VZ Verizon Communications Inc

By Sarah Krouse 

Verizon Communications Inc. is holding off for now on its plans to charge an extra $10 a month for faster 5G smartphone service.

The largest U.S. wireless carrier by subscribers said Thursday it would waive that charge for an undetermined period in markets where the service would launch next as well as in cities where rollouts have begun.

Verizon turned on 5G service earlier this month in parts of Chicago and Minneapolis, saying at the time that it would waive the $10 monthly fee for just three months. Analysts have since given mixed reviews of the service -- which is available to users of the top two tiers of Verizon's unlimited-data plans -- for being limited in scope.

"This is some of the blowback you get from being first" in offering smartphone 5G service, said John Hodulik, an analyst at UBS Group AG. "It didn't make sense to charge people extra money for a service that they're rarely going to use."

Verizon said Thursday it would roll out 5G service in parts of 20 additional cities including Phoenix, Detroit and Providence, R.I., by the end of the year. It didn't specify when.

Tami Erwin, head of Verizon's new business-focused unit, said the carrier is waiving the cost in all the cities it has announced so far for an undetermined period to give customers time to experience and understand 5G.

The carrier learned from the first two markets that "customers want more of it, and they want it everywhere," she added. Verizon is working with municipalities to get the remaining zoning permissions it needs to add small cells and densify coverage in the inaugural cities, Ms. Erwin said.

U.S. carriers are jostling to deliver 5G wireless in many markets this year and have sparred over the faster service's branding. Upgrading networks is a capital-intensive undertaking that requires spectrum and investments in fiber, radios and antennas.

"We are a long way from realizing all the dreams of 5G, but we have to start somewhere," John Saw, chief technology officer at Sprint Corp., said at an industry conference in Brooklyn on Wednesday. The technology promises to disrupt industries like health care in the same way 4G connectivity helped Uber transform transportation, he said.

Sprint plans to roll out the service in nine cities by the end of the second quarter, Mr. Saw said, adding that the carrier has installed antennas to facilitate 5G in those places but is awaiting the necessary software.

"It has been difficult to get to where we are today," Mr. Saw said.

AT&T executives told analysts on an earnings call Wednesday that its 5G service was available in parts of 19 cities and that it would offer nationwide 5G coverage in 2020. It plans to add three new 5G markets soon.

Some AT&T customers have begun seeing 5GE symbols on their smartphones to indicate that they are receiving higher-bandwidth service, a precursor to the carrier's rollout of faster technology that meets 5G standards.

"It's having exactly the effect that you want it to have. Our customers see this tag and they go and do a speed check," Randall Stephenson, the carrier's chief executive, said on an analyst call. He added that in the next two or three years wireless customers could begin to pay a premium for the faster speeds.

Neville Ray, chief technology officer at T-Mobile US Inc. criticized rivals' limited 5G launches in a blog post last week, saying that the carrier would launch its version of the service "when the technology is ready for everyday customer use."

Write to Sarah Krouse at sarah.krouse@wsj.com

(END) Dow Jones Newswires

April 25, 2019 12:53 ET (16:53 GMT)

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