When you listen to telecom executives talk as often as I do, you begin to recognize when companies likely have coached their execs to emphasize certain themes. For example, at least twice in the last week, AT&T execs have said they see 5G being adopted initially in the enterprise market, a message they didn’t emphasize so much until recently. The latest example of the AT&T 5G enterprise theme came yesterday from Scott Mair, president of AT&T operations, who answered questions at a financial conference.
“We see initially enterprise businesses as being the area where the entry will be first,” said Mair in answer to a question about 5G, a service the company has said it will launch before the year is over.
His comments echoed those of AT&T CEO John Donovan, who said last week that the company sees 5G as “largely an enterprise play” to start.
So what’s behind all this sudden AT&T 5G enterprise rhetoric?
AT&T 5G Enterprise Rhetoric
We’re skeptical about some of the things AT&T is saying about 5G and the enterprise because a) there has never before been an example of a cellular technology catching on first in the enterprise and b) because the company hasn’t made a compelling case for why the enterprise will be first.
At today’s conference, for example, Mair emphasized one of 5G’s important capabilities: it will have lower latency than traditional cellular offerings. And that, he said, will support “plenty of IoT [Internet of Things] use cases where latency matters.” Those use cases could involve businesses or consumers, he said.
On the business side, he cited the example of a hypothetical company that might use 5G for visual inspection of products as they move through an assembly process so that any defects can be promptly addressed. The implication was that low latency would add value there – an assumption that could be questioned.
It’s also important to note that use cases such as the one he described would be most effective with an analytical interface to detect defects, and that would require development time, which doesn’t match the notion that enterprises will be the first customers for 5G.
We can’t help wondering whether AT&T’s 5G enterprise rhetoric might be a sort of smokescreen.
U.S. wireless carriers have been ultra-competitive about 5G, with all the Big Four making claims about being first with this or that milestone. But at the same time, some industry observers have questioned how big the demand for 5G really is at this time.
The service promises to deliver higher speeds, which will vary, depending on a carrier’s spectrum holdings and other factors. AT&T, initially at least, is focusing on using high-frequency spectrum to support substantially higher speeds than people can get with current technology. The downside is that using high-frequency spectrum requires lots of cellsites, which means the company’s initial plans call for 12 markets in 2018 and 19 more in 2019.
And although carriers expect to have some smartphone availability in 2019, the only device AT&T will have for use on it 5G network when service launches is a Wi-Fi hotspot. And as Mair noted today, 2020 is the year when smartphones will be available “at scale.”
Don’t get me wrong. I’ve no doubt businesses and consumers eventually will want 5G’s speed and low-latency – and, considering the potentially long deployment times involved, carriers are smart to be working now on rolling out 5G.
Another implication of long 5G deployment timelines, however, is that managing expectations will be critical. And with that in mind, some might say it’s also smart – in a cunning king of way – for AT&T to be telling everyone that its first 5G customers will be on the enterprise side so that consumers and Wall Street aren’t disenchanted by the initial results when the service launches without smartphones and in a limited number of markets.
I’d be interested to hear what readers think about it.