The cellular (wireless) telecommunications business will reconfigure itself with the deployment of 5G LTE wireless technology by 2020. 5G LTE is about capacity, not speed. It will be deployed to meet users’ data demands as more customers use LTE; however, data speed will not change. It will allow more efficient utilization of the wireless spectrums, advanced interference cancellation, higher numbers of connected devices, higher efficiency, lower battery consumption and better coverage. It will reduce cost, merge wireless with satellite networks to provide high-tech services to rural America at greatly reduced cost. It will accelerate the movement of basic telephone services from analog/fiber to wireless and reduce construction and labor costs. When it is fully deployed, voice, data, and video services will be moved to the 5G LTE wireless network and operating costs will drop immensely.
All of the above changes, plus new services such as improved home security, will come to pass as reduced wireless cost is realized within all users’ budgets. The greater the usage, the more cost reduction. This new heterogeneous service will cause consolidation to only two providers in the wireless telecommunications arena. Currently, AT&T’s revenue is split about 50-50 between analog/fiber and wireless services. Only the strong will survive this consolidation, and for the survivors, profits will rise. We will not see the reemergence of Ma Bell, but her two strongest offspring will be alive and well. We know them today as AT&T and Verizon. These two former Baby Bells are poised to take advantage of 5G LTE wireless capabilities. Both are making strategic acquisitions to position them to take advantage of this new technology. The most notable recent move in this direction is AT&T’s $48 billion purchase of DIRECTV. The future is now.
James W. Smith,
District Manager - AT&T (Retired)
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