Industry Voices—Entner: The Marketing Wars: 5G edition

The reaction of Verizon, T-Mobile and Sprint to AT&T’s 5G Evolution announcement highlights the intense competitive pressure in the wireless industry. (Pixabay)
Roger Entner, contributor

Over the last few weeks, the first opening salvos of the 5G marketing wars have been fired. Every time we have a new generation of wireless technology rolled out, the competitive mix has the opportunity to be reshuffled. Verizon won the race to 3G and 4G decisively by launching and rolling out next-generation services earlier and faster than the competition. This is the foundation of Verizon’s best network reputation. The lead that Verizon achieved early on, translates into better reputation, more customer additions, lower churn and premium prices. Over the years, the other carriers catch up and the difference narrows and sometimes even disappears. AT&T and T-Mobile have had to play catch up to Verizon too often and basically said to themselves, “We know how this movie ends and we don’t like it,” and are putting maximum effort into launching early and rolling out fast.

But it is not enough that the engineers are still working on building the networks; marketing folks get a hold of it and must proclaim it to the world with their own license to translate technical terms into marketing terms. That was the case with 3G, it was the case with 4G and now it is the case with 5G.

Everyone is guilty and the outrage is more engineered than real. AT&T dared to call 4G Advanced technologies 5G Evolution. First to be outraged was Verizon, which promptly took out full-page ads in major newspaper to declare that they will not call their 4G network a 5G network. That didn’t stop Verizon from creating its own proprietary 5G specifications, called 5G TF, with TF standing for Verizon 5G Technical Forum, with a number of its suppliers. No other operator in world is using 5G TF nor will Verizon use in a year or two.

Now is 5G TF really 5G or is only the 3GPP Release 15 standard 5G? Like beauty, that’s in the eye of the beholder. Next to the outrage party was T-Mobile, which dedicated a video and significant attention to the offense. T-Mobile claims that it will have the first low band 5G network in the United States. Granted it will be the first 600 MHz 5G network because no other nationwide operator bought 600 MHz spectrum. What is being conveniently ignored is that right when T-Mobile will get phones with 600 MHz 5G chipsets in it, its competitors will get phones with 5G chipsets in 700 MHz, PCS and AWS spectrum capabilities in it. For all intents and purposes, AT&T, Verizon and Sprint, if it's still around, will also have near nationwide low-band 5G networks as they will dedicate a part of the spectrum of their 4G networks to 5G, just like the T-Mobile 600 MHz network will support both 4G and 5G simultaneously.

Not to be late to the outrage party, Sprint also checked in. Sprint conveniently forgot that for the longest time it advertised WiMAX as the first 4G network, conveniently ignoring that all the international standards bodies declared WiMAX to be a 3G technology.

If we brush off the selective outrage, it is clear that 4G advanced technologies like three-carrier-aggregation with up to 60 MHz of spectrum, 256 QAM, LAA, and 4x4 MIMO are going to be a significant speed increase over what is available today. Is it 5G? No. Is it evolving towards 5G? Yes. It’s a glass-half-full or glass-half-empty kind of thing from a customer perspective. Unless a customer is one of the few mmWave 5G islands, the speed increases that customers will get with 4G Advanced technologies versus 5G technologies will be negligible. The key differentiator will not be speed, but latency. For all intents and purposes, for at least the next year, a 5G Evolution / 4G Advanced device or however else you want to call it and a 5G device will behave very similarly in 99% of the country.

In the absence of applications that require low latency or edge computing, 5G may or may not be faster than the 4G Advanced / 5G Evolution devices. While 5G is inherently about twice as fast as 4G due to being more spectrally efficient, if one carrier deploys twice as much spectrum but is using 4G technologies, the advantage of 5G has been eroded. Also, absent new apps, the advantage of faster networks for video consumption, which is 70% of data traffic, is not meaningful for customers. In other words, phone calls won’t seem any different if you’re using a device on 4G or 5G. The must-have, paradigm-shifting apps that will bring 5G fully to life need to be accelerated from the idea-to-beta stage to actual offerings to consumers and edge computing facilities need to be built and run on a common standard or the industry will fall rather quickly off the crest of the hype wave it is currently surfing on.

This potential lack of immediate differentiation between 4G Advanced and 5G services raises the specter of disillusionment and tepid adoption of 5G premium devices until killer applications appear for both consumers and businesses. While the investment model in new consumer apps is murky for operators because the upside of being cross-carrier is much bigger than the need for funding and cooperation, the opposite is true for business applications. There is a tangible benefit for business-focused applications to work with operators for closer integration and as future sales channel. Operators like AT&T are working with their foundries and partnerships to develop 5G applications. Through its investment in Magic Leap, AT&T is planning on bringing mixed reality applications to businesses. Verizon has launched at CES a $1 million competition to find the best 5G application. As 5G networks are the foundation for innovation, operators need to do more to bring 5G applications to life as it will make their networks more valuable.

The fierce reaction of Verizon, T-Mobile and Sprint to AT&T’s 5G Evolution announcement highlights the intense competitive pressure in the wireless industry, especially around 5G. Everyone wants to be first in the eye of the consumer as this will translate into customer gains. We have seen it with 3G and 4G with Verizon that whoever builds out 5G first has the best coverage will create a significant lead over the next several years. The magic and curse of marketing is that perception becomes reality, so expect the advertising and marketing campaigns to hit a fever pitch once the first 5G devices become available to consumers.

We should also not forget the cable industry that has announced 10G. While apparently growing concerned about the potential impact that 5G fixed wireless can have on the home internet market, cable companies are adopting wireless industry language. The G in 10G does not indicate 10th Generation like in wireless, but 10 Gigabits of speed. Normally, 10 Gigabits of speed is 10 Gbps, but why not jump on the G bandwagon? 10G must be at least twice as good as 5G, right?

Roger Entner is the founder and analyst at Recon Analytics. He received an honorary doctorate of science from Heriot-Watt University. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by Fierce staff. They do not represent the opinions of Fierce.