No one doubts the fifth generation of mobile network technology is fast approaching. 5G technology promises dramatically higher network speeds and more stable network connections, among other benefits intended to transform the mobile communication landscape. However, transformational shifts in technology typically come along with some significant business risk. In the face of this risk, the two largest mobile operators in the United States by subscriber base, Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), have staked out differing positions on the question of when to commit to 5G deployment.

The 5G Roadmap

5G technology has been in active development in the research and development departments of major mobile operators and in industry groups for some time. The industry's technical standards body, the Next Generation Mobile Networks (NGMN) Alliance, published a 5G white paper in February 2015. This document outlines in detail basic mobile operator requirements intended to pave the way for standardizing and developing 5G technology in the coming years. Standardization helps to ensure the compatibility of technologies and associated products in an industry, generally reducing business risk across the industry and making product development more efficient.

Following the release of the white paper, the NGMN Alliance suggested, and most industry experts agreed, the earliest date for initial deployment of commercial 5G networks was likely to be 2020 once standardized technical requirements and design principles had been decided. However, in September 2015, Verizon threw the industry roadmap into disarray by announcing plans to launch an independent 5G development program in partnership with some of the world's most important mobile technology and hardware companies, including Intel, Qualcomm, Cisco, Nokia and Samsung. The stated intent of the collaborative program is to ready 5G technology and hardware for commercial deployment by Verizon and its partners in 2017.

The announcement took most in the industry by surprise. While many operators around the world have announced plans for 5G tests and other development activities, as of January 2016, no other major mobile operator has announced plans to deploy commercial 5G technology before 2020. To be clear, Verizon is under no obligation to wait for further standards to be developed by the NGMN Alliance. In fact, Verizon took a similarly aggressive approach to implement the current generation of mobile technology, known as 4G LTE, which proved successful.

AT&T's Response

AT&T and its wireless telecommunications subsidiary, AT&T Mobility, have worked vigorously to pump the brakes on the growing excitement that Verizon's announcement has elicited from industry analysts, investors and hardware developers. Within days of the announcement, chief executive officer (CEO) of AT&T Mobility, Glenn Lurie, suggested to the media that Verizon's announcement amounted to little more than hype. "We're not at a point to be making promises or commitments to customers as to what 5G is," Lurie explained to a CNET reporter, noting the industry had not yet settled on technical standards for the technology. "Let's make sure that before we start hyping what (5G is) going to be, that those standards are agreed to."

In December 2016, Tom Keathley, senior vice president of wireless network architecture and design for AT&T Mobility, authored a blog post on the AT&T corporate website titled, "5G: Separating Fact from Fiction." Without mentioning Verizon by name, Keathley labeled the company's 5G plans as "marketing ploys" based largely on hype and devoid of real substance. He further discussed the importance of waiting for the release of a set of concrete technical standards in late 2019, arguing "there’s greater value in encouraging industry consensus around the 5G standards."

AT&T is not the only observer regarding Verizon's 5G plans with skepticism. Analysts, researchers and others are regularly quoted in industry media expressing doubts about Verizon's ability to meet its own expectations. That said, the company has built a record of success based on one of the nation's most important and technically advanced wireless networks. Indeed, Verizon was the first U.S. company to deploy 4G wireless technology ahead of AT&T and many others. Verizon is also partnering with some of the world's most innovative and successful mobile technology and networking companies in its bid for 5G first-mover status.

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