Verizon Communications Inc. (VZ - Free Report) , the largest national telecom operator in the U.S., is emphasizing on its upcoming 5G fixed wireless network to counter rising competition in the domestic wireless market.
Competition in the U.S. wireless market is likely to intensify in 2017, with the advent of two MVNOs (mobile virtual network operator). Two leading U.S. cable MSOs (multi service operators), namely, Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) have declared that they will utilize their respective MVNO agreements with Verizon to enter into wireless arena. The cable TV operators will use their existing WiFi networks together with Verizon’s wireless set up, to offer mobile services.
Although several industry researchers have predicted that a full-fledged 5G network deployment will not commence until 2020, Verizon anticipates some level of commercial deployment in 2017. All other domestic national telecom carriers like AT&T Inc. (T - Free Report) , Sprint Corp. (S - Free Report) and T-Mobile US Inc. (TMUS - Free Report) are currently looking to deploy 5G networks in 2020.
Verizon claims that its 5G network will provide a download speed of 1 Gbps (gigabit per second) resulting in 200 times the throughput of the currently available standard 4G LTE network. The latency period of data delivery will be in single milliseconds. Additionally, 5G technology is designed to be more power efficient than any other standard wireless networks available at the moment. Therefore, 5G-enabled mobile devices are likely to last much longer than their 3G or 4G counterparts.
Notably, in Feb 2016, Verizon entered into a definitive agreement to acquire XO Communications Inc.’s dark-fiber optic network. As a part of this $1.8 billion deal, Verizon will also lease XO’s LMDS (Local Multipoint Distribution Service) wireless spectrum with an option to buy them by the end of 2018. XO has a portfolio of 102 LMDS licenses in 28 GHz and 39 GHz bands.
The U.S. telecom regulator, FCC (Federal Communications Commission) has approved the airwaves for fixed wireless use. Verizon is expecting to get the FCC’s green signal eventually to use them for mobile services. Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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