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Long Story Short - The Race for 5G Wireless Networking and Connectivity
(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the "Balanced" section)
5G describes the next-generation in technology used in wireless networking and cellular devices capabilities replacing the existing LTE mobile networks. 5G wireless networking enables a new horizon in the creation of consumer experience incorporating revolutionary new speeds in data transmission, latency reduction, and supported reliability for cloud and computing technology. It has begun to branch out throughout the United States and already plays a key role in foreign technology markets. 5G allows for a new era of consumer and manufacturer benefits, supplementing the job market through development and providing users with expanded connectivity and interactivity.
Wireless Network Capabilities: 5G wireless networking and technology provides remarkable new speeds and benefits for both its consumers and manufacturers. The International Telecommunications Union (ITU) released information for the standardization of 5G networking capabilities and consistent speeds at which it should be running at. The ITU guidelines for standard 5G networks are 20 GB/s for down-link, 10 Gb/s for up-link, latency of 4 milliseconds for mobile devices, and 1 millisecond for reliable communication devices. The president of NJIT, Joel Bloom stated, “5G is speed. It accelerates the ability to speak on the phone. It accelerates the ability to download on your phone, or your laptop or other devices.” The vice president of Verizon, Anthony Lewis also weighed in, “What they can do with this network, with this level of speed and low latency, unbelievable what can be done.” The implementation 5G will allow for a new level of technology and inter-connectivity for consumers, businesses, and U.S. infrastructure. 5G wireless connectivity will be more energy efficient incorporating always-on technology reducing modem power use depending on the quantity of information and traffic flowing through it.
Expanding Horizons: A technology board formed of respected technology giants including former Alphabet chairman Eric Schmidt, LinkedIn founder Reid Hoffman and former Aspen Institute chief executive Walter Isaacson has been advising the United States Defense Department on the necessity of 5G networking. The board stated, “the leader of 5G stands to gain hundreds of billions of dollars in revenue over the next decade, with widespread job creation across the wireless technology sector. The country that owns 5G will own many of these innovations and set the standards for the rest of the world.” If the United States expands low-band spectrum networking development for commercial use, it would cement its spot as a leader in wireless connectivity incentivizing innovation for domestic companies. United States wireless network and communications companies would be able to expand into new research, manufacturing, and development opportunities.
Job Opportunities: United States wireless and telecom companies are developing and looking to release 5G technology which would provide a multitude of new job opportunities. Verizon has been aggressive in its push forward to deploy its 5G wireless networking partnering with vendors such as Apple in order to create the necessary specifications for devices. AT&T released its standards for its 5G devices in October 2018. The vice president of Verizon, Anthony Lewis stated, “we’ve started with 30 cities around the country, this 5G build, but it is a build. It is putting nodes in the ground, running fiber. We’re putting in these small cells in and around, for instance this campus, or in and around a train station, or in and around a sports stadium to help with capacity.” The implementation of 5G low-spectrum broadband will create new jobs as infrastructure needs to be expanded and built in order to meet the requirements for 5G technology. 5G wireless connectivity would require a massive amount of construction laying out new powerful cell transmitters, towers, and wiring to connect all of the devices, cars and buildings. Philip Beachem, the New Jersey Alliance for Action President stated, “Engineers, contractors, business labor union leaders, people who do a lot of this work, all of this work requires a backbone, whether it be a cell tower or whether it be a tower on a building.” The 5G infrastructure, which is already being laid out in cities such as Dallas and Los Angeles, will greatly supplement the job market.
Foreign Big Tech: The Chinese Telecom company Huawei poses a significant competitive threat, dominating the development of 5G wireless networking and is a leader in innovative 5G technology. Two other companies, the Swedish company Ericsson and Finnish company Nokia have also vastly expanded into 5G capabilities and low-spectrum wireless networking putting U.S. companies behind. The United States Defense Department stated, “if China leads the field in 5G infrastructure and systems, then the future 5G ecosystem will likely have Chinese components embedded throughout, this would pose a serious threat to the security of D.O.D. operations and networks going forward.” Sharing low-band spectrum spaces could pose a significant security risk to the government and U.S. tech companies.
U.S. Lacks Necessary Infrastructure: The United States lacks the infrastructure to provide 5G cellular connectivity and requires a strategy to implement new low-band spectrum technology. Four major phone companies; AT&T, Verizon, T-Mobile, and Sprint, look to develop and introduce 5G cellular networks plans. AT&T has created 5G mobile hotspots in 12 cities to start trial testing for devices. Verizon began an advertising campaign for a home network incorporating 5G services. Both the Chinese and European governments reserved 5G low-band spectrum networking infrastructure allowing them to cost effectively and efficiently cover their countries with the components necessary for 5G wireless capability. The United States has reserved low-band spectrum spaces solely for military use. Google had tested transmitters allocating them on around 70,000 towers which only covered 11.6% of the United States with high-band spectrum at 100 megabits per second and 3.9% at 1 gigabit per second. If low-band spectrum transmitters were used instead then it would provide network speeds at 100 megabits per second for 57% of the population and 1 gigabit per second for 21%.
Government Intervention: The United States low-band spectrum spaces are reserved for military purposes and are not allotted for commercial use. The lack of sufficient space for 5G commercial communications poses a challenge for U.S. wireless companies making it more expensive, slower, and impeding progress. The Defense Department board stated that United States government lacked the innovation to successfully create a broadband spectrum commercial network supporting 5G. 5G networking requires low-band spectrum for signals to travel at efficient speeds and farther distances than high-band spectrum needing less infrastructure. The disincentive for commercial U.S. 5G companies creates a disadvantage for manufacturers and negative feedback loop. The Trump Administration recently lifted the ban on big tech companies purchasing equipment from the Chinese Telecom company Huawei which may help to ease the burden on U.S. companies looking to manufacture 5G transmitters and equipment.
Competitive International Market: Vodafone Group Plc, the U.K.’s second 5G wireless network, will release its 5G services on Wednesday, initiating a commercial rivalry with EE owned by BT Group Plc, shaping a new frontier for sales and marketing. Vodafone offers 5G Technology with greater download and reliable cellular connections to compete with a larger saturated market and cement business opportunities with early users. CK Hutchison Holdings Ltd.’s Three U.K. and Telefonica SA’s O2, Britain’s other mobile providers look to provide 5G coverage by the end of the year in order to maintain sales with their competitors. Ben Stanton, Canalys analyst, stated “5G is a massive opportunity for the smartphone sales business of operators like Vodafone. For the first time in a decade, customers will be compelled to upgrade both their device and their tariff at the same time.” CCS Insight analyst, Ben Wood, said “If you can associate your network brand with being the best for 5G then that’s going to be a big leg-up on your rivals.” The 5G speeds and reliability provided offer an important source of revenue for network and cellular companies.
https://www.nytimes.com/2019/07/01/business/dealbook/huawei-5g-national-security-trade.html Andrew Ross Sorkin July 1, 2019
https://media.defense.gov/2019/Apr/04/2002109654/-1/-1/0/DIB_5G_STUDY_04.04.19.PDF United States Defense Department
https://www.njtvonline.org/news/video/the-future-of-cell-service-is-5g-but-what-will-it-cost-consumers/ Brenda Flanagan July 1, 2019