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OSS/BSS/CX

The summer of 5G may be a scorcher

Universal Studios Hollywood is opening up for full-capacity theme park operations. Guns N' Roses is going back on tour. And Anheuser-Busch is going to give every adult in the US a free beer on July 4.

America is celebrating a reopening following a year of COVID-19. And 5G may play a distinct role.

"5G could be the ultimate 'reopening' theme, as consumers venture out and demand faster cellular broadband coverage and capacity versus last year's dependence on Wi-Fi," wrote the financial analysts at BofA Securities in a recent note to investors.

Verizon – which has been building super-fast 5G in football stadiums, airports and other high-traffic venues that remained mostly vacant during 2020 – agreed.

"We've been waiting" for this moment, explained Verizon's Ronan Dunne in comments this week at the Bernstein Strategic Decisions Conference.

He said the company's new offer of free 5G phones was contingent on three events: a rise in traffic on Verizon's mobile network, a return by shoppers to Verizon's retail stores, and the availability of phones that can support the highband and midband flavors of 5G.

It's now the "perfect timing" for this kind of a promotion, Dunne said.

The financial analysts at Cowen described Verizon's new promotion as "aggressive," though they said it's not necessarily an indication that Verizon is falling behind the competition.

"In our conversation with Verizon, the company noted the offer comes from a position of strength, rather than one of desperation," the Cowen analysts wrote. "Verizon believes it can enjoy the higher volumes without notable sacrifice to margins."

"We're doing better than some people might tell you," Dunne agreed.

Of course, executives from AT&T offer a similar stance.

"We're ready for the competitive responses," AT&T's Jeff McElfresh said at the same Bernstein-hosted event.

He said AT&T continues to enjoy success with its own free phone promotions, and that the operator is prepared to continue chasing "accretive, profitable growth."

"We intend to be the nation's premier broadband connectivity provider. Period," he said. "We are not on our heels. We are back on our toes."

The comments and the new promotions from Verizon, AT&T, T-Mobile and Comcast generally indicate the operators are preparing to fight for the shoppers who are keen to re-enter retail stores after a year of being stuck at home. And that they're going to do so with some of the most aggressive promotions the wireless industry has seen in years.

How this summer plays out remains to be seen. After all, 5G is still in a bit of a transition phase as operators expand their 5G phone lineups and flesh out their 5G networks with speedy and broad midband spectrum holdings.

But it's clear that T-Mobile, Verizon, AT&T and others are not content to sit back and hope that the allure of 5G – such as it is – will be enough to drive shoppers to their wares. Instead, they appear willing to provide discounts of up to $1,000 or more in the hopes that they can steal share from their rivals.

However, as summer turns into fall and operators light up midband 5G networks alongside the annual iPhone update, there is a distinct chance that today's promotions "from a position of strength" might give way to promotions born of anxiety and desperation.

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

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