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5G Wireless Service: The Next Big Thing in Global Telecom

The need to remain connected is a human need. An era of digitization and technology is essentially built on this need. It is here that telecommunications come to the fore as a necessary utility. The rising demand for technologically superior products has been a silver lining for the telecom space in an otherwise tough environment. With the U.S. telecom industry continuously evolving, companies in the league are fighting it out to stay abreast of competition. The latest in the league is the upcoming 5G wireless technology.

According to the research firm ABI Research, 5G network deployment is expected to ramp up after 2020 and its market size may reach $247 billion worldwide by 2025. North America, Asia-Pacific, and Western Europe will be the three regions that will pioneer 5G network deployment.

Several industry researchers hold that 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. Naturally, 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. In Feb 2016, another U.S. telecom giant AT&T Inc. T requested the Federal Communications Commission (FCC) to grant a license to test 5G technologies on 3.5GHz, 4GHz, 15GHz and 28GHz frequency bands.

Last month, T-Mobile US Inc. TMUS sought the FCC’s 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. Qualcomm Inc. QCOM, the largest manufacturer of wireless baseband chip set globally, is working hard to develop chipsets for the 5G mobile standard.

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.  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.

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QUALCOMM INC (QCOM): Free Stock Analysis Report
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