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Verizon, Vodafone, China Mobile Surface in Different 5G Camps

Will Verizon Communications ( VZ ) and Vodafone Group, one-time partners, be on different sides in the 5G wireless standards debate? Next-generation 5G services were a hot topic at last week’s Mobile World Congress in Barcelona, Spain. Vodafone ( VOD ) surfaced as a surprise member of a group of wireless phone companies aiming to meld two variants of LTE (long-term evolution) technology as a path to 5G. Those companies include China Mobile ( CHL ), India’s Bharti Airtel, South Korea’s KT ( KT ), Japan’s SoftBank ( SFTBY ) and Vodafone. SoftBank controls U.S.-based Sprint ( S ). Verizon, on the other hand, said at the MWC that it will cooperate with Japan’s NTT Docomo ( DCM ), KT and SK Telecom on possibly different  5G specifications . Verizon in early 2014 bought out Vodafone’s 45% stake in their U.S. wireless joint venture, Verizon Wireless, for $130 billion. Two variants of LTE have existed in 4G networks worldwide. China Mobile, with the government’s backing, developed the “TD” variant, which stands for “time division” communications. Most of the world, including Verizon and Vodafone, used “FD,” or “frequency division” communications, in their networks, constructed starting in 2008. U.S. chipmaker Qualcomm ( QCOM ) has intellectual property tied to the “FD” LTE variant. China’s government, meanwhile, has been keen on harmonizing the TD and FD variants, aiming to help companies such as Huawei sell network equipment and mobile phones abroad. In India and China, mobile phone makers have sold 4G devices that support multiple transmission modes. India’s biggest wireless firm, Bharti Airtel, and Japan’s SoftBank were earlier adopters of TD-LTE. Vodafone, meanwhile, has been working with Sweden-based telecom gear maker  Ericsson ( ERIC ) and Huawei in some countries to meld the FD and TD technologies. At MWC, the five wireless firms — China Mobile, Vodafone, Bharti, KT and SoftBank — said they would support a five-year strategic plan to build a 5G “ecosystem” and converge the TD and FD technologies. Verizon, NTT and their partners, meanwhile, set technical trials for 2016 through 2018. Verizon’s 5G partners include Alcatel-Lucent ( ALU ), Ericsson, Cisco Systems ( CSCO ), Nokia ( NOK ), Qualcomm and Samsung.

AT&T Fires Back On 5G Amid Verizon Push, Touts 5G To Homes

Aiming to grab some 5G limelight back from Verizon Communications ( VZ ), AT&T ( T ) announced on Friday plans for trials of next-generation 5G wireless technology in 2016 and, in a surprise, touted 5G services to fixed locations such as homes and businesses, not mobile devices. Verizon ( VZ ) in September declared its intention to be a global leader , and the first in the U.S., in rolling out a 5G wireless network commercially. AT&T has been less vocal, but on Friday CEO Randall Stephenson said in a CNBC interview that 5G speeds could potentially match fiber-optic connections to homes. “Actually, we are getting performance and testing that says that we can get as good a performance off 5G wireless technology into the home as we’re getting off fiber today,” he told CNBC. On its Q4 earnings conference call on Jan. 21, Verizon also hinted at fixed broadband. “We would hope that the FCC moves quickly to adopt the rules to facilitate 5G deployment,” said Verizon CFO Fran Shammo. “(When you) think about 5G, it may not just be about mobility. It may be about other use cases; it’s not just about mobility.” AT&T agreed to deploy fixed broadband services to homes in rural areas using 4G technology as part of conditions tied to its acquisition of satellite TV broadcaster DirecTV Group in July. On Friday, AT&T  said that it will test 5G technologies in Austin, Texas, with Intel ( INTC ) and   Ericsson ( ERIC ). AT&T says that it sees a role for 5G in “virtual reality, self-driving cars, robotics and smart cities.” Tech Standards For 5G Wireless Not Yet Set AT&T says that it expects 5G speeds to be anywhere from 10 to 100 times faster than 4G LTE connections, much as Verizon has stated. Verizon has said that it plans to deploy 5G commercially in 2017, though its plans are still vague. AT&T said it expects to deploy 5G after standards are set. “We’re conducting our 5G trials in such a way that we’ll be able to pivot to compliant commercial deployments once 5G technology standards are set. The international standards body, 3GPP, will likely complete the first phase of that process in 2018,” the company said in a press r elease . Europe, South Korea, Japan and China all have 5G initiatives under way. South Korea plans large-scale 5G testing around the 2018 Winter Olympics. In Japan,  NTT DoCoMo ( DCM ) is gearing up for the 2020 Summer Olympics. The next World Radiocommunication Conference, where 5G spectrum allocation is expected to be discussed, isn’t until 2019. Many countries, including the U.S., are looking at high frequencies, such as 24 GHz and 37 GHz, for 5G services. However, 5G could surface earlier in bands below 6 GHz, some analysts say.  In that case, networks could continue using interfaces designed for LTE gear. Also, 5G marketing battles could start long before higher-bandwidth 5G services are ready commercially.

Verizon Talks Up 5G Wireless, AT&T Less Vocal

Marketing for 5G is revving up fast — well ahead of applicable wireless technology, which is moving from lab demos to field trials, with wide-scale commercialization years off. And 5G marketing is moving a lot faster at Verizon Communications ( VZ ) than at AT&T ( T ). Verizon in September declared its intention to be a global leader, and the first in the U.S., in rolling out a 5G wireless network. In September, Verizon said that its 5G wireless technology would be 50 times faster than its current 4G network, which is engineered to provide average data speeds in a range of 8 to 12 megabits per second (Mbps) during peak usage in urban markets. In January, Verizon CEO Lowell McAdam raised the bar. He touted 5G networks’ one-gigabit-per-second speed. That’s roughly 100 times faster than Verizon’s average 4G speed of 10 Mbps. It’s not clear, analysts say, whether McAdam was referring to peak or average 5G speeds. On Verizon’s Q4 earnings call, CFO Fran Shammo brought up its commitment to 5G numerous times. But on AT&T’s 4Q earnings call Jan. 26, not a word about 5G was heard. Said Shammo: “We are currently at the forefront globally talking about standards. We will be the first company to roll 5G out in the U.S., and we are currently preparing for (2016) field trials.” AT&T management’s latest public comment on 5G came at a Citigroup conference in early January. John Donovan, AT&T’s senior executive vice president of technology and operations, said that 4G networks still seem fast enough for most customers. “Speed has not been a big, successful marketing program recently,” he said, perhaps alluding to a wireless industry price war spurred by T-Mobile US ( TMUS ) and Sprint ( S ). AT&T has filed with regulators to test 5G services in Austin, Texas. Donovan indicated that AT&T may prefer waiting until the cost of 5G network equipment goes down as global manufacturing ramps up. First, standards need to be set, perhaps around 2018-19, analysts say. “We haven’t been overly public because what we want to do is — we want to keep the optionality of being early, mid- or on the back end (of deployment), depending on whether we’re going to optimize to (network) speed, capacity or cost,” Donovan said. While speed matters, analysts say that 5G will also be defined by new capabilities, such as streaming data to and from self-driving cars or to high-flying civilian drones. Verizon has touted plans to roll out 5G commercially in 2017, though its reach could be very limited. By being an early player in 5G, Verizon aims to influence industry standards. Many wireless firms — network gear makers such as Nokia ( NOK ) and Ericsson ( ERIC ), and chipmakers like Qualcomm ( QCOM ), Intel ( INTC ) and Samsung — have the same goal. Europe, South Korea, Japan and China all have 5G initiatives under way. S. Korea plans large-scale 5G testing around the 2018 Winter Olympics. In Japan, NTT DoCoMo ( DCM ) is gearing up for 2020. 5G will be a hot topic at the Mobile World Congress in Barcelona on Feb. 22 to 25. The arrival of 5G networks is important to gear makers because global capital spending on wireless networks is expected to be flat or down until deployment picks up. “Small-cell” radio antennas, which increase network capacity in urban areas, and software-defined network (SDN) technology are expected to be at the core of 5G deployments. Verizon has been pushing the Federal Communications Commission to allocate airwaves in very high radio frequency bands, above 24 GHz and around 37 GHz, to help jump-start 5G deployment. The U.S. regulatory process to dole out 5G spectrum could take a few years. The next World Radiocommunication Conference, where 5G spectrum allocation is expected to be discussed, isn’t until 2019. While many countries are looking at high frequencies, one view is that 5G services could surface earlier in bands below 6GHz. In that case, networks could continue using interfaces designed for LTE gear. The industry in late 2015 approved an interim “4.5” standard that carries the marketing term “LTE-Advanced Pro.” 5G deployment could take two tracks, says Tristan Gerra, an analyst at R.W. Baird, in a report. He says that a version of LTE could be marked as 5G early on, until higher-bandwidth “real” 5G is ready commercially. What’s clear is that  4G networks aren’t going away anytime soon. Research firm Ovum forecasts that by 2020, 3.62 million people will subscribe to services delivered via 4G LTE networks, up from 1.05 billion in 2015.  Ericsson predicts 150 million 5G subscriptions worldwide by 2021. Verizon says that it does not expect 5G networks to replace the existing 4G ones. Consumers will still be viewing Netflix ( NFLX ) on Apple ( AAPL ) iPhones and other devices for a long time. Verizon plans to overlay 5G capabilities in markets, most likely urban areas, to provide ubiquitous street coverage for self-driving cars and other emerging uses. Verizon’s partners include Alcatel-Lucent ( ALU ), Ericsson, Cisco Systems ( CSCO ), Nokia, Qualcomm and Samsung. Verizon has been working with carriers in Japan and South Korea as well. “(Verizon believes that) one of the primary reasons why Japanese carriers are at the forefront of 5G is because cities like Tokyo and Seoul benefit from high levels of densification,” said Amir Rozwadowski, a Barclays analyst in a report. While speed matters, wireless firms are also providing service for applications that require always-on, low-data-rate connections. The apps involve data-gathering industrial sensors, home appliances and other devices oft referred to as parts of the Internet of Things. Image provided by Shutterstock .