Verizon Discloses Pricing for Its First 5G Mobile Service
Verizon announced it would kick off its new 5G mobile wireless service in portions of Chicago and Minneapolis in April, the start of a plan to reach 30 cities with the super-fast, next generation offering by year-end. Customers will need a 5G-compatible phone—only one will be available to start—and have to pay a $10 per month premium on their unlimited data plans, Verizon said.
Verizon’s service uses high-frequency spectrum bands to reach speeds 10 or more times faster than current 4G LTE networks. To start, it will only work with Motorola’s Moto Z3 phone using a 5G add-on pack. The 5G add-on will be available for preorder for $50 starting on March 14, but usually costs $350. The phone itself costs $480. Later this year, more 5G compatible phones are expected to hit the market from Samsung, LG, and others.
The service starts on April 11 in the two midwestern cities and will be “rapidly expanding” to the other 28 cities this year, according to Kyle Malady, Verizon’s chief technology officer. “Not all 5G networks are the same,” Malady said in a statement.
The move follows AT&T’s (T) December announcement of 5G mobile service using a mobile Wi-Fi hotspot starting in parts of 12 cities, including Atlanta, Dallas, and New Orleans, for $70 per month. Sprint (S) has said it will offer 5G starting in May in Chicago, Atlanta, Dallas, and Kansas City but hasn’t disclosed pricing. T-Mobile (TMUS) hasn’t named its starting cities, but says it won’t raise the prices of its current unlimited plans for 5G users.
Analysts said Verizon’s (VZ) initial 5G service would only tempt a small number of consumers to sign up, given its spotty coverage and price premium. “We think most of Verizon’s customers wouldn’t find the benefit worth the cost,” New Street Research analyst Jonathan Chaplin wrote in a report. “But early adopters tend to be price insensitive.”
Shares of Verizon, which have gained 4% so far this year, were about unchanged in morning trading on Wednesday.