The dominant mobile communication technology in the United States, fourth-generation Long Term Evolution (4G LTE), first appeared in December 2010 when Verizon Communications Inc. (NYSE: VZ) rolled out a commercial network to customers in several dozen cities. At the time of writing, in June 2016, mobile operators and telecommunication equipment companies around the world were hard at work developing the technologies and hardware systems required to bring the fifth generation of mobile networking to market.
5G promises vast improvements in speed, responsiveness and scale to support all kinds of bandwidth-hungry applications and technologies existing in 2016 and coming tomorrow. Mobile operators expect to deliver 5G mobile download speeds in the gigabits-per-second range, around 50 times faster than existing 4G LTE technology. Aside from raw speed, perhaps the most transformative feature of 5G technology is its ability to accommodate the tens of billions of connected devices, smart objects and embedded sensors expected to come online in the coming years as the internet of things (IoT) becomes a reality.
Mobile operators, equipment companies and industry analysts agree that the first mobile 5G networks are expected no earlier than 2019, with a commercial roll-out in 2020 or later. While wide-scale deployment of mobile 5G is a few years away, a number of companies are vigorously engaged in the development and testing of 5G equipment to participate in the eventual build-out of 5G networks around the world.
Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) is a Swedish telecommunication equipment and services company with a market capitalization of $26 billion. The company operates at the forefront of 5G hardware development, participating in field trials and research programs with mobile operators around the world, including Verizon, AT&T Inc. (NYSE: T), China Mobile Ltd. (NYSE: CHL) and South Korea's SK Telecom Company Ltd. (NYSE: SKM), among many others. Ericsson's 5G radio prototype, which provides 5G wireless network access, has been widely deployed for real-world testing in the United States, South Korea, Japan and Sweden. These prototypes incorporate a bundle of cutting-edge technologies, including new antenna and receiver technology, to bring the promise of 5G to reality. Ericsson's development of 5G technology also informs ongoing advancements in its 4G LTE equipment business.
Nokia Corporation (NYSE: NOK) is a Finnish telecommunications equipment and data networking company with a market capitalization of $32.8 billion. Like Ericsson, Nokia has entered advanced testing phases on new 5G radio access products for eventual deployment by mobile operators around the world. It has ongoing collaborative research and testing programs with Verizon, China Mobile, SK Telecom, Japan's NTT Docomo Inc. (NYSE: DCM) and Deutsche Telekom AG (OTC: DTEGY), among others. Nokia expects to begin phasing in 5G capabilities on top of some 4G LTE networks in 2019, with full 5G roll out in the following years. In early 2016, Nokia acquired a 91.8% ownership stake in Alcatel Lucent S.A. (ALU.PA), a French telecommunications equipment company with its own advanced 5G development program. Nokia has yet to describe how the acquisition might affect its 5G development plans.
Qualcomm Inc. (NASDAQ: QCOM) develops and commercializes wireless communication technologies, including the 3G CDMA standard and the 4G LTE standard. In addition to licensing intellectual property associated with these technologies, the company also develops and produces software and integrated circuits, or chipsets, used in wireless network equipment and mobile devices. In the near term, Qualcomm is pursuing a parallel development strategy covering 4G, 5G and Wi-Fi technology to support multimode mobile devices that can jump between networks seamlessly as 5G network capabilities are phased in over time. The company is closely involved with the development of 5G industry standards and has produced technological innovations in millimeter wave technology, antenna technology and other technical areas of 5G development. Qualcomm is based in California and has a market capitalization of $80.6 billion.