The ‘Race To 5G’ Was More Of A Waddle To Nowhere
from the meet-the-new-boss dept
We’ve noted for several years how the “race to 5G” was largely just hype by telecoms and hardware vendors eager to sell more gear and justify high U.S. mobile data prices. While 5G does provide faster, more resilient, and lower latency networks, it’s more of an evolution than a revolution.
But that’s not what telecom giants like Verizon, T-Mobile, and AT&T promised. Both routinely promised that 5G would change the way we live and work, usher forth the smart cities of tomorrow, and even revolutionize the way we treat cancer. None of those things wound up being true.
When 5G dropped in the U.S., network performance was significantly worse than most overseas deployments due to a dearth of middle-band spectrum. Less talked about (because it’s a preferred outcome for many) is the fact U.S. wireless data prices continue to be some of the highest in the developed world, something that only tends to increase with greenlit consolidation.
To hype the technology and sway regulators and lawmakers into doing whatever they wanted, wireless carriers have historically framed 5G deployments as a sort of “race.” But repeatedly data suggests that the U.S. has waddled its way to a mediocre showing:
America’s average 5G mobile internet speed is roughly 75 megabits per second, which is abysmal. In China’s urban centers 5G phones get average speeds of 300 megabits per second. Though that’s not quite the fastest 5G in the world—South Korea claims that title at over 400 Mbps—it’s still fast enough to download a high-definition movie in two minutes.
U.S. consumers of course don’t care what’s happening in China and vice versa. Studies routinely show that U.S. consumers want two things: reliable coverage and lower prices. While the U.S. will slowly get the former as we increase deployment of middle band spectrum (which provides better coverage and high speeds), the latter has long been a non-starter in the face of regulatory capture.
That we must defeat China specifically in the nonexistent “race to 5G” was a very specific point made for years by telecom giants and the regulators and politicians beholden to them. Yet oddly very few have been willing to acknowledge that the U.S. is not only far behind China on 5G network performance, but we’re also significantly behind when it comes to 5G affordability:
Prices have been coming down fast in the ongoing price war, with China Mobile now selling its entry level 5G package for just 69 yuan ($9.76 US) a month, 31% off the original price. A premium 5G package that originally was priced at 128 yuan ($18.08 US) now sells for 88 yuan ($12.43 US), if the customer signs a one-year contract.
China Unicom, another competitor, has responded with price cuts of its own, reducing some plan prices by 30 percent. A popular 5G package called “5G Refreshing Ice Cream” costs 90 yuan ($12.72 US) per month, not including a small prepaid service fee and a 12-month contract. A premium 5G package is priced at 103 yuan ($14.55 US) per month and comes with a 24-month contract.
Please notice that most of the hand-wringing about losing the “race” to 5G that has bubbled up lately always excludes any mention of high prices. Almost as if industry is dictating most discourse in media coverage in a bid to downplay that aspect of the conversation.
Regardless, much of the “race” rhetoric was a specific rhetorical weapon of lobbyists used specifically to nudge regulators and lawmakers toward a preferred outcome (like mindlessly rubber stamping the T-Mobile Sprint merger, gutting town and city authority to determine 5G tower placement and rate structure in their own back yards, or killing net neutrality and FCC consumer protection authority).
But you’ll notice that giving wireless carriers and large hardware vendors like Cisco everything they wanted over the last five years (once again) didn’t result in the miracle improvements industry and its policy allies promised; it resulted in mediocrity–a fairly common story in U.S. telecom.
Time and time again, handing out favors to the biggest sector players trumps policies geared toward generating meaningful competition or protecting consumers and market health. And time and time again, across both wireless and fixed-line U.S. broadband networks, the end product is spotty service, slower speeds, and high prices.
Wash, rinse, and repeat to infinity, with nobody (usually quite intentionally) learning much of anything from the experience.