In telecom news, the development of 5G wireless technology and standards is front and center at this year's Mobile World Congress in Barcelona, even though substantial rollouts of the next generation of wireless technology won't reach consumers until well into the next decade. Carriers and equipment manufacturers are battling to see who can best offer far faster services at wireless broadband speeds, but the results are years away.
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Outside of 5G (if there is anything other than 5G wireless this week), Verizon is picking up XO Communications' IP and Ethernet fiber networks, and AT&T is investing more in fiber networks in Mexico. And oh, AT&T rolled out a new landline phone texting service in an effort to make everything old new again.
5G wireless research, testing and hype in full swing
The race is on to set 5G standards for fifth-generation wireless technology, where it is a major topic at Mobile World Congress in Barcelona, where telecom equipment manufacturers including Samsung, Ericsson and Nokia are featuring 5G demonstrations. Many carriers and equipment providers also have been collaborating in university settings to be able to offer 5G wireless Internet speeds more than 100 times faster than anything available now.
Large tech companies are spending billions on 5G technology research in hopes of winning contracts with global operators to upgrade their 3G and 4G mobile Internet infrastructure. Because the competition to win the day is so intense, only increased by the potential of a global economic downturn, widespread 5G wireless rollouts aren't expected until well into the next decade.
The ability to influence 5G standards is one of the biggest reasons carriers are rushing to promote and publicize their 5G tests. Carriers that have made the most progress in 5G are also likely to have the most input into the eventual 5G standard. Vendors are testing their own 5G technology with a wide variety of operators. Both Verizon Wireless and AT&T are currently testing 5G wireless technology in Texas.
The standard to deliver 5G won't be completed before 2019, however, and companies worldwide will need to agree how their networks will talk to each other to provide high-quality connections and over what radio waves and types of equipment.
Both carriers and equipment makers are looking for new ways to make money, according to Forrester Research analyst Thomas Husson. He noted that 5G wireless will have no impact for consumers in the next five years. "This is for now a standards battle. The history of 3G and 4G networks tells us it will take years before we reach any critical mass after commercial launches at the end of this decade. End of story."
Verizon buys XO fiber networks for $1.8 billion
Verizon plans to buy XO Communications' fiber optic network for $1.8 billion in a deal expected to close in the first half of 2017, after the provider gets approval from regulatory bodies. Verizon said it is buying the fiber optic network in order to make its cell network denser and expand services to enterprise and wholesale customers. Verizon plans to lease XO's wireless spectrum with an option to buy it by the end of 2018.
The deal includes XO's fiber-based IP and Ethernet networks. Verizon said it expects $1.5 billion in operational synergies from the purchase.
XO chairman and sole shareholder Carl Icahn commented that the sale doesn't represent a good return on his investment, but added that in today's environment, it represents the best achievable outcome for the company. Icahn began buying XO's senior debt in 2001, before XO declared bankruptcy in 2002. Icahn helped bring the company out of bankruptcy in 2008 and said he had to inject more capital several times to keep XO afloat.
AT&T launches landline texting
Giving landline phones some mobile phone pizazz, AT&T says it is the first carrier to offer businesses a landline texting service that enables them to send and receive text or multimedia messages via their landline phones. The service allows companies to use web, mobile or desktop apps to text their customers from business phone lines. The business case for the service is focused on call centers or any other business that wants to cut down on playing phone tag with customers and respond to their questions more efficiently, AT&T said in a blog post.
To use the service, companies need to register their landline phone numbers or existing toll-free numbers with AT&T. The service works by enabling a business to use a web browser or application on a mobile device to send or receive text messages linked to a landline number. AT&T's landline texting service information suggests that enterprises and organizations check with their legal and regulatory teams when creating a text message program to consider opt-in and other legal requirements.
Continuing this week's focus on the benefits of fiber, AT&T also plans to invest $10 billion this year (45% of its planned capital expenses) in communication services for business customers. A large portion of its investment will go to fiber integration in Mexico, where AT&T recently purchased two wireless carriers. AT&T said it plans to integrate more than 6,000 kilometers of fiber supporting its wireless operations in Mexico. The company invested $3 billion in the country in 2015.
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