Verizon Is The Only US Wireless Carrier Charging Extra For 5G
from the not-worth-the-hype dept
By now we've established that while fifth-generation (5G) wireless will result in faster, more resilient networks, the technology has been over-hyped to an almost comical degree. Yes, faster, lower latency networks are a good thing, but 5G is not as paradigm-rattling as most wireless carriers and hardware vendors have led many in the press to believe. 5G is more of a useful evolution than a revolution, but it has become the equivalent of magic pixie dust in tech policy circles, wherein if you simply say "it will lead to faster deployment of 5G!" you'll immediately add gravitas to your otherwise underwhelming K Street policy pitch.
The other major problem? Americans already pay some of the highest prices for mobile data in the developed world. Now they're being asked to shell out a lot of cash for pricey new handsets with worse battery life, but more expensive data plans. It was already a difficult, pre-pandemic proposition to explain why users happy with 4G speeds need to pay even more.
Many carriers appear to have understood this. AT&T includes 5G for free on the company's two most expensive unlimited plans. T-Mobile has been offering 5G for no additional cost (though that could change post Sprint merger) on all of its unlimited plans. Verizon, in contrast, has been eager to charge users an extra $10 per month for 5G. Initially the company backed off this surcharge after some negative early press, but seems intent on imposing these surcharges, it claims, because 5G offers a "differentiated experience":
"When you deliver a differentiated service, you can get a differentiated price point," Verizon CFO Matt Ellis explained during a recent investor event. Ellis pointed to Verizon's recent demonstration of 4.2Gbit/s speeds on its commercial 5G network, noting such speeds are dramatically faster than what Verizon offers even on its wired Fios network."
There arer several problems here. One, Verizon's "launched" 5G markets have been repeatedly ridiculed for being spotty at best. Even the company's 5G launches in sports stadiums have been ridiculed as patchy as hell. Asking users to shell out significantly more money to access a network that is barely available doesn't make much sense, at least when you're trying to initially ramp up adoption. Especially given that most users really don't use much more than the top speeds 4G currently offers (anywhere between 10 and 30 Mbps, or so).
The other problem: while Verizon's best case 5G can theoretically offer speeds that rival fiber, "5G" as a standard behaves very differently depending on what kind of spectrum is being used to fuel it. For example, Verizon's making heavy use of millimeter wave (mmWave) spectrum, which struggles with range and obstacle issues (like building walls). In other words, for many, the benefits of 5G won't be immediately obvious:
"One major factor complicating 5G pricing is the fact that the technology behaves very differently depending on what spectrum band it's in. For example, the speed of Verizon's network is due to the fact that it runs across wide swaths of highband, millimeter wave (mmWave) spectrum. While transmissions in this kind of spectrum only travel a few thousand feet in the best conditions, they can carry enormous amounts of data. While other operators like AT&T and T-Mobile have dabbled in mmWave 5G, Verizon is doubling down on the technology with plans to expand its 5G mmWave network to a total of 60 US cities this year."
Granted, with the T-Mobile Sprint merger reducing wireless competition by 25%, that will likely result in less serious pricing competition and more expensive plans. In turn that could result in AT&T and T-Mobile following Verizon's lead, and charging already cash-strapped American consumers even more in the years to come.
