When AT&T said it saw 5G initially as an enterprise play, that left some of us scratching our heads, as that was not what occurred with 3G or 4G. But AT&T Communications CEO John Donovan offered some additional insight about the AT&T 5G enterprise strategy at an investor conference today and one comment really illuminated the company’s thinking.

AT&T opted to deploy 5G initially in the millimeter wave band, which supports the highest speeds but over relatively short distances, and as Donovan noted, this is a “rifle shot” kind of approach where a blanketed approach achievable in a lower-frequency band, might have seemed more logical. He noted, however that “That’s the way the standards were done.”

In developing its launch strategy, he said, AT&T “felt confident enough that with millimeter wave and the enterprise marketplace, we had all we needed to get an effective deployment done.”

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He added that the company plans to deploy 5G in sub-6 GHz spectrum bands to gain nationwide coverage by the first half of 2020.

AT&T 5G Enterprise Strategy
In the meantime, he noted that the 5G cities AT&T has announced to date have been closely aligned with the 5G-related enterprise deals that the company has also announced. He cited the examples of Chicago, where AT&T has a major 5G deal with Rush Hospital and Austin, where the carrier has a major 5G deal involving Samsung and robotic manufacturing.

AT&T John Donovan
John Donovan

AT&T’s approach was “not to scattershot a city,” explained Donovan. Instead, he said, “it’s been designed around an enterprise play.”

The carrier didn’t want consumers buying 5G devices and hunting around for coverage, he said. Instead, the company wanted to put the devices in the hands of enterprise customer employees, who will be able to spend 70% of their cellular time on a 5G network at their workplace.

Donovan sees 5G as a “disruptive technology,” noting that it “could be a Wi-Fi killer” and “the next-generation local area network.”

He also noted that AT&T has a strong enterprise business, which plays well into the company’s 5G enterprise strategy. “We’ve been committed and invested in the enterprise business, especially channels and the sales force,” he said.

By emphasizing the enterprise market for its early 5G deployments, which will include parts of 29 markets this year, Donovan said AT&T will gain valuable knowledge about enterprise use cases. Possibly then, the business case could be determined based on the value of the use cases, rather than on network coverage.

If compelling applications arise, AT&T will consider premium pricing for its 5G network, Donovan said. He declined to say what that premium pricing might be but noted that it “ultimately will be a function of value to the consumers and your competition.”

He also noted that “certain applications” could be “worth a lot” and noted that the premium pricing might be embedded in “an application that carries with it a different economic model.”

This might involve more of a “three-sided business model,” rather than a traditional “two-sided business model,” Donovan said.

Donovan made his comments at the Credit Suisse Communications Conference in New York City, which was also webcast.

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5 thoughts on “Donovan Outlines AT&T 5G Enterprise Strategy, Company Plans Nationwide 5G for First Half of 2020

  1. So now AT&T is saying that 5G is not for the general public's use, only for enterprise and businesses, which actually does make sense since millimeter wave is pretty much useless because it will not penetrate anything that would make indoor use possible. Starting out indoors by placing 5G transmitters inside of factories and dozens of transmitters on every floor of multi-story office buildings would make it actually useful to workers. Indoor 5G coverage simply cannot be achieved with outdoor transmitters. By stating this new position on deployment, AT&T is proving that all the claims that were made about self-driving cars and the like were just fantasy and will never happen.

  2. Glenn, that’s not exactly true. Since AT&T is NOT the “only game in town” other telecom companies view 5G in a more real world view. I wouldn’t rule out self driving cars just because of AT&T’s poor decision making processes. As someone who worked for almost thirty five years in the industry, I’ve witnessed them make countless bad decisions and investing heavily in millimeter wave would certainly be near the top. It is expensive up front + the coverage leaves much to be desired. Millimeter wave is simply not economically practical, in my view. Admittedly, the lower frequencies do limit internet speed somewhat but certainly make it up in coverage. Fiber to the prem is actually the ONLY true solution to achieve extremely high internet speed indoors. AT&T will eventually come to realize that fact after wasting millions of dollars on millimeter wave!

    1. You will be utterly disappointed with any 5G offering by the "other guys". Donovan's boring explanation is on point. Look at Sprint's laughable LG 5G phone. Since when–Sprint?–coverage?? And, all carriers are after MMW one way or another therefore it's an investment not a waste.

    2. I totally agree that millimeter-wave is pretty much useless in practical terms. My point about self-driving cars is that when people talk about them, they always do it in the context of millimeter-wave transmission as being a requirement because of the low latency and very high data capacity. But neither of those matters when there has to be a site located every 50 feet so that a line-of-sight/no-obstruction connection can be maintained to every self-driving vehicle. The lack of practicality of that just boggles the mind. Those 5G data capabilities are said to drop significantly when you move to lower, more capable frequency spectrum such as Sprint's 2.5 Ghz and T-Mobile's 600 Mhz spectrum they say they will use for 5G.

  3. Don’t waste your time commenting on these articles. What you’ll type will be printed as garble. Telecompetitor.com needs to fix the problem or stop asking for reader comments.

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