Friday, July 24, 2020

AT&T 5G Nationwide Milestone & Then Some

At the 2Q20 AT&T earnings call, CFO Stephens quickly stated that AT&T had achieved nationwide 5G capability.  None of the financial analysts caught it or asked follow-ups. At the call’s end, the press release came out. 

Key highlights for the people who are TLDR:

-       It’s nationwide
-       AT&T Unlimited Starter (entry plan) is 5G enabled
-       Cricket’s premium Unlimited Plus plan is 5G enabled

I was fortunate to share a subject call other analyst colleagues and former boater and possibly future RV king AT&T’er Gordon Mansfield to get more detail. Here are some relevant points:

-       Nationwide = 205 million POPs covered with dedicated 850 MHz & future sub-6 spectrum where it makes sense; doesn’t count its commercial mmW
-       DSS is active in pockets of Florida & Texas
-       DSS & mmW are commercial already but isn’t a factor in this announcement
-       Current 5G implementation is Non-standalone (NSA) but feverishly testing Standalone (SA)   

Why it Matters

-       The national coverage marketing milestone is a large part of the ‘5G Race’ as hyped and billed by industry and the government.  While the full nationwide POP coverage is ~320M POPs, 200 may seem like a shortfall.  For reference, LTE introduced in late ’10 and early ’11 started with a phased approach. BUT when DSS comes in, theoretically, a true 300M+ target may be realized as 5G will include existing LTE bands/coverage.
-       Every carrier seems to be fast tracking to 5G SA with announced trials. Of course there are services/revenues to unlock when that day comes. T-Mobile and Verizon have discussed using SA in 2020 and with peer pressure, it’s likely AT&T will also have 2020 rollout. SA makes everything better and will be the trigger for a broader DSS rollout.
-       As an aside - AT&T tells me that they’re ready to deploy standalone 5G to its customers in Argentina and Colombia this summer.  Wow! South Americans are ahead of North America.   
-       5G enabled plans are an important consideration for the future as to take advantage of the technology, you not only need a 5G device, you need the right 5G plan.  This means that legacy plans will access 5G tech even if a subscriber BYOD a 5G capable device.  There’s no forced migration per se but certainly a way to move early adopters to the new plan portfolio.
-       The 5G network has to be there for carriers to sell devices and every carrier is in the same boat. Everyone is looking to Apple to determine whether it will support 5G in its traditional Fall iPhone debut.  Given that the AT&T subscriber base is well north of 50%, you’d think they (and other peers) are pushing Apple.  For AT&T and Verizon, it’s also about mmW in addition to sub-6GHz support.