Why Do New Services Come to Major Cities First? We Explain…

Recently we have heard that AT&T, T-Mobile, and Verizon all plan to roll out 5G internet across the United States. One thing stood out from all the announcements: they are mostly rolling out in major cities and a few smaller ones.

We saw the same thing with YouTube TV mostly rolling out in major markets and slowly coming to smaller ones over the last year.

So why is it that smaller cities and rural areas are typically not among the first to get a new service such as 5G and YouTube TV? It comes down to money.

There are a ton of expenses when you roll out a new service. Many companies have already spent millions or even billions on 5G internet. They want to get as many customers as rapidly as possible to recover the money they spent.

To do this companies like to go to the most densely populated markets to get as many signups as possible. For example, in a rural area you may have to run cables for miles to hook up the same number of customers that a single apartment building in New York City would offer. That allows companies to quickly start to earn back the money they have already spent.

Once major companies hit major markets they start to roll out their service to smaller markets. Often this happens by building out from major cities and expanding into the surrounding rural areas.

So next time you see a service talking about how they are going to launch in a major city you now know why.

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