AT&T executives tease multiple billing schemes for 5G services

LOS ANGELES—Executives from one of the nation’s top wireless network operators said that 5G could enable a wide range of billing models beyond the standard monthly fee that users pay today for LTE service.

However, they declined to provide any specifics on exactly what AT&T will charge for its upcoming 5G service, scheduled to launch later this year in roughly a dozen cities across the country.

“I think the business models are still evolving,” said David Christopher, the executive in charge of AT&T’s consumer wireless and video businesses.

For example, Christopher said that AT&T could create a specific pricing tier related to low-latency video gaming services. “There will be different tiers of service,” he said.

“There’s certainly an opportunity for new consumer consumption models,” Christopher added, explaining that AT&T is currently engaging in two separate, new pricing models for its wireless service today:

1. Service is included in the cost of the device, at least for a limited time (like SmartThings’ $99 tracking device that includes a year of service).

2. Service that is added to a customer’s existing bill (like the $10-per-month service charge for the Apple Watch).

“Those two models are viable,” Christopher said in comments during last week’s MWC Americas trade show. He said that those pricing models, and potentially others, could be applied to AT&T’s forthcoming 5G service. “We’ll have to see” how pricing evolves, he added.

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The question of 5G pricing is critical to AT&T and the rest of the nation’s wireless network operators as they race to switch on commercial 5G services. Such services—if they generate demand among customers—could well help prop up carriers’ average revenues per user, figures that have been declining in recent years.

AT&T, for its part, has said that it will launch commercial mobile 5G services later this year. The company’s initial device for the service has been described as a “puck,” but carrier executives promised that AT&T will sell 5G phones too starting early next year. Further, the company has promised to expand the service to additional cities in 2019 and beyond.

Importantly, AT&T’s Andre Fuetsch explained that the operator’s 5G users would also be able to access the carrier’s LTE network—a network he said continues to offer faster speeds and better performance through the deployment of technologies like LAA and 256 QAM.