5G technology, despite some fairly breathless hype, is still in the embryonic stages of development, but the pace is quickening. The major U.S. carriers are racing to buy up critical spectrum that will be necessary for the realization of 5G’s potential, which could include support for speeds up to 1Gbps and support for the ever-expanding Internet of Things.
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AT&T has made two major purchases with that end in mind – January saw the company announce the acquisition, for an undisclosed sum, of bankrupt wireless backhaul provider FiberTower, and just this week AT&T said that it would spend about $1.6 billion in an all-stock deal to acquire Straight Path Communications (Note: A Reuters report overnight cited sources as saying Verizon might try to top AT&T’s bid).
What both of those companies have in common is their extensive spectrum license holdings, particularly in the lower end of the millimeter-wave range between about 30GHz and 40GHz. Those frequencies are valuable for the high-frequency, high-density component of 5G technology, which will provide a large amount of bandwidth for areas of particularly stiff demand, both in terms of throughput and client density.
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The high frequency part of 5G isn’t all there is to the technology, of course – like current-gen wireless networks, 5G will use lower frequencies with better propagation for wide-area coverage, and LTE technology is unlikely to be totally supplanted by 5G – but it’s the millimeter wave bands that have carriers excited over the possibilities, and scrambling for frequency licenses.
Nor is AT&T the only one looking to shore up its holdings in this area. While Verizon’s February purchase of XO Communications was partially aimed at improving the company’s fiber networks, Verizon also acquired the rights to valuable wireless spectrum from an XO subsidiary, NextLink Wireless.
Another major holder of 5G-relevant spectrum in the U.S. isn’t a mobile carrier at all – Dish Network has extensive holdings in this area, and has been public about its plans to play in the 5G space. While the company had as recently as last year been noncommittal with its predictions, CEO Charles Ergen was bullish in a February earnings call.
“There’s going to be a really a fundamental shift in wireless technology with 5G,” he said. “It makes logical sense for us to build a network not like the current incumbents have but with utilizing the new technology. So in other words, we can build a network that’s completely an IP network, take advantage of all the 5G technologies.”
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Dish also bolstered its wireless capacity holdings this week through the $19.8 billion FCC auction for spectrum in the 600MHz range. Dish snagged $6.2 billion worth, while T-Mobile was the big winner with $8 billion in winning bids. This low-band spectrum could be used to build out 5G networks, which really aren’t expected to flourish until 2020.
T-Mobile, for its part, also holds 28GHz and 39GHz licenses that it acquired through the purchase of MetroPCS in 2012, according to a report from FierceWireless. While Sprint appears to be the lone member of the big four that isn’t yet heavily invested in millimeter wave spectrum – the company’s CEO said that Sprint views its extensive 2.5GHz holdings as “foundational” to its 5G technology, per RCRWireless, although the company did highlight 28GHz and 80GHz spectrum in a summer announcement.
This article originally appeared on the IDG Network by Jon Gold.
