Will 5G Be a Cord-Cutter's Dream?

Dan Jones
8/22/2018
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Will 5G provide a wireless renaissance for pay-TV cord cutters? US mobile carriers are planning to spend billions in the coming years in the hope that it will.

In the spring, analysts at MoffettNathanson LLC reported that around 13.5 million US households have already abandoned traditional pay-TV services, a decision known as 'cord cutting.' Now operators such as Verizon Communications Inc. (NYSE: VZ) and the "new" T-Mobile US Inc. (in combination with planned spouse Sprint) could soon boost that number further by offering 5G-based wireless broadband services good enough to meet household, high-definition video consumption demands. Verizon has said it wants to pass 30 million homes in total with its fixed wireless 5G deployment, while T-Mobile expects around 10 million in-home residential broadband devices to be sold in its first few years of 5G service. (See Verizon Says 'Up to 5' Fixed 5G Markets Will Go Live in 2H18 and T-Mobile: 5G Lets Us Take Broadband Across America .)

The logic of 5G-driven cord-cutting is that mobile operators are promising downstream broadband speeds of 100 Mbit/s minimum, and up to 1.2 Gbit/s, with 5G. This should be more than enough bandwidth to support multiple HD streams into a home, taking mobile operators into prime cable company territory. Bandwidth requirements for the average household may increase in time as virtual reality applications become more mainstream, but in the early years of 5G, "enhanced broadband" will be the focus and that will be enough for the mobile operators to pitch to potential cord-cutters.


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And they stand a good chance of getting consumers' attention. According to a recent report published by Cable, based on data collected by M-Lab, the average broadband downstream speed in the US during the 12 months to the end of May this year was 25.86 Mbit/s. Furthermore, the Federal Communications Commission (FCC) said recently that it intends to keep the fixed broadband definition capped at just 25 Mbit/s downstream and 3 Mbit/s upstream. So you can see how residential 5G might be an attractive alternative to fixed broadband.

T-Mobile will attempt to roll out 5G nationwide with a 600MHz low-band service that will prioritize coverage over gigabit speeds. For its part, Verizon will target dense urban areas first with very fast millimeter-wave broadband speeds, but coverage from each 5G cell site will be little more than a city block.

One question the US mobile operators haven't yet addressed is how much they will charge for monthly 5G service. In a post-Net Neutrality world, there's a lot of room for operators to be creative in the packages they put together. With network slicing, it could become easier to get subscribers to pay more for faster downloads or to guarantee quality of service for more latency-sensitive gaming services.

One issue is that cord cutters seem to want to limit the amount they spend on entertainment and connectivity at around $100 a month. But, of course, mobile operators could cut deals with streaming services such as NetFlix and Hulu to sweeten the pill and attract new subscribers.

Thus, the pieces my be falling into place for mobile operators to take on the cable companies with a wireless alternative to a traditional broadband-plus-TV bundle. The coming months should tell us whether 5G-inspired cord-cutting carnage is set to sweep the US market.

— Dan Jones, Mobile Editor, Light Reading

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DanJones
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DanJones,
User Rank: Blogger
8/23/2018 | 10:37:09 AM
Re: 5G is a new cord
Price is the key to all this for sure
FastCache
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FastCache,
User Rank: Moderator
8/23/2018 | 2:31:15 AM
5G is a new cord
Many service providers have announced that they intend to use 5G wireless for the last drop into homes.   In this sense 5G can also claim to be the new 'cord'.  There are already some markets where households are using 4G mobile broadband as an alternative to broadband services delivered over copper.  As usual it all comes down to pricing and customer experience as to what flies in the market. 
Michelle
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Michelle,
User Rank: Light Sabre
8/22/2018 | 1:41:01 PM
doubtful
I'm a little weary of such proclamations. Wireless companies are still throttling and charging high overage fees. How will they structure 5G access?
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