Could 5G contracts be priced by line speed rather than data?

Could 5G contracts be priced by line speed rather than data?

There’s an interesting disparity in the way we pay for home internet and 4G services.

While broadband costs sometimes increase along with achievable line speed, 4G tends to be priced by data volumes.

Deals on our website can be ordered according to data limits, which range from a modest 500MB per month to unlimited quantities of bandwidth.

However, the upcoming 5G revolution might be priced rather differently.

Before considering how that could affect consumers, it’s worth taking a moment to explain why 5G will be both essential and unavoidable…

Five alive?

The UK’s rollout of 5G was in the news recently, with controversy surrounding the involvement of Chinese hardware manufacturer Huawei in developing our infrastructure.

Security concerns involving Huawei’s relationship with the Chinese government have overshadowed the prospect of ultra-fast smartphone connectivity.

When it makes its UK debut next year, 5G promises to do for mobile devices what broadband did for home computers and games consoles.

It’ll also underpin the Internet of Things, whereby billions of devices transmit data to the cloud and receive instructions in return.

However, the 5G revolution will also have an immediate (and profound) effect on smartphones.

There’ll be no more dead zones, no more dropping onto inadequate HSDPA connections, and no more flipping between WiFi and 4G networks.

Indeed, 5G will be the only connection protocol our phones need, until interference-free LiFi replaces today’s congested WiFi services.

These fifth-generation mobile data networks require compatible smartphones and dedicated 5G contracts.

Consequently, negotiating your next SIM-only deal might be rather different…

Speeding penalty

During an otherwise fairly mundane financial forecast, the CEO of American network AT&T made some interesting comments about 5G.

He predicted that the firm’s consumer pricing system would change from charging per MB or GB of data to a tiered pricing structure based on connection speeds.

A customer needing the fastest possible connection might pay a premium for a 1Gbps line, whereas cheaper (and slower) contracts would see achievable speeds deliberately throttled.

That could lead to customer complaints, since today’s domestic broadband contracts tend to deliver the highest line speed available at individual addresses.

Line speed throttling is most commonly associated with satellite broadband, when monthly data allowances have been consumed.

Network operators might argue pricier 5G contracts reflect the infrastructure and development costs involved in developing new technology.

However, there is a danger consumers end up paying extra to enjoy 5G’s full potential, rather than simply a watered-down version of it.

Indeed, another American mobile operator has recently announced a $10 monthly 5G premium for customers in the pilot cities of Chicago and Minneapolis.

That could herald an uneven playing field for 5G contracts in other countries, where only wealthier consumers would get to enjoy the full benefits of ultra-fast connectivity.

Regulators and governments alike will be watching closely to see how network operators approach 5G pricing.

Back To Top