AT&T's 5G Strategy: Too Soon For Businesses To Take Seriously?

Telecom giant AT&T last week unveiled its 5G strategy for 2017, and declared it would not wait for the final standards for the technology to be complete to begin its "network evolution." But with 4G and 4.5G technology still at the forefront, some in the industry wonder if AT&T could be putting the cart before the horse.

5G wireless technology promises to increase data speeds over a mobile internet connection dramatically. True 5G standards are still being developed, and aren't expected to be finalized until 2019. But AT&T said last week it had brought the timeframe for 5G standards up globally into the 2018 timeframe, meaning that it is already solving some of the latency and connectivity issues being worked out in the standards process.

"Our strategy all along has been to pull the standards up as fast and furious as we can," said John Donovan, chief strategy officer and group president of AT&T's Technology and Operations unit at the 2017 Citi Internet, Media and Telecom conference. "We are very optimistic."

[Related: AT&T Launches 5G Business Customer Trial Aimed At Rivaling Wired Broadband Speeds]

At the conference, AT&T announced that it had planned a 5G trial for residential customers in the Austin, Texas area during the first half of 2017. The trial will let consumers stream DirecTV NOW, AT&T's pay-TV streaming service, over a fixed wireless "5G" connection. The carrier also said it would test additional "next-generation entertainment services" over fixed 5G connections as part of the trial.

AT&T in December revealed that it had launched a 5G business customer trial in the U.S. with Intel. The trial is providing a high-bandwidth cellular network service in one of Intel’s Austin offices, and Donovan said that the trials have so far yielded a "positive surprise" regarding network performance. AT&T has also conducted some lab trials for 5G technology, the carrier said.

But the Dallas-based carrier may be getting ahead of itself with 5G because market demand isn't there yet, according to Patrick Oborn, co-founder of Sandy, Utah-based master agent Telarus that partners with the major carriers, including AT&T.

"I think AT&T is trying to do 5G like they did with getting the iPhone exclusively in the beginning. They want to be first to market, and they know from the iPhone days that being first to the market can make those customers stick around," he said.

AT&T's Donovan said that these trials demonstrate that the carrier is jumping head-first into wireless network evolution.

"5G is different because its performance is going to enable a whole bunch of new-to-the-world use cases, whether its live maps, [or] autonomous cars. The performance of that network is going to be a potential game-changer," he said.

However, 4G still has legs, T-Mobile's outspoken CEO John Legere said last week at CES 2017, following AT&T's 5G announcement. Legere criticized AT&T's "euphoria around 5G," and while admitting that 5G will be a game-changing technology, Legere explained that Bellevue, Wash.-based T-Mobile has quietly deployed 251 new points of presence (PoPs) on its network and has been focusing on injecting more speed into its 4G LTE network.

"T-Mobile will be the first, even before 5G, to provide gigabit LTE service on 4G, not in our labs, but on our public network in 2017," Legere said.

AT&T also said that the continued development of its 4G LTE network is still "essential" to laying the foundation for its 5G evolution. The carrier said that it also expects to reach peak theoretical speeds of up to 1 Gbps at some of its cell sites this year.

IoT use cases could prove to be one of the drivers for 5G adoption and AT&T's ticket to capturing early adopters if the carrier is first to the market with exclusive 5G solutions, Telarus' Oborn said.

"That has to be [AT&T's] play. Let's be first and let everyone chase us," he said.

Telarus' Oborn said that he's been hearing more about 4G and 4.5G, technology than 5G technology. 4.5G technology [also called LTE Advanced] uses the same basic standard that 4G uses, except it achieves more throughput by bonding together different channels of wireless spectrum. This emerging technology is currently being developed by Ericsson, Nokia, Qualcomm, and Huawei, among others.

While 5G is an interesting technology, it's also a completely different language that requires new networking hardware and software to make it work, Oborn said.

5G could be a great technology for consumers, but carriers, such as AT&T, are going to have a hard time garnering much interest from business customers because of the data caps many carriers impose, he said.

"It's not because of the technology, but the way [carriers] monetize their networks is going to keep them from hitting a home run on the business scale because businesses push a lot more data than consumers," Oborn said.

Faster network speeds are important as more businesses rely on the cloud, but wireless will always be relegated to being a backup connection as long as carriers impose data caps, he said.

"I don’t care if its 17G, fiber and coax is unlimited, so a business doesn't need to worry about data usage plans," Oborn said. "It has to be unlimited, period."