AT&T plans to have nationwide 5G coverage by the first half of 2020, using the 700 MHz FirstNet public safety network it is building. Randall Stephenson, AT&T’s CEO, said the FirstNet network uses hardware “that can be upgraded to 5G with a simple software release.”

FirstNet had achieved 60 percent of the planned coverage at the end of June, with plans to reach 70 percent by year-end. (Read more about FirstNet below.)

Stephenson’s comments came during AT&T’s second quarter earnings call on 24 July. Responding to an analyst question during the Q&A portion of the call, Stephenson addressed AT&T’s strategy to deploy 5G on the mmWave bands (e.g., 24 and 39 GHz). He said the mmWave bands are where the dramatic speed improvements are seen — he’s achieving between 1 and 2 Gbps with a Samsung phone in Dallas — and this will be deployed market by market.

“It will take a while to deploy the really high speed spectrum,” he said.

In the FCC’s recent 24 GHz 5G auction, AT&T won 831 licenses in 383 partial economic areas (PEA) for $982 million.

mmWave 5G services will initially be marketed to business customers for connected factories, IoT applications and Wi-Fi network replacements.

“We don’t want to get too aggressive with the consumer right now, where there aren’t handsets in the marketplace and there isn’t significant coverage. That will happen as we go through the course of next year,” said Stephenson.

A business-first strategy makes sense, as business customers will be fewer and more localized, allowing AT&T to optimize the mmWave coverage.

Listen to Stephenson’s full 5G comments to the question asked by Tim Horan of Oppenheimer:

FirstNet Background

FirstNet, the First Responder Network Authority, was created by Congress in 2012, and charged with establishing “a nationwide, interoperable public safety broadband network.” The requirement for interoperability reflected the problems with emergency communications following the 9/11 attacks, when agencies were unable to communicate with each other due to each using different spectrum, standards and equipment.

Congress authorized $7 billion for the FirstNet network, not enough to build a nationwide 4G network, so FirstNet sought a public-private partnership. AT&T won the bid and was awarded a 25-year contract to build, operate and maintain the network.

FirstNet will fund $6.5 billion over the first five years, and AT&T will make annual payments totaling $18 billion over the 25 years to fund operational expenses and reinvestments in the system.

In exchange for its investment, AT&T will have commercial use of the 20 MHz of D-block spectrum, which the company will use for a low-band 5G network. T-Mobile is deploying 5G on 35 MHz of spectrum between 600 and 700 MHz.

While seamless communications among public safety agencies is the justification for the network, they won’t consume much network capacity.