How the 5G iPhone kicked off the latest carrier wars

How the 5G iPhone kicked off the latest carrier wars

The launch of the first 5G iPhone marks the biggest opportunity yet to do that, kicking off renewed competition among the big network providers. AT&T (T), Verizon (VZ) and T-Mobile (TMUS) all announced aggressive promotions for the device.
The iPhone 12 is not the first 5G smartphone available in the United States, but it is a major deal for the wireless industry. It promises to get customers to upgrade to pricier unlimited data rate plans for 5G. It could also be a chance to get consumers to switch carriers, something that's become especially tricky during the pandemic when fewer shoppers are coming into stores.
Some Wall Street analysts predict the iPhone 12 could prompt millions of Apple users to upgrade, which in turn would mean millions of new 5G customers for carriers.
"Finally we have every player in the ecosystem now represented in the 5G era," AT&T Communications CEO Jeff McElfresh told CNN Business. (AT&T owns CNN parent company WarnerMedia.)
However, it's not clear how much this stepped up competition among the big carriers will pay off, at least in the short term.
While 5G will eventually enable benefits such as faster speeds and greater bandwidth, those perks are currently limited because the networks are still being constructed. In much of the country, the 5G experience isn't yet significantly different from existing 4G LTE networks. That may mean many customers will wait to move to 5G, and those who do make the switch could be disappointed by the experience early on.
"There's always a flurry of promotional activity around big new phone launches," said Craig Moffett, senior research analyst at MoffettNathanson. "The question is: Will this be the so-called supercycle? ... I think it's hard to imagine that when the most important feature of the phone just isn't ready for prime time, that that will be enough to drive a supercycle."

The battle for 5G customers

How successful each carrier will be at scooping up iPhone 12 buyers may depend in part on their 5G build-out strategy.
Analysts say Verizon could have an advantage because it currently has "high-band" 5G networks built out in the largest number of cities — 55 cities to AT&T's 36. High-band 5G enables the superfast download speeds that 5G is widely known for, but infrastructure requirements to build it mean it's only available in the urban core of big cities.
Elsewhere, all three carriers have nationwide, "low-band" networks, on which signals travel farther than on high-band but are only slightly faster than 4G LTE networks.
So, if consumers in dense urban areas want the superfast speeds high-band networks enable, they might choose Verizon. Elsewhere in the country, if they're upgrading to the iPhone 12 — probably for reasons other than 5G — and can get a better deal with AT&T or T-Mobile, they might choose one of those carriers.
"(If) Verizon could actually make a proof case that (high-band 5G) works, that could be a game changer," said Michael McCormack, research analyst with Guggenheim Partners. "But the experience will be a lot different in the suburban and rural areas."
T-Mobile may have an advantage going forward, thanks to its acquisition of Sprint. T-Mobile obtained Sprint's massive chunk of "mid-band" spectrum, which balances faster speeds than low-band with the ability to cover greater distances than high-band. T-Mobile CEO Mike Sievert last month called it the "Goldilocks 5G band," and said the company's mid-band network is set to reach 100 million people by the end of 2020.
Mid-band spectrum is likely to provide "the best of all possible worlds," Moffett said, adding that as other carriers get their hands on more mid-band spectrum, it will likely enable more effective and useful 5G networks.
The carriers acknowledge that it will likely take several years for 5G networks to reach their full potential.
"It's not like a lightswitch," AT&T's McElfresh said. "It takes a lot of capital and a lot of investment to make this a reality everywhere. I'd say that we're at the beginning stages of that right now and it's exciting."
As the networks expand and more consumers start using them, developers will be drawn to create services using 5G, Verizon CTO Kyle Malady said during an interview at an industry trade event last month.
"The first thing is, we put the networks out, then we continue to grow the networks, we continue to put more capability in," Malady said. "And the ecosystem and the app developers, it all evolves and we start seeing new and great applications."

Leave a Reply

Send us a Message

Get all the information