5G technology is finally here, and it’s going to have a massive impact on how we consume technology with faster speeds and lower latency. The technology is expected to open up huge frontiers from super-smartphones, IoT and self-driving cars to drones, virtual reality and remote surgery.
The world’s largest telecom, AT&T (NYSE:T), had a self-imposed deadline to launch 5G services in 12 U.S. cities before the end of 2018. Well, the telecom giant says it has earned the bragging rights as the first mobile carrier to launch the next-generation mobile technology after rolling out the service in the following cities: Atlanta, Charlotte, Dallas, Houston, Indianapolis, Jacksonville, Louisville, Oklahoma City, New Orleans, Raleigh, San Antonio and Waco.
AT&T plans to add seven more cities to the mix in the first half of 2019. These are: Orlando, Las Vegas, Nashville, Los Angeles, San Diego, San Francisco, and San Jose.
Verizon Communications (NYSE:VZ) though disputes the veracity of AT&T’s claim saying it got there first. In a statement to Seeking Alpha, Verizon spokesman Kevin King vaunts: “Welcome to the 5G party, begun by Verizon on October 1, 2018.” Verizon is referring to its Oct. 1 launch of ‘5G Home’ service in Houston, Indianapolis, Los Angeles and Sacramento.
An important distinction is that AT&T’s 5G technology is built on 3GPP-compliant 5G NR standards whereas Verizon’s network is built on the company’s proprietary 5G TF standard since the 3GPP standards are yet to be finalized. Verizon says its customers will receive a free upgrade to 3GPP 5G NR standard soon as its partners provide 3GPP-compliant hardware, devices, software and chipsets.
AT&T’s 5G ‘Puck’: Nighthawk 5G Mobile Hotspot
As with any new mobile technology, users are usually interested in two main facets: speed and available hardware.
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AT&T says it has deployed its 5G network on the millimetre wave spectrum (mmWave). One big advantage of this setup is that mmWave offers lightning-fast speeds and low latency compared to 4G technologies. The downside, however, is that high-band spectrums like mmWave do not cover large areas and suffer from poor penetration. To counter this, AT&T plans to build out its 5G network with many small cells. Currently, the service is piggybacking on its LTE network.
OK, now we know the backbone that AT&T’s 5G network will run on. So what’s the actual network speed? As Venture Beat has noted, AT&T made no minimum guarantees on network speeds in its 5G launch press release though theoretical speeds of 979 Mbps and 1.2 Gbps have been quoted by different sources. In contrast, Verizon’s 5G network has managed to exceed its promised minimum speed of 300 Mbps to 1 Gbps.
Regarding available hardware, AT&T has lined up several mobile 5G devices but has made no announcement for fixed broadband since its yet to launch fixed 5G. Other than the Nighthawk 5G puck, other 5G mobile devices are: a Samsung-branded 5G smartphone coming in the spring and a Samsung 5G smartphone with multi-band support expected towards the end of 2019.
5G a Game Changer?
AT&T has found itself in the doldrums this year, with the stock dropping 26.3 percent in the year-to-date due to a host of issues including earnings misses and the Time Warner merger that led to the company debt load ballooning to $190 billion. The company has set a target to achieve leverage of 2.5x in the year 2019, and the deleveraging exercise could impact its ability to quickly roll out its 5G network and stay ahead of rivals.
Nevertheless, 5G offers fresh growth runways for carriers like Ma Bell and Verizon by expanding IoT, new content services, Ultra-HD mobile video and immersive experiences.
User experience is always a hot topic in the telecom world, and companies that are able to provide their subscribers with superior experiences through fast and reliable networks usually win more users–and dollars. The early 5G launch is, therefore, a big plus for AT&T stock as long as it’s able to maintain the lead. – Safe Haven