AT&T says 5G will likely be priced like residence Web—pay extra for sooner speeds

AT&T CEO Randall Stephenson.

AT&T CEO Randall Stephenson in the present day mentioned that 5G will seemingly be priced equally to wireline Web, with clients paying extra for sooner speeds.

With 5G, “I will be very surprised if… the pricing regime in wireless doesn’t look something like the pricing regime you see in fixed line,” Stephenson mentioned throughout an earnings name in the present day. (See transcript.)

Some clients “are willing to pay a premium for 500Mbps to 1Gbps speed and so forth,” Stephenson continued. “And so I expect that to be the case. We’re two or three years away from seeing that play out.”

Normally, wireline residence Web companies have been priced primarily based on velocity—a subscriber pays extra for 100Mbps than 50Mbps, for instance. Mobile pricing is normally the identical it doesn’t matter what information speeds you get, however clients must pay for every gigabyte. In the meantime, cellular carriers have traditionally imposed far stricter information caps and overage charges than residence Web suppliers. There’s some overlap between pricing buildings, particularly as residence Web suppliers impose information caps, however normally clients have paid for velocity in residence Web and for the quantity of information in cellular.

AT&T has expertise with each forms of pricing, because it provides cellular service nationwide and wireline service in 21 states.

On the cellular aspect, AT&T has re-embraced unlimited smartphone data the previous few years. However it additionally nonetheless sells smartphone plans that allow clients use lower than 10GB of information every month earlier than they face excessive slowdowns to speeds of simply 128kbps.

AT&T cellular already has some speed-based differentials in its plans. For instance, AT&T limits video streaming to 1.5Mbps (about 480p high quality) except clients pay for a costlier plan that enables streaming in 1080p. What Stephenson described in the present day would appear to transcend that, requiring clients to pay extra for sooner speeds for all on-line actions.

Pay extra… after which extra?

A key query for 5G clients is whether or not they’ll must pay for extra information and for greater speeds or if it could simply be one or the opposite. On condition that Stephenson says AT&T’s 5G pricing will look “something like the pricing regime you see in fixed line,” we will get some hints from how AT&T treats residence Web in the present day.

The reply—not surprisingly—is that AT&T residence Web clients pay extra for greater speeds and for limitless information. AT&T fiber-to-the-home Web prices extra for gigabit speeds than it does for 100Mbps, and AT&T additionally charges different rates for various speeds on its older and slower DSL strains.

However simply paying for entry to greater speeds does not assure that you should use these speeds with out paying once more for information cap overages. An AT&T residence Web consumer that really makes use of his or her high speeds constantly will blow previous AT&T’s residence Web information caps. AT&T residence Web clients get 1TB monthly and pay one other $10 for every extra 50GB block. Prospects can alternatively improve to limitless residence Web information from AT&T for an additional $30 a month.

If 5G cellular companies are priced the identical means, you’d pay the next base fee for sooner speeds and rack up extra costs if utilizing these speeds pushes you previous the info cap.

Speeds will range lots by location

Justifying speed-based pricing on cellular is trickier than with residence Web, as a result of speeds range as smartphone customers transfer round and as public areas get roughly crowded. Clearly, cellular carriers can simply cap a consumer’s velocity, stopping them from getting greater speeds even in areas the place the community helps it. However the variability of cellular networks signifies that the best speeds will not be out there in all areas irrespective of how a lot clients pay.

Dwelling Web companies can extra simply ship constant speeds than cellular networks, and 5G will not essentially change that. Early 5G deployments and statements from carriers point out that the best 5G speeds will likely be reserved for small pockets of densely populated areas. That is as a result of 5G’s highest speeds will likely be out there solely on millimeter-wave spectrum, with indicators that do not journey far and are simply blocked by partitions and different obstacles. On condition that, paying additional for sooner 5G speeds will not essentially imply you will get these speeds on a regular basis.

AT&T’s first 5G customers are companies

Thus far, AT&T’s real 5Gi.e., not the 4G that AT&T renamed “5G E”—is obtainable in parts of 19 US cities, however it might probably solely be used with a Netgear Nighthawk cellular hotspot. On condition that AT&T does not supply 5G smartphones but, this early 5G service is being utilized by clients to arrange Wi-Fi networks.

Companies are the primary clients, Stephenson advised buyers in the present day:

From a 5G standpoint, what we’re seeing when it comes to adoption tends to be enterprise. In truth, it is completely enterprise for us proper now. It is serving as a LAN alternative product. And we’re having actually spectacular demand, the place we flip up the 5G service from companies mainly saying, “We want to put a router in,” and it turns into their LAN alternative.

AT&T’s 5G launched in December for “select businesses and consumers,” with AT&T saying that it’s going to develop into broadly out there this spring. Upon normal launch, “customers will be able to get the Nighthawk for $499 upfront and 15GB of data for $70 a month on a compatible plan and no annual commitment,” AT&T mentioned on the time.

Verizon is the one main provider providing 5G on a smartphone, however Verizon’s cellular 5G is barely in Chicago and Minneapolis, it is barely available within those cities, it requires use of a 4G Motorola cellphone paired with a 5G {hardware} attachment, it requires an infinite information plan, and it costs $10 extra a month. Verizon additionally provides 5G residence Web, primarily based on a non-standard model of 5G, for $70 a month in small components of some cities.

T-Cellular has said it is not going to cost extra for 5G.

Stephenson in the present day mentioned that AT&T can have nationwide 5G protection subsequent yr. As a result of Stephenson mentioned AT&T’s pricing modifications for 5G will play out over the following “two or three years,” we’ll have to attend some time to search out out precisely the way it will evaluate to 4G costs.

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