U.S. national wireless carrier T-Mobile US Inc. TMUS is the latest company set to adopt the emerging 5G wireless network technology. Recently, the company sought the telecom regulator Federal Communications Commission’s (FCC) approval for a millimeter wave radio test license using the company’s 28 GHz and 39 GHz frequency bands to conduct test run of 5G wireless standards.
Several industry researchers hold that the 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 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 U.S. telecom behemoth 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. Last month, another U.S. telecom giant AT&T Inc. T requested the FCC to grant a license to test 5G technologies on 3.5GHz, 4GHz, 15GHz and 28GHz frequency bands.
T-Mobile US has formed partnerships with Ericsson AB ERIC and Nokia Corp. NOK to set up field and lab trials for 5G networks. A full-fledged 5G network deployment will not start until 2020. T-Mobile US and AT&T too are targeting the same time frame to get their 5G network ready for commercial deployment. However, Verizon is so far leading the race in this regard.
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 T-Mobile US’ 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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