Wireless Companies to Start Small With 5G Rollouts

By Drew FitzGerald 

BARCELONA -- After a year of promising tests, wireless companies are finally setting deadlines for the rollout of the next wave of technology designed to revolutionize the way machines reach the internet.

A handful of companies in the U.S. and Asia are expected to start offering commercial fifth-generation, or 5G, service as soon as this year. Their plans will dominate much of the agenda at the coming week's Mobile World Congress, the annual confab here where telecom companies and their suppliers meet to strike deals and market themselves.

The optimistic timelines come with a caveat: Most 5G services debuting this year will fall short of carriers' visions of what 5G will ultimately be: cable-quality broadband linking billions of gadgets over the air. Companies like AT&T Inc., Verizon Communications Inc., Australia's Optus Pte. Ltd. and Finland's Elisa Oyj will start small, using just one element of a package of 5G engineering standards that are still being written.

The "fixed wireless" service coming this year beams broadband service into the home from outdoor antennae instead of bringing it by cable. It won't offer the superfast connections between mobile phones and other connected devices the new technology is designed to serve, at least to start.

The high-tech holdup owes to basic infrastructure: 5G technology, unlike past network upgrades planned around cellphones, will need millions of new cellular radio antennae that have yet to be installed. That gives an edge to landline companies with access to telephone poles, though it will take time even then for them to rig new radios along city streets.

Tests in Australia, China, Finland, Japan and South Korea have led carriers to promise more 5G service by early 2019. Most plans are a far cry from the type of service engineers say is possible in a few years.

New 5G technology is supposed to boost bandwidth, allowing cellphone users to download data at a gigabit per second or more, a speed comparable to the top-tier internet packages that cable companies offer today. The standards are also designed to make networks react more quickly, which would allow driverless cars and high-tech medical equipment to work online.

Equipment makers still need time to "seed the market" to make 5G devices work, said Ted Rappaport, professor at New York University's Tandon School of Engineering. Until phones and other machines come equipped with capable chips, "fixed wireless is kind of the lowest-hanging fruit."

It is hard to tell which devices will make the best use of 5G technology until chip costs come down, said Michael Murphy, North American technology chief for Nokia Corp.

"What's the killer app? Which ones make it and which ones don't, we don't know," he said.

Verizon is among the companies starting at square one. It plans to launch its first 5G service in Sacramento, Calif., after testing the technology around 11 U.S. cities. But it says true mobile service remains a few years down the road.

AT&T said it would offer fixed and mobile 5G service by the end of 2018, though the first customers will likely be using the service as a portable internet hot spot to do things like hook up laptops.

"Think of this as a puck," AT&T Chief Executive Randall Stephenson said in a recent investor call. "Because, really, the thing that's going to cause 5G to go slow more than anything else, it's just availability of handsets."

Write to Drew FitzGerald at [e-mail]

(END) Dow Jones Newswires

February 24, 2018 09:14 ET (14:14 GMT)

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