Despite the company’s pending launch of mobile 5G services, AT&T’s top wireless executive declined to discuss how the operator might charge for the faster wireless technology.
“That’s to be determined,” AT&T’s John Donovan told The Wall Street Journal in a Q&A about the operator’s 5G plans. “I think that’s something that collectively the industry’s going to try to innovate around. When we went from megabits and text-message plans to unlimited in the 4G network, there wasn’t a lot of incremental revenue. But 4G dropped our costs dramatically, so it improved our margins.”
However, Donovan did offer hints that AT&T may well look to eke out more revenues from multiple 5G connections.
“Most would say now that it’s going to carry a premium because it’s so superior in some of the things it can do,” he continued. “But that premium may be that you have three new devices in your home that have small connection fees, and not necessarily that you have an iPhone in your hand and the plan it’s on costs more.”
Those comments are noteworthy considering Donovan himself said last week that AT&T will launch its mobile 5G service “in the next few weeks.” In his comments during AT&T’s quarterly earnings call, Donovan reiterated AT&T’s previously announced launch plans: The carrier will launch mobile 5G services using the 3GPP’s 5G standard in “parts” of a dozen cities before the end of this year and will expand that launch to additional cities next year.
He said the efforts were part of a “drive toward nationwide coverage of our 5G network,” though he did not say when AT&T would offer nationwide 5G services.
AT&T’s mobile 5G launch plans further crystalized late last week when the company said its first mobile 5G device would be the Netgear Nighthawk 5G Mobile Hotspot. AT&T disclosed the news in its announcement that it successfully completed “the world’s first millimeter wave mobile 5G browsing session with a standards-based device on a mobile 5G network” in Waco, Texas.
AT&T, along with the rest of the nation’s wireless network operators, is likely keen to raise revenues via the launch of 5G technology. However, 5G proponents have argued that the technology isn’t necessarily a way to squeeze more money from existing smartphone customers but instead can create new lines of business.
For example, Verizon is using 5G technology to directly challenge wired internet service providers like Comcast and Charter with a 5G-powered fixed wireless internet service. Verizon is charging its existing mobile phone customers $50 per month for internet services inside their homes and offices at around 300 Mbps.
AT&T’s Donovan isn’t the only wireless executive who has offered vague comments on 5G service pricing. Earlier this year, in disclosing Sprint’s own 5G launch plans, former CEO Marcelo Claure said the operator would likely charge an unspecified premium for 5G.
“As we deploy our network, you’re going to see fiber like speeds” alongside expanded coverage, he said in February. “So, when you look at all that, there’s absolutely no reason why we should be discounting of Verizon and AT&T and T-Mobile, which is what we do today. So, we look at it as the best is yet to come as it relates to a great product, and for us to be pricing similar to our competitors in the future. Now in the meantime we’re going to continue to be the price leader until we roll out our 5G network, and you’re going to potentially see some modest price increases in the next year, but nothing substantial.”