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New 5G iPhones start crossover season for carriers

Smartphone customers may be slow to notice how Apple Inc.’s new 5G-enabled iPhones improve the Internet connections that older models use, but cell phone carriers are working overtime to get them to see it.

AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc. used all of this week’s iPhone unveiling as an opportunity to entice customers who may not yet understand or care about the fifth generation mobile standard. The four new iPhone models are equipped with the technology that moves information faster and in larger quantities than before.

Advertising campaigns are driven by economics as much as technology. Most Americans already own a smartphone or two, so customer additions usually come at a competitor̵

7;s expense. The three major mobile network operators began to build their 5G networks differently, giving them a rare chance to hack something unique – even though they may not yet deliver the speed and consistency that the new technology promises.

“Networks are different for the first time,” said Cliff Maldonado, chief analyst at BayStreet Research. “5G is the perfect time to justify switching operators.”

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Verizon, which has long relied on its largest market share and reach, started 5G installations in cities and now plays catch-up in rural areas. T-Mobile, a relatively small city company a decade ago, is now the second largest US provider, announcing its 5G expansion in the countryside. And AT&T, which is not known for discounting, this week introduced aggressive savings offers that mimicked some of the language in old T-Mobile ads.

Each provider leans towards 5G to gain an advantage when customers buy new phones. Phone switching is the most common time for airlines to win or lose a subscriber.

A battle for customers among operators will benefit Apple by paying even more attention to the device. Apple investors are already betting that the arrival of the iPhone 12 will reverse the latest trends for the company, which saw device sales peak in the financial year 2015 with the first version on the big screen.

Investors have pushed the company’s market value to $ 2 trillion on the belief that the new technology, designed to improve the quality of video chats, online games and new features such as augmented reality, will motivate customers to upgrade.

T-Mobile USA, which was historically quick to offer deep discounts, instead focused this week on the speed and availability of its 5G network. Bellevue, Wash., Carrier strengthened its system of assets acquired from Sprint earlier this year.

This image from Apple shows a display of the new iPhones equipped with technology for use with faster new 5G wireless networks. (Apple via AP)


T-Mobile chief technology officer Neville Ray said Verizon’s early investment in faster millimeter-wave service, which typically covers very small areas, would disappoint Verizon customers who “go on a treasure hunt to find those 5G speeds.”

Verizon on Tuesday expanded its list of areas covered by these high-frequency signals, which support the fastest downloads on the market but rarely travel beyond a few hundred yards. The carrier relies more than its competitors on “dynamic spectrum sharing” to spread coverage outside these hot spots.

Using spectrum sharing technology, network operators can mix older 4G signals with new 5G transmissions within the same radio channel. It’s a compromise that improves coverage at the expense of ultra-fast download speeds.

The importance of the US market was shown on Tuesday when Verizon CEO Hans Vestberg joined Apple executives to promote the new devices. The US iPhone 12 models are the only Apple handsets that support millimeter-wave traffic.

Verizon’s Chief Consumer Ronan Dunne said the frequencies only improve the basic 5G service available to customers nationwide. The millimeter wave service only follows the airline’s premium plan, although Mr. Dunne said all 5G phones will have enhanced connectivity on Verizon’s network.

AT & T’s top offer for customers with a focus on price. A campaign released on Tuesday offered new and existing customers a free iPhone if they use an unlimited data plan and shop with certain older smartphones.

The Dallas company’s pitch said the deals were “uncomplicated wireless” upgrades, expressing the “indefensible” events that were once a cornerstone of T-Mobile’s advertising campaigns. Similar deals apply to new Samsung phones.

The expensive promotion – the iPhone 12 Pro Max model sells for $ 1,099 in the US – still benefits AT&T by giving subscribers a reason to stick with the service while the carrier covers their 30-month installments. It also helps the media and telecommunications company retain more products, such as the HBO Max streaming service, to customers’ plans. The AT&T promotion can apply to up to 25 million customers, said Roger Entner of telecom researcher Recon Analytics Inc.

This image provided by Apple shows Apple CEO Tim Cook presenting on 5G and the new iPhone 12. (Apple via AP)

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T-Mobile responded Wednesday with several promotions, including up to a $ 500 discount on new iPhone 12 models for specific customers. Verizon headlines Tuesday’s Apple event with its own free iPhone offer for some new customers and deep discounts for existing subscribers.

The discounts incur hidden costs: Each offer steers customers toward airlines’ more expensive unlimited data plans. The move is reminiscent of the old subsidy model that drove the rise of the iPhone more than a decade ago, when providers regularly covered the cost of new Apple devices in exchange for two years or more of reliable revenue from customers under contract.

The momentum for phone sales has waned in recent years as customers in many markets wait longer to upgrade their smartphones.

Wave7 Research analyst Jeff Moore said the older iPhones and Android phones could provide captured demand for something new, but it will not be 5G technology that opens the river gates.

“5G will definitely be a major component in the hype for the launch of the iPhone 12,” Moore said. “Will it fundamentally change the way you interact with your smartphone? No. 5G is not that revolutionary.”

Kevin Haddad, 69, who lives near Los Angeles, said he is not ready to upgrade his phone because there are too few apps and services that take advantage of the technology. “If there are services that I need and want because my phone is now running for three years, I would be open to upgrading,” he said.

Until then, he said he sticks to his current device and wireless operator, AT&T. “The reason I initially stuck to AT&T was because they were the only provider in my area,” he said. “And that’s why I got my first iPhone. I was at AT&T. But I do not know. I have no plans to change. I do not like to change anymore.”

–Donald Morrison contributed to this article.

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