Editor’s Corner—5 things to watch for in AT&T’s 5G announcement

AT&T 5G network equipment (AT&T)
AT&T has been testing 5G technology this year. (AT&T)

Mike Dano

AT&T has promised to light up commercial mobile 5G service in parts of 12 cities by the end of this year. The service will initially work through the portable Netgear Nighthawk 5G Mobile Hotspot.

Thus, in the next 20 days or so, the industry will get its first look at how AT&T might actually bring mobile 5G to market. This is important because the launch promises to be the first “mobile” commercial 5G service in the United States.

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Verizon launched its 5G Home service in October, but that offering is squarely targeted at the stationary market for in-home internet and not the mobile phone market.

That means AT&T is going to set the 5G bar this month. All other mobile 5G launches in the United States will be compared against AT&T’s service. That’s why it’s so important.

So, what should we watch out for in AT&T’s announcement?

1. Price

This is probably the most important question in AT&T’s 5G launch: How much will it cost? AT&T has a wide range of pricing options it could employ, and what the carrier decides to do will go a long way toward highlighting exactly how AT&T plans to make money from 5G.

As I’ve written before, 5G presents carriers with the option to fix their pricing mistakes around unlimited. As has been made painfully clear, in the wireless industry, unlimited doesn’t mean unlimited. Instead, unlimited generally means that users probably won’t have to count GBs, at least as long as they use their phone in the way that carriers expect them to.

For example, virtually all of the unlimited plans on the market won’t allow users to connect their TV to their phone and stream HD Netflix shows 24 hours a day—despite the fact that that’s exactly what the word “unlimited” implies.

But I digress.

Going back to AT&T’s mobile 5G launch, the carrier may well use the opportunity to blow up the existing pricing paradigm in wireless with something based on speed, or time of day, or something that really is truly unlimited.

But that’s pretty unlikely. What’s more likely is that AT&T will create a 5G pricing plan that’s similar but slightly more expensive than its existing LTE plans. Such a plan would allow AT&T to position 5G as a premium service worthy of a higher price, while at the same time managing network traffic in a way that won’t unduly strain its so-far-untested 5G service.

2. Capacity

Almost as important as price is how AT&T will manage its 5G capacity. By this I mean the terms and conditions AT&T will place on its 5G service.

For example, AT&T currently forbids its smartphone customers from consuming more than 22 GB in a month—those who consume more than that could face throttled speeds.

Presumably, 5G technology will allow AT&T to provide more network capacity, meaning customers will not only be able to download data more quickly but also download more of it.

Interestingly, in some of AT&T’s recent service launches, the carrier hasn’t outlined a specific usage cap (like 22 GB in a month). This may reflect the fact that AT&T has been working to add additional capacity to its LTE network through the deployment of new technologies like LTE Advanced and new spectrum bands.

Whether that trends bleeds into its 5G terms and conditions remains to be seen.

3. Speeds

It will be interesting to see exactly how AT&T advertises the speeds available through its mobile 5G service. After all, wireless speeds can fluctuate dramatically depending on the spectrum being used, the technology being used, a user’s distance from the cell tower or transmission point, and a variety of other factors. Verizon, for example, states that 5G Home users can expect 300 Mbps but notes that they can often receive speeds up to 1 Gbps.

Moreover, AT&T and the rest of the nation’s wireless operators have been working to improve their respective LTE networks—AT&T recently boasted that it can raise LTE speeds to almost 1 Gbps through the deployment of technologies like LAA.

This situation creates a bit of an expectation problem for AT&T, since it will want to make sure to position 5G as faster than LTE but likely won’t be able to promise consistent speeds at or above 1 Gbps. Conversely, simple claims of “faster than LTE” may not sit well with existing customers—including tech savvy early adopters—who are considering upgrading to 5G.

Finally, whatever speeds AT&T advertises may change over time; Verizon has already promised its 5G Home service could double speeds in the next six months.

4. Additional services

AT&T has made a very clear corporate bet on video. Specifically, the company acquired DirecTV and Time Warner and is now building out a massive media and advertising business around those purchases.

As a result, the company has been working to encourage mobile customers to sign up for its video offerings as a way to increase its overall revenues per user. Indeed, this kind of service bundling is key to the operator’s long-term goals—AT&T executives have boasted that the operator counts 370 million direct-to-consumer relationships that could each expand into packages of additional services.

So how will 5G play into this? That remains unclear. Already, AT&T provides its Watch TV service for free to its LTE mobile customers; it’s reasonable to assume it could add other, premium streaming video services like its DirecTV Now offering to its 5G service package.

5. Coverage area

AT&T has promised to launch 5G in “parts” of 12 cities this year. That seemingly minor detail actually speaks volumes about both the benefits and drawbacks of 5G.

5G was initially designed as a way to use millimeter-wave spectrum—this spectrum generally sits above 20 GHz and can transmit vast amounts of data. The drawback though is that it doesn’t transmit signals very far; Verizon, for example, noted that its 5G Home service on 28 GHz spectrum can reach roughly 3,000 feet.

Therefore, as AT&T deploys its own mobile 5G service in its 39 GHz spectrum, it will face significant challenges in getting it to reach across neighborhoods and cities simply due to the face that the signals don’t go very far. AT&T and the rest of the nation’s carriers are working to deploy small cells and other network infrastructure to counter this situation, but it’s slow going.

To be clear, 5G isn’t restricted to millimeter-wave spectrum bands—AT&T has promised to refarm other spectrum bands for 5G—but initially coverage will likely be an issue.

The most likely scenario here is that AT&T won’t provide specific coverage details in its initial 5G launch this year as it works to expand coverage throughout the coming years.

The bottom line

The final point to make here is that AT&T’s 5G announcement won’t mark the end of the 5G hype cycle, but the beginning. Other carriers will launch the service next year, and all the carriers will work to expand it into ever-larger coverage areas, spectrum bands and devices.

And beyond even that, operators like AT&T and Verizon have hinted that the real opportunity with 5G sits beyond smartphones: Verticals like retail, healthcare, finance, education and public safety could all deploy 5G in difference scenarios for different reasons.

Whatever happens in the next few weeks, the story will continue. — Mike | @mikeddano

"Editor's Corners" are opinion columns written by a member of the FierceWireless editorial team. They are edited for balance and accuracy.