AT&T’s Smartphone Launch Signals a Different Approach to Kicking Off 5G

K. Weldon
K. Weldon

Summary Bullets:

  • As operators start to roll out 5G and launch new handsets that can eventually take advantage of the technology’s speed and latency advantages, most have focused on the consumer market.
  • AT&T used a different approach this week in offering its new device solely to business customers and developers; it hopes these innovators and early adopters can help it find novel use cases which can aid in monetizing its network.

AT&T announced last week that, as of June 17, its new Samsung Galaxy S10 5G will be available to businesses that are on its Business Unlimited Preferred Plan for $999. This is the same price as its current Galaxy S10+ model, which has half the internal memory. The new model also has a bigger screen, better battery, and better camera than its predecessors. In addition, the operator is making the device available to roughly 100,000 developers next week through its Developer Program, at no charge through the end of the year. It is also sponsoring a 5G hackathon later this year at which developers have a chance to win $100,000.

While hackathons and developer programs are not in themselves unique, today’s mobile operators are faced with the dilemma of how to begin rapidly monetizing their new 5G networks, which are just starting to roll out. While consumers and businesses hopefully understand that they are unlikely to be able to enjoy 5G speeds in their own city, let alone their own street, for a long time to come, the devices are starting to roll out and it is time for the operators to figure out interesting schemes to get early adopters on board. In the business segment, AT&T hopes to foster development of innovative use cases which ultimately may generate the most revenue – important for operators which are still trying to pay for their 4G networks, but have been compelled by competitive pressures to roll out 5G as quickly as possible. Tacking on additional fees to consumer plans for the higher-speed access is not going to broaden adoption; in fact, it would be likely to highly irritate customers, who will not see higher speeds until sometime later this year or next and may not even need higher speeds for their consumer applications unless they are into interactive gaming or AR/VR-enabled applications.

So, maybe it is the business market which will pave the way to new recurring revenue streams for AT&T and its competitors as they roll out 5G connectivity. The problem is that all the operators are faced with the same monetization problem and so far seem to be coming up with the same set of likely use-case scenarios. They also tend to lose out to application developers, IT service providers, and even their infrastructure partners when it comes to offering value-added services for enterprises such as consulting, integration, and application enablement.

Meanwhile, other operators rolling out 5G are starting with the consumer market, treating 5G and associated device launches the same way as they have treated past device and technology rollouts. It is encouraging to see a unique spin on how to energize the market. Most analysts truly believe that 5G has significant upside potential for users and suppliers in the future, but the massive capital investment to roll it out is worrisome for an industry that has been seeing low revenue and subscriber growth. Wireless smartphone subscriptions are reaching saturation, average revenue per user is declining, differentiation between operators is hard to come by, and new compelling applications are few and far between. Can 5G and business users save the day?

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