If you know what to look for, US Mobile Operator 5G plans are not all that different at the core. They certainly differ by available capital, spectrum holdings, and marketing.
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When US mobile operators are making public statements around their 5G plans and activities, there is a mix of substance and aspirational marketing. To understand where they are, one must put this into context based on an understanding of 5G technology, the timing of 5G standards, and each mobile operator’s assets. Verizon, AT&T, T-Mobile, and Sprint have all made public announcements of their current plans. T-Mobile joined Verizon and AT&T with its own announcement with Nokia on February 23, 2016.
Just to be clear, each mobile operator can make strategic shifts through a major refocus of plans or a change in financial situation caused by an influx of subscribers, an acquisition, being sold, or by partnering with another huge company. And 5G is four to five years away from commercialization and six to nine years from being considered mass-market. A lot can change. For now, US mobile operators can be judged by their current situation and plans, but any future plans mentioned have to be taken with a grain of salt.
The Big Four US Mobile Operators
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COMMENTARY
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1) Verizon
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Strengths: available capital, core network evolution, fiber assets (backbone network, FTTH, XO acquisition), spectrum (XO acquisition)
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Weaknesses: network density (history of 800 MHz spectrum for CDMA and 700 MHz for initial LTE buildout followed by the used of AWS spectrum for its second wave of LTE buildout)
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ABI Take: Verizon certainly has a big marketing component to its announcements, but the company is truly aggressive with its plans. It has partnered with Ericsson, Cisco, Nokia (for over half of its footprint), Qualcomm, and Samsung on 5G trials and completed early tests of 5G equipment in mm wave spectrum. Verizon formed the 5G Open Trial Specification Alliance with NTT DoCoMo, KT, and SK Telecom, and has acquired XO Communications’ fiber network business. This acquisition provides Verizon with more fiber assets, but the key part of the acquisition was to gain access to licensed millimeter wave spectrum with which to deploy 5G. Verizon will lease XO’s LMDS spectrum with an option to buy it. This spectrum consists of 102 licenses in the 28 GHz and 39 GHz bands – two bands often cited as key bands for 5G. Verizon is addressing its network density issues with the deployment of small cells. Its timeline of launching a commercial 5G service by perhaps 2017 is impossible given the stage of standardization. However, what Verizon will do will incorporate everything that is known about the direction 5G is taking, and a lot is known on the radio and antenna side to make mm wave spectrum usable. The least is known about the waveforms that will be used, but this part will be software upgradeable unless a filter-bank method requires new front-end components. It is highly likely that Verizon’s pre-standard network will be used for applications like wireless fronthaul, backhaul, and fixed wireless access, though it could offer mobile routers as well. Initially this spectrum will be used for real-world test experiments to shape network planning. Of course, in addition to heavy participation in the standards process, Verizon is looking for its work here to influence standards while developing new intellectual property based on discoveries from real-world experience.
2) AT&T
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Strengths: available capital, core network evolution, fiber assets (general telecom assets, FTTC, and FTTH)
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Weaknesses: network density
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ABI Take: AT&T will time its commercial readiness for 5G with near-completion or completion of 5G standards in the 3GPP. It is working on research and development with Ericsson and Intel. AT&T is on a similar path as Verizon Wireless with the exception of Verizon’s commercial claims for 2017 or 2018. AT&T’s publicly stated timeline is more cautious and realistic, aiming for a 2020 rollout. Instead of deploying pre-standardized base stations with the hope of being able to upgrade them, AT&T is foregoing more dramatic marketing to provide public updates that are much more likely to hold true to timing. AT&T will learn from Verizon’s mistakes here as it did with 4G. The reality is that they are both testing equipment and the behavior of millimeter wave communications.
3) T-Mobile
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Strengths: Network density (higher frequency spectrum relative to Big 2)
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Weaknesses: Lack of scale and capital relative to the Big 2.
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ABI Take: T-Mobile will be behind Verizon and AT&T and will likely look to leverage the economies of scale that develop in the wake of Verizon and AT&T’s path. T-Mobile may end up being the least aggressive with 5G out of the Big 4, though its parent company, Deutsche Telecom, could play a major role in changing this. T-Mobile will begin testing 5G equipment in the 28 GHz band in 2H 2016 with Nokia. T-Mobile’s CEO uses colorful words when describing Verizon’s 5G commercialization plans for 2017/2018.
4) Sprint
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Strengths: Network density (due to having higher frequency spectrum relative to Big 2 and its small cell deployments in 2.5 GHz), having Softbank as a parent company to infuse capital.
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Weaknesses: Lack of scale and capital relative to the Big 2.
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ABI Take: Sprint has only mentioned that it will test 5G equipment later in 2016. Sprint has the potential to be a wild card here. Sprint will not end up being as aggressive as Verizon or AT&T, but Softbank’s capital and involvement is likely to play a major role here. Softbank is working with Ericsson on 5G trials in Tokyo, including testing peer-to-peer connectivity and both outdoor and indoor connectivity between devices and base stations. Nevertheless, Sprint does not believe commercial 5G networks will launch in the US before 2020, which is fairly accurate, but Sprint goes as far as to say that it will be around 2025 before 5G hits the US commercially, which is about four or five years later than what the reality will be. Sprint will most certainly launch 5G well before then.
Each of the US Mobile Operators has pragmatic internal plans for commercial activity that are roughly similar, although their plans for testing equipment and putting up pre-standard equipment differ. Some of them are being much more aggressive than others. Verizon is at one extreme, where they led with a very fast and wide coverage of LTE and want to hold on to their technological leadership with 5G while addressing capacity issues. At the other extreme, Sprint seems late to the party to announce testing, but it is also owned by Softbank, which is aggressively testing the network in Japan. AT&T has the network and capital to lead, but is publicly taking a very pragmatic approach. T-Mobile has more pressing concerns at the moment as it focuses on value service with high data rates and competitive pricing, yet has still announced its own testing plans. Capital and network density are two very important factors here since the very dense deployment needed will rely on these. Existing small cells will act as 5G anchor base stations with wired backhaul, while other 5G base stations can connect wirelessly using the same cm or mm wave spectrum used for access. While Verizon’s commercialization claims cannot be taken seriously, its R&D and 5G network planning, combining its current core network transformation, fiber assets, LMDS spectrum, and many partnerships, should be taken very seriously.
