AT&T overhyped 5G, but it does have the most credible strategy in the USA

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The hype surrounding the USA’s 5G program died a little over the past week, with the pro-longed 28 GHz spectrum auction attracting limited interest, and AT&T being castigated (again) for marketing LTE services as ‘5G’. However, behind the obsessive focus on the USA’s first, small-scale roll-outs, and its status as the home of the ‘world’s first’ main-stream 5G services, there are genuinely interesting plans afoot. This is largely thanks to the fact that AT&T and Verizon are actually doing what most operators have only spoken about, and tying 5G to broader new platforms such as virtualization and on-demand enterprise services.

AT&T’s 5G roadmap has two big points in its favor:

AT&T has set out its roadmap for 5G services, which sounds more concrete and real world than most operators’ ‘visions’. This is for two reasons. One, 5G is a central part of the company’s broad ‘Domain 2.0’ program to introduce virtualization and software-defined net-working across its networks, fixed and mobile, transforming its economics and its supply chain. By contrast, though most operators talk about 5G and virtualization being complementary, most are rolling out early radio upgrades well before their digital platforms are mature or even planned.

Two, AT&T is focusing on enterprise services. Almost all operators agree these will be the main way to drive new revenues from 5G, and therefore achieve decent ROI. But the majority of MNOs are deploying 5G initially to support faster data rates for established use cases, most of them geared to consumer mobile broadband or connected cars. There is, therefore, a big gap between the first wave of deployment and capex spending, and the concrete plans to support those new use cases and revenue streams in the enterprise and IoT.

Its ‘three pillars’ add up to a 5G blueprint for enterprises:

AT&T has set out “three pillars” of 5G strategy, which it says will add up to a toolbox to help enterprises adopt 5G-enabled applications to help transform their own businesses. These pillars are fixed wireless – the first focus of its current roll-out; edge computing; and a rapid move towards nationwide coverage. That combination will support the full range of enterprise requirements, including ubiquitous coverage for applications like as-set tracking; targeted fixed capacity for very high bandwidth use cases in specific locations, such as VR-assisted training; plus localized cloud computing resources to add data analysis to the enhanced connectivity of 5G, for instance, to provide rapid AI-enabled decision support for humans or robots, on-premise.

As it expands 5G coverage, gaps will be filled by continuing to enhance LTE, including for fixed wireless. “In the coming weeks, we will offer multiple speed tiers up to 50Mbps” based on LTE-Advanced, it said. While it now has fixed 5G available in 12 cities, with the Netgear Nighthawk device, LTE-A is being rolled out to 400 markets, leveraging AT&T’s fiber network, which the operator says now comes within 1,000 feet of 8m business customer locations in the USA, and connects 2.2m sites.

Full mobility will be the next step. Although, like Verizon, AT&T has deployed its first 5G networks to support fixed wireless access (no handsets required), it has promised to add mobile services rapidly, even in its 39 GHz spectrum. However, true wide area mobile services will require lower frequencies – the cost to achieve broad coverage with the limited range of millimeter wave (mmWave) spectrum would be astronomical ($350bn to $570bn for the whole of Europe, says the head of Deutsche Telekom, so the USA would be comparable in scale).

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Caroline has been analyzing and reporting in the hi-tech industries since 1986 and has a huge wealth of experience of technology trends and how they impact on business models. She started her career as a journalist, specializing in enterprise and carrier networks and in silicon technologies. She spent much of her journalistic career at VNU Business Publishing, then Europe’s largest producer of technology publications and information services . She was publishing director for the launch of VNU’s pan-European online content services, and then European editorial director. She then made the move from publishing into technology market analysis and consulting, and in 2002 co-founded Rethink Technology Research with Peter White. Rethink specializes in trends and business models for wireless, converged and quad play operators round the world and the technologies that support them. Caroline’s role is to head up the wireless side of the business, leading the creation of research, newsletters and consulting services focused on mobile platforms and operator models. In this role, she has become a highly recognized authority on 4G systems such as LTE and WiMAX, and a prolific speaker at industry events. Consulting and research clients come from major mobile operators, the wireless supply chain and financial institutions.

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