The mobile world has been buzzing about 5G in recent months, with Verizon (NYSE: VZ) saying earlier this year it plans to begin launching commercial services as early as next year. But it's increasingly apparent that U.S. consumers won't have access to truly mobile 5G offerings for at least a few more years.
"The millimeter wave – 28 GHz in particular, the spectrum that certain operators have – is certified by the FCC only for fixed today, so until the FCC comes out with rules for mobile, we can't even use that for mobile," said Krish Prabhu, AT&T's CTO and president of AT&T Labs, during an interview at Cowen and Company's Technology, Media & Telecom Conference Thursday. "But I think you're right – most of what we'll see over the next two, three years is fixed applications."
While 5G standards are a very long way from being finalized, high-band spectrum is expected to be a key component because it provides increased capacity. Because high-band airwaves don't propagate as well, though, operators are actively looking to small cells to densify their networks in advance of 5G.
Verizon reported in February that its early 5G tests topped 10 Gbps and delivered 4K video while moving, adding that it was on track to launch commercially next year. But the carrier was criticized in some circles for hyping the technology – T-Mobile (NYSE:TMUS) executives said its prediction was "BS" – and Verizon CFO Fran Shammo later clarified that an initial pilot starting in 2017 is "really not about mobile, it's really around fixed wireless."
Previous wireless network generations have primarily referred to mobile use, of course, and it's unclear whether fixed-line services will be branded as 5G. But Prabhu said AT&T (NYSE: T) will begin tests later this year that will include a mobile component.
"This is a 5G millimeter wave trial, so we are going to start with 15 GHz in the summer here in a few months then go to 28 GHz at the end of the year," he explained. "It will largely be a fixed wireless service with some limited mobility."
Meanwhile, AT&T – like all of its competitors – is shifting its focus from traditional towers to small cells to boost capacity and fill gaps in its network. Prabhu said the carrier's macrosite network is roughly 90 percent of the size it will be in five years, while its small-cell buildout is only 5 to 10 percent of where he expects it to be by then.
"As we go to enhance mobile with more bandwidth to the device, the small cells really (become) a key to the new architecture," he said. "We are looking at it pretty aggressively. It depends on which markets and whether the small cells make sense (in those markets)."
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