The millimeter wave tax strikes again. The new Google Pixel 4a 5G is designed to be an affordable 5G phone, coming in at $499, according to Google. But Verizon tells us that its special ‘5G UW’ version of the Pixel 4a 5G will costs $599. The difference appears to be that Verizon’s model adds millimeter-wave, Verizon’s super-fast but hard-to-find form of 5G.
The costly ‘affordable’ 5G phone is just the latest example of the ‘millimeter wave tax,’ where phones with the short-range 5G system are $50 or $100 more expensive than otherwise-identical phones with only ‘sub-6Ghz’ 5G. The problem is that mmWave requires several very finicky antenna modules, and there’s currently only one company which offers them: Qualcomm.
We saw this happen before with OnePlus, where the OnePlus 8 was $599 and Verizon’s OnePlus 8 UW was $699; with the Samsung Galaxy A51 5G ($504 at T-Mobile, $550 at Verizon), and with others. It generally only happens with phones listing under $700 or so; at prices above that level, the millimeter-wave tax gets baked in.
But in the middle of a pandemic where phone prices are on their way down, the fact that millimeter-wave costs an extra $50-100 can’t be lost on Verizon or on consumers. If anything, it’s likely to make both AT&T and T-Mobile back further away from developing their own millimeter-wave networks, which already appears to have ground to a halt in 2020 after a lot of work being done last year.
This week, Verizon announced a new mmWave router for home Internet access. That may be the real short-term future of the technology. On smartphones, Verizon is stuck with mmWave because it has no dedicated mid-band 5G spectrum for phones to otherwise speed along on. That situation will last until next year, when Verizon is anticipated to pick up and build out new airwaves in the next big auction. While Verizon will soon announce a ‘nationwide’ 5G network based on sharing channels with 4G, the very nature of shared channels means that network won’t have the kind of speedy performance Verizon wants to promote.
While Verizon’s 35-city mmWave network has only a single-digit percentage of availability in the cities it covers, even that small coverage area, when combined with Verizon’s 4G performance, was enough to help Verizon get our Fastest Mobile Networks award this year.
If millimeter-wave continues to be a drag on phone prices, Verizon is likely to pivot away from it as soon as it gets hold of that new C-band spectrum.
Does Google’s Dream Need Millimeter Wave?
Google’s Pixel launch specifically called out Stadia, its game-streaming service, as a way to drive 5G adoption. They’re right: demanding low latency and tons of bandwidth, it’s a perfect 5G application. It may even be a perfect millimeter-wave application, especially if it demands a solid 100Mbps connection and below 10ms latency.
However, the high costs of millimeter-wave at every stage are really holding the technology back. Because of its short range, it requires far more cell sites than mid-band or low-band 5G. I’ve been following Verizon for 15 years, and they’ve always been world-class at building networks, yet they seem stymied at the challenge of turning mmWave into a citywide system. Bumping up phone prices for a network that’s already unappealingly expensive makes it… even less appealing.
Qualcomm keeps rah-rahing millimeter wave for obvious reasons. They have a lock on the technology, and when it’s implemented, it does truly transformative things. Last week I sat on a bench in Queens and streamed 300Mbps to each of three different devices at the same time. A single mmWave site can power multiple homes or mobile offices.
As the long pandemic drags on, though, everyone’s taking a closer look at performance for price. To be worth the tax, millimeter wave is going to have to work harder.
