The president of Shaw Communications (SJR) says carriers should have tested paying extra for 5G as a “consumer test” to see if “there was a capacity and willingness to pay for that.”
Paul McAleese, president at Shaw Communications, said during the carrier’s Q4 2020 earnings call that there needs to be a better monetization plan for 5G, adding he was worried that carriers were going to absorb the incremental cost of 5G spectrum and build it out in a declining pricing environment.
“Anybody that operates in Toronto and drives along the toll road that is the 407 knows that sometimes you pay for faster lanes and you’re willing to do so. It would have been nice if there was an opportunity to kind of test that and I’m not sure that we’re going to get that opportunity,” he said.
5G is not fully available in Canada. In January, Rogers announced it is rolling out its initial 5G wireless networks in various downtown markets across Canada. In June, Bell and Telus each launched similar initial 5G networks.
Rogers initially planned to charge $15 per month for access, but dropped the price in October. It added on its website that 5G is included with a Rogers Infinite plan at no extra charge.
Bell was also charging $10 per month starting April 2021 but removed the charge in June. Telus offered access at no charge when it launched its 5G network in June.
“I would have liked to have seen a little more of a consumer test there and to see whether or not there was a capacity and willingness to pay for that,” McAleese said. “I’m not sure that we’re going to get that opportunity. So the risk here is that we spend billions of dollars on spectrum and build-out and simply just absorb it all.”
McAleese added he would have preferred to see a charge similar to one when 4GLTE was initially launched.
“But again we’re not the driver of that particular pricing strategy. So we will probably be the kind of the price taker on that front with it once the market decides where it’s going to go,” he said.
McAleese also added that it was sensible to talk about 5G right now but there isn’t a “compelling use case” for the network.
“We’ve done some research in the last number of weeks against contenders for the Apple 5G iPhone, and the people buying it from us tell us they want the new iPhone but they’re not really that interested in the 5G part of it because there’s not a use case that’s really driving that,” he said.
He added that the demand for 5G will happen but that the industry needs to “reconsider how it monetizes that over time.”