Sonim CEO: New devices likely to be ‘very heavily subsidized’ for FirstNet subscribers

ORLANDO—Expected subsidization from AT&T could mean that FirstNet subscribers will pay little or no upfront money to purchase new Sonim Technologies devices—a development that is just part of the economics “sea change” happening within the industry, Sonim Technologies CEO Bob Plaschke said last week during IWCE 2018.

Just days before IWCE 2018, AT&T—FirstNet’s nationwide contractor—announced that the new Sonim Technologies XP8 and XP5s rugged LTE devices would be on the carrier’s list of approved devices for FirstNet users. Designed for first-responder use, the XP8 is expected to cost around $600 retail for an individual device, according to Plaschke.

However, the upfront costs could be very different to public-safety agencies that subscribe to FirstNet, Plaschke said.

“When you get [an XP8] from AT&T, it’s not going to be $600,” Plaschke said during an event hosted by Sonim Technologies. “When you get it from AT&T, it’s going to be free or very heavily subsidized—that’s the way the carrier market works.

“This is the biggest challenge to [traditional LMR vendors] Motorola and Harris. The LEX L11 at $1,000 is not competing with an XP8 at $600; it’s competing with an XP8 at $49 [or other carrier-subsidized price]. The business market is different, because they [LMR manufacturers] have a group of reseller agencies that they have to support, and they support them through hardware sales.”

Both the XP8 and the XP5s provide users with the option of adding a module to the device to support additional functionality, such as a fingerprint reader, a driver’s license scanner or direct-mode push-to-talk communications.

“Any of these combinations are all sub-$1,000,” Plaschke said. “Compared to what they spend today, [public-safety agencies] find it incredibly affordable.”

Indeed, the latest P25 portable radios that include all software can have a list price of $11,000 per device, although volume discounts to agencies typically reduce the per-device price to the $6,000 or $8,000 range. Still, the ability to transform a potential capital expense for LMR devices into an operational cost for an LTE-based device that provides greater technical versatility at a much lower cost promises to impact the public-safety-communications market, Plaschke said.

“It’s a sea change in the way that public safety thinks about how it does its business,” Plaschke said. “For the first time, they’re basically being exposed to a broad range of broadband technologies, applications and capabilities.

“We [Sonim Technologies] certainly won’t survive, if this world becomes proprietary—we’re too small, too fragile. I think we have to, as a collective group, band together to begin to educate and to populate the public-safety environment with open-source specifications that basically lets them help manage themselves.”

Last month, Samsung announced that its new Galaxy S9 device would support operation on Band 14—the 700 MHz spectrum licensed to FirstNet—but the Sonim Technologies announcement is indicative of the type of choice that AT&T want to provide to FirstNet subscribers, according to Chris Sambar, AT&T’s senior vice for FirstNet.

“We have a very close partnership with Bob [Plaschke] and the Sonim team. It’s important to us and to the program—the FirstNet authority and AT&T—that we don’t just have the major manufacturers with Band 14 for first responders,” Sambar said. “[We also want to] have the niche manufacturers that make devices that cater to the public-safety community, and that’s exactly what this device is.

“This thing is purpose-built for first responders. As we go out, there’s a lot of them [public-safety personnel] that already know about it, and there’s a lot of them that we’re educating and showing it to them, but they’re saying, ‘Wow, that device looks really familiar to me.’ It’s rugged, it does all of the things I’m used to a device doing and a whole lot more.”