the DataMar 12, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Fiddling with Fixed WirelessMar 21, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Cable and 5G: The Odd Couple?Apr 18, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Delivering the DAA DifferenceMay 16, 2024