U.S. telecom major Verizon Communications Inc. VZ will start field trials for its upcoming 5G wireless network with its partners in 2016. The company is preparing for initial deployment of the next-generation 5G wireless networks in the U.S. in 2017. Verizon’s CEO Lowell McAdam recently confirmed the news at a Business Insider event in New York.
The wireless giant, which was the first to deploy the 4G LTE (Long-Term Evolution) network nationwide six years ago, will give trial run of the 5G wireless network at its Basking Ridge, N.J. headquarters early next year. Soon after that, the company is also likely to roll out some pilot projects with its vendors and select users in San Francisco, New York, and Boston. The company’s partners in its 5G projects are Cisco Systems Inc. CSCO, Ericsson LM ERIC, Qualcomm Inc. QCOM, Nokia Corp. NOK and Samsung.
Although several industry researchers have predicted that a full-fledged 5G network deployment will not start until 2020, Verizon expects some level of commercial deployment in 2017. Industry researchers expect the Asia-Pacific region to spearhead the global deployment of 5G wireless networks. However, neither South Korea nor Japan – the two leading countries opting for 5G network – are likely to start commercial deployment before late 2018.
Advantage of 5G
Verizon claims that its 5G network will provide a download speed of 1 Gbps (gigabit per second), which is 200 times the throughput of the currently available standard 4G LTE network. Latency period of data delivery will be in single milliseconds. Further, 5G technology is designed to be more power efficient than any other standard wireless networks available these days. Therefore, 5G-enabled mobile devices are likely to last much longer than their 3G or 4G counterparts.
Additionally, superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of Internet-connected devices, popularly known as Internet of Things (IoT). According to a recent report by research firm International Data Corporation (IDC), worldwide spending on IoT is slated to grow at a 17% compound annual growth rate (CAGR) to nearly $1.3 trillion in 2019 from $698.6 billion in 2015.
The Bottom Line
The U.S. telecom industry has lately emerged as an intensely contested space where success thrives largely on technical superiority, quality of services and scalability. Thus, in order to stay ahead of competitors, existing players need to be constantly on their toes to introduce innovative products. At this juncture, we believe Verizon’s drive for 5G wireless network bodes reasonably well for its future growth. The stock currently carries a Zacks Rank #3 (Hold).
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