AT&T CEO downplays AWS Private 5G

AT&T has not announced any official private wireless network products, but the company’s top executives don’t seem too concerned about the fact that Amazon Web Services (AWS) last week announced its AWS Private 5G.

At the UBS Global TMT Conference yesterday, AT&T CEO John Stankey said, “I don't pretend to know exactly what Amazon is thinking or doing.” But he indicated that AT&T helps enterprises with high-level wireless requirements, and he considers AWS’s turnkey offering to be “down market.”

He characterized AWS’s Private 5G as an offering that would be suitable for simple businesses that don’t have multiple locations and don’t have to be concerned about devices that would leave the four walls of a building.

“I think what they're doing is probably finding a space where they can go and find additional workloads and bring it in,” he said. “And those private networks will be more robust than maybe the Wi-Fi networks that might be running in those locations. And in that regard, they're solving the market problem.”

He touted the sophisticated wireless network that AT&T has built with “so much technology, scale and capability.” And he said that the demands on wireless networks are only going to increase as new applications come online that use more augmented and virtual reality. “It will require broad scale, robust and scaled wireless networks to enable those things to happen,” said Stankey.

RELATED: AWS surprises with AWS Private 5G

He interpreted AWS Private 5G as an effort by AWS to “mimic some of the capabilities that we have back in our core and offer companies that want maybe a lower budget, more contained approach…that, they've kind of built it in a box for them.”

“Frankly, I'm suspect that there aren't going to be a lot of businesses out there that necessarily say they're ready to tackle becoming their own wireless operator in those environments,” said Stankey. “From our experience, [there’s] a bit of complexity that gets involved with those types of things other than the most generic and simple environments.”

He did concede that perhaps AWS was onto something that AT&T has skipped. “I don't think we have a scaled-enough and simple-enough offer in that space right now at this point. I think most of our work and activity has been in the more complex environments. They're the large enterprise customers that have multiple locations, that need to have some ability for equipment and product to move between a private environment and a public environment.”

As for AT&T, Stankey said, “As we get up the learning curve, and as we equip the network to be able to do things differently, we can begin to move down market and offer more economical solutions that might meet the needs of the similar area where Amazon is trying to play.”

CFO stresses spectrum and fiber for private wireless

Today, AT&T’s CFO Pascal Desroches spoke at a Barclays investor event. And apparently, he compared his talking points to Stankey’s in advance.

Desroches stressed AT&T’s connectivity assets. “Whether we are partnering with a hyperscaler and providing a solution for a company, underlying it is the connectivity which can only be delivered by great fiber and spectrum,” he said.

His comments are interesting because service providers, over the years, have alternately either touted their connectivity assets or downplayed them as being just the “dumb pipe.”

Of AWS’s Private 5G in particular, Desroches said, “Amazon did introduce a private network service where the spectrum is CBRS. The real question becomes: Is that going to be good enough for major enterprises that really depend on great reliability? We don’t believe so. If they want to provide better connectivity they’re going to need to work with us and other spectrum holders.”

He added that these private wireless networks will probably also need “fiber in critical locations” to ensure the reliability of performance.

“Whether we are partnering with a hyperscaler or doing it ourselves, at its core it’s the need for connectivity that is going to be the critical success factor, and we have it in both fiber and spectrum,” said Desroches.

Despite downplaying AWS’s 5G Private Wireless and saying that it was geared to smaller businesses, Desroches did say that AT&T predicts an inflection point in growth in revenues for its enterprise business, staring in 2022 and into 2023. He expects that growth to be “principally garnered from providing connectivity to small and mid businesses."

RELATED: Verizon CEO not worried about AWS private 5G

It appears that both AT&T and Verizon don’t want to send the message that they’re at all threatened by AWS’s Private 5G.

Yesterday, Verizon CEO Hans Vestberg said that AWS’s offering won’t compete with Verizon’s own private 5G options.