Where Every Wireless Carrier Stands In The 5G Race – The Motley Fool

If you've followed the wireless industry in the past two years, you've no doubt heard the management and analysts talk about 5G. This is the next generation of wireless technology – the 5G G – and should allow faster speeds, lower latency and the ability to connect to multiple devices at once.

The introduction of 4G technology has fundamentally changed the way users use their wireless devices. Applications such as Uber or Snapchat would not exist without it and would forget streaming music or HD video without the speed of 4G.

But 5G offers the potential for a significant new leap forward, allowing developers to leverage technology with applications for the Internet of Things, cloud gaming, augmented reality, virtual reality and autonomous vehicles. 5G speeds can also allow operators to challenge cable companies with broadband at home, providing consumers with an alternative source of high-speed Internet.

Naturally, Verizon Communications (NYSE: VZ), AT & T (NYSE: T), T Mobile (NASDAQ: TMUS), and Sprint (NYSE: S) are all fighting to establish a 5G network first. No matter which company offers a reliable 5G network capable of winning large contracts from private and public companies wishing to take advantage of this technology, it could also benefit from a competitive advantage with consumers . Each operator is exploiting its existing resources to develop its next-generation networks, each with its own strengths and weaknesses.

Here's where each carrier is in the 5G race.

Verizon

Verizon will launch its first 5G Home Broadband Sales Service in four markets starting Oct. 1. The operator says customers can expect typical speeds of around 300 Mbps with maximum speeds up to 1 Gbps.

The network will operate on Verizon's millimeter-wave spectrum in the 28 GHz and 39 GHz bands. These wavelengths offer unparalleled speed and latency thanks to 5G coding, but the ability to travel long distances and to enter buildings is limited compared to the lower frequencies used with 4G technology. As such, Verizon's Home Broadband service will require professionally installed on-site equipment. the company plans to move to self-installed equipment next year.

Verizon acquired Straight Path Wireless for $ 3.1 billion last year, bringing the largest participation in millimeter-wave spectrum licenses. As a result, Verizon holds 76% of the available 28 GHz spectrum in the top 50 markets and 46% of the available 39 GHz band.

The carrier has been testing the 5G connections on these frequencies for some time now, and is confident in its ability to provide stable connections at a fixed location. The next step will be to create mobile connections and Verizon expects to also use its millimeter-wave spectral resources for a fully mobile 5G service. Verizon is certainly well positioned, but it needs a lot of spectrum and a lot of cash to deploy its strategy.

Verizon's approach of putting a commercial product in homes as quickly as possible will require a lot of capital. It is launched before the rest of the industry is ready. He must hire contractors to install on-site equipment. Its total dependence on the millimeter wave spectrum also means that it will have to install many small cells. (data processors attached to utility poles or inside buildings) to ensure good coverage, especially for mobile connections from fixed connections. That said, starting with home fixed connections will provide a faster return on investment than building a wireless network and waiting for customers to migrate to 5G devices.

AT & T

AT & T plans to launch a 5G mobile network in 12 cities by the end of the year and to add seven more by early 2019. Its network, similar to that of Verizon, will rely on its millimeter wave in the 39 GHz band. Consumers will not have compatible 5G handsets before the end of the year. AT & T will sell a hotspot called puck, which will pick up the 5G signal and connect to the handsets via Wi-Fi.

At the same time, AT & T has developed the core technology to support the possible arrival of 5G speeds in what it calls "5G evolution". This basic work will take place in 400 markets by the end of the year. AT & T uses techniques such as increasing the number of simultaneous signals that each radio can receive and transmit (4×4 MIMO), using multiple spectrum bands to route signals faster (carrier aggregation) and integrating advanced signal processing techniques and bandwidth of its current cell sites. All this technology is expected to significantly improve speed, bandwidth and latency, but it is not quite a 5G network.

The AT & T spectral resources of 39 GHz place it in a good position in terms of spectrum. He owns 30% of the band in the top 50 markets. The capital intensity of setting up a 5G network using a millimeter wave spectrum and small cells can however weigh on the company because it also strives to feverishly repay his huge debt. This debt could affect the speed with which AT & T builds its 5G network. The management seems confident of being able to do both (and continue to increase its dividend year after year), but at some point, something must give.

T-Mobile and Sprint

While the merger between T-Mobile and Sprint has not been approved yet, T-Mobile's management is already seeing the way forward using Sprint's spectral resources. T-Mobile holds a small amount of spectrum in the 28 GHz band – about 12% of the top 50 markets – which could be used in a similar way to Verizon's and AT & T's millimeter-wave plans.

But, unlike its competitors, T-Mobile advocates the use of all low, medium and high frequency bands for its 5G network. T-Mobile is already deploying 5G technology on the 600 MHz spectrum it bought at auction last year. The lower frequency band is better for moving distances and penetrating buildings, allowing T-Mobile to have greater coverage with fewer cell sites. The low band spectrum, however, does not offer the same level of speed or low latency as the millimeter wave spectrum.

Sprint, on the other hand, has a median frequency stock of 2.5 GHz, which it currently deploys with LTE and 5G technologies. Sprint's key strategy with the 2.5 GHz spectrum is "Massive MIMO," a technique that allows the network to simultaneously process multiple inputs and outputs using multiple antennas, effectively increasing speeds and decreasing latency. Sprint's management says that 2.5 GHz is the "good point" for massive MIMO.

If and when Sprint and T-Mobile join forces, they will have an enviable position. The large amount of synergies that the two companies could achieve over the next five years could generate a lot of cash flow, allowing the combined company to grow its network faster than one or the other. other could not do it separately. In addition, T-Mobile could also be a big bidder at the next millimeter-wave spectrum auction, which would allow it to consolidate its position with the broadband spectrum to complete its 600 MHz plan.

Even if T-Mobile is able to win the race at a national 5G network using its 600 MHz spectrum, it will have to continue to invest in the deployment of frequencies in the medium and high bands in order to reach the same level of speed than Verizon. and AT & T's millimeter-wave networks. This means that T-Mobile's capital requirements are not going to slow down anytime soon. The company has, however, experienced strong free cash flow growth over the past two years, despite significant investments in the networks. Investors can expect this to continue, especially if the merger with Sprint goes through the scale and spectrum it needs to compete.

An elbow race

Each operator embarks on the deployment of 5G networks. Consumers will begin to see the first commercial products available in the coming months, and it will take them little more time to access a national 5G network if they wish. Of course, most consumers will need to upgrade to 5G-enabled devices to take advantage of these changes.

Even if we get closer to the real 5G networks, the work starts only for these operators. 4G was introduced at the beginning of the decade and carriers continue to work to improve this technology and their networks. These first 5G networks are certainly not the final stage for operators, and we should see a continuous evolution of technology and its capabilities, as operators and developers determine the best uses.