It is not an easy matter to predict whether 5G will produce higher average revenue per account in the U.S. market. For starters, not all the leading service providers will charge a price premium for 5G. T-Mobile US continues to say it will not charge any price premium for 5G. AT&T has not yet unveiled consumer 5G pricing.
And Verizon and Sprint both charge a $10-a-month premium for 5G access, as part of their unlimited plans, including all Verizon unlimited data usage plans and Sprint’s top unlimited usage plan.
Though T-Mobile US says it will not charge a price premium for customers of its 5G network, both Verizon and Sprint are charging $10 a month more for 5G, on the top-end unlimited plans, in Sprint’s case, or on any unlimited data usage plan in Verizon’s case. That means there is some potential for revenue increases on 5G plans, for Sprint and Verizon, to the extent that consumers choose to buy unlimited-usage plans.
Sprint’s 5G service is reserved only for its $80-per-month “unlimited premium” customers. The 5G network will not be available for use to Sprint customers buying $70-a-month or $60-a-month unlimited plans.
Access to Verizon’s 5G Ultra Wideband network is $10 per month with any of Verizon’s unlimited usage plans.
Virtually all observers expect 5G data consumption will increase, at least on the part of early adopters. Sprint CTO John Saw said 5G customers are consuming three to five times more data than its 4G LTE customers.
Several likely reasons: early adopters tend to be heavier users and faster networks mean users consume more data in equal amounts of time.
In South Korea, average customer data usage on 5G was 24 gigabytes in June 2019, which was 2.6 times higher than the 4G average of 9.1GB.
If 5G follows the pattern of 4G, there will initially be a period where 5G ARPU is higher than 4G ARPU, at least for some service providers. But 5G is launching in a context of declining ARPU for the leading mobile operators in the U.S. market.
Data ARPU, on the other hand, might be increasing, in part because users are buying plans with larger usage allowances.
That trend has been underway for some time, as noted by Teleanalytics.
