Sprint Corp. has sued AT&T Inc. over a branding campaign that it says falsely tells customers they are receiving 5G service on their smartphones, escalating marketing wars between carriers over the next generation of wireless networks.
AT&T in recent weeks has begun putting a “5GE” label on some customers’ smartphone screens to indicate they are receiving higher-bandwidth service, a precursor to its rollout of faster, 5G service. The E in the tag stands for “evolution.”
Sprint alleges in the suit filed Thursday that AT&T is deceiving customers into thinking their 4G LTE wireless service is in fact 5G. It is asking the court to block AT&T from using that tag.
“AT&T is just like Sprint and all the other major wireless carriers currently operating a nationwide 4G LTE network,” a Sprint spokeswoman said in a statement Friday. “AT&T’s deceptive ads have harmed consumers by persuading them to purchase or continue purchasing AT&T’s services based on the lie that they are offering 5G,” she added.
5G Will Be Ultrafast, but the Roll Out Will Be Anything But
A spokesman for AT&T said the carrier introduced the 5G Evolution idea more than two years ago as “an evolutionary step” in building out its 5G network.
“5G Evolution and the 5GE indicator simply let customers know when their device is in an area where speeds up to twice as fast as standard LTE are available,” he said in a statement, adding that the carrier would fight the lawsuit.
The dispute is a sign of fierce competition for subscribers in a saturated U.S. wireless market. It also shows growing tension among rival carriers as they race to roll out the next generation of wireless service, a costly undertaking that requires fresh investments in network equipment and infrastructure.
Sprint’s suit comes as it and T-Mobile US Inc. try to convince the Justice Department and regulators to bless their planned merger. The suit argues that AT&T’s “aggressive and widespread false advertising campaign threatens Sprint’s business and goodwill.”
The controversy started late last year when customers on Android cellphones started noticing “5GE” labels near the newly enhanced cellular stations. AT&T had been upgrading its 4G LTE network to carry traffic over a broader swath of the wireless spectrum, providing a significant bandwidth boost for subscribers streaming video or downloading apps. Apple iPhone customers reported seeing the labels on their devices in recent days.
AT&T has defended the way it brands the new technology, arguing that it installed new equipment to make 5GE service possible. Those cellular radios will eventually get software upgrades to support full 5G service as the standard matures.
“This is a step that is required to get to ultimate 5G,” Chief Executive Randall Stephenson said in a Friday interview on CNBC in which he was asked about the lawsuit. “And it’s an evolutionary step to 5G.”
Competitors immediately seized on the labels as misleading. There are few phones on the market that support 5G engineering standards.
Verizon’s chief technology officer, Kyle Malady, wrote an open letter last month published online and as full-page newspaper ads criticizing AT&T’s tag. “Verizon won’t take an old phone and just change the 4 in the status bar to a 5,” it said.
Verizon itself has been criticized for beginning to offer proprietary in-home 5G broadband service late last year, before international standards for the service were settled.
Write to Sarah Krouse at sarah.krouse@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com