Wireless Players Tout 5G as They Await Next Smartphone Wave
What to expect at the annual Mobile World Congress in Barcelona
While U.S. wireless carriers battle each other by pushing unlimited data plans riding on their vaunted 4G networks, an annual industry gathering in Barcelona next week will be looking to the future.
The more than 100,000 attendees won’t be able to walk very far without seeing or hearing about 5G, the next generation of wireless technology that is still years away, with uses not yet entirely understood.
Missing from the show is Apple Inc.—a perennial no-show—but also absent is any significant new device launch, in contrast to the past three years when Samsung Electronics Inc. used the event to introduce the latest iteration of its flagship Galaxy smartphone. Reeling from a high-profile recall last year, Samsung is planning to unveil its next flagship smartphone in late March.
While carriers tout that 5G tests are producing blazing speeds— AT&T Inc. has projected speeds of 10 to 100 times faster than typical 4G connections—the first standards for the platforms won’t likely be set until next year.
And although limited exhibitions will happen— KT Corp. has long planned to have 5G running when South Korea hosts the Winter Olympics a year from now—real 5G deployments aren’t likely until 2020.
“There will be lots of 5G talk,” said Jan Dawson, chief analyst at Jackdaw Research. “It’s mostly about marketing and positioning at this point.”
Last week, both AT&T and Verizon Communications Inc. highlighted their latest testing of 5G technology, working with equipment makers Nokia Corp. and Ericsson AB. AT&T has hit speeds of 14 gigabits per second in lab tests, and plans trials for later this year. Verizon said it would use 5G technology to deliver home broadband to test customers in 11 U.S. markets by midyear.
The positioning is important for some companies that are looking to get a better foothold in the mobile market. Intel Corp., long dependent on personal computer sales, has stressed this opportunity. At an analyst meeting earlier this month, CEO Brian Krzanich mentioned the term “5G” on 19 different occasions.
“If we don’t hit 5G now, I believe, actually over the next 18 months, we’ll not be in a leadership position,” Mr. Krzanich said.
Unlike previous network overhauls, the shift to 5G technology will bring the network closer to users. It runs on smaller antennas that can attach to lampposts rather than huge towers, shortening the distance signals are transmitted. The change will require massive infrastructure spending: Accenture estimates U.S. operators alone could spend $275 billion over seven years to implement 5G.
Aside from faster speeds, 5G technology will drive down the latency, or the speed at which two devices communicate, to allow almost instantaneous reactions. This would be crucial in uses such as the operation of driverless cars.
Cable companies in the U.S. see an opening for 5G to use their extensive wireline networks. Charter Communications Inc. CEO Tom Rutledge said on a recent conference call that it is “becoming increasingly obvious that our network is the future of communications as new standards like 5G are being developed.”
How these networks are built will also depend on who is building them at a time when many people expect consolidation in the telecom and media sectors to ramp up. For example, Verizon has shown interest in buying Charter, the Journal has reported, in a deal that might affect both companies’ approach to 5G.
“What does the world look like after the next wave of consolidation,” said Blair Levin, a former Federal Communications Commission official who headed up the agency’s 2010 National Broadband Plan. “Technology matters a lot, but the market structure is also pretty important.”
