Many observers might agree that it will be difficult to boost consumer revenue from 5G by simply raising prices, compared to 4G. But there are other ways to do so. Among the proven ways is to entice customers to upgrade their accounts to more-costly service plans. AT&T and Verizon, for example, use that tactic to boost consumer account revenue.
Verizon’s strategy for increasing account average revenue is to migrate customers from metered plans to more-expensive unlimited usage plans. That will apply to 5G services as well, where the fastest 5G service will be possible only on the unlimited plans.
“We’ve seen tremendous step-ups from our customers from metered to unlimited and unlimited to premium unlimited,” said Dunne. “We continue to see this with over 20 percent of our postpaid accounts ending the year on a premium unlimited plan.”
“We expect this number to grow to over 30 percent this year and circa 50 percent by 2023,” Dunne said. “We offer customers many reasons to step up to a premium unlimited plan.”
“First and foremost is access to the power of our 5G ultra wideband network,” Dunne said. “With C-band included, we think step-ups to premium will only accelerate.”
In other words, the fastest 5G speeds will be possible only when customers are buying the premium unlimited plan, which includes access to speeds possible only on the millimeter wave and C-band spectrum.
“Since we launched late last year, two thirds of small business customers who choose new unlimited plans are choosing premium unlimited, which includes 5G ultra wideband and new value adds such as Business Mobile Secure,” said Tami Erwin, CEO of Verizon Business.
So despite expectations that 5G will not lead to higher per-account spending over 4G, that is likely to happen, though indirectly, as customers are encouraged to move to unlimited usage plans.