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Sizing up Verizon’s 5G Strategy

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Verizon on 5G

Verizon Communications (VZ) has been concentrating on its 5G (fifth-generation) technology, and this has been generating some buzz in the telecommunications and media industry. Industry observers expect 5G services to enhance wireless data speeds significantly.

Unlike 4G (fourth-generation) technology, 5G doesn’t need towers but uses small-cell networks that can be mounted on utility poles, street lights, and other locations on the public property.

During the UBS Global Media and Communications Conference held on December 5, 2017, Matthew Ellis, Verizon’s CFO (chief financial officer), spoke about Verizon’s 5G strategy, stating that the company expects to launch 5G initiatives in three to five cities in the second half of 2018.

Verizon sees 5G fixed wireless as the first-use case for the 5G network, with IoT (Internet of Things) and mobility applications developing in time.

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AT&T and 5G

In the 5G space, Verizon is competing with AT&T (T) and T-Mobile (TMUS). In the past, AT&T attempted to outbid its competitors to gain a spectrum advantage. Earlier in 2015, AT&T made the highest bid to procure spectrum, bidding $18.2 billion during the AWS-3 spectrum auction conducted by the FCC (US Federal Communications Commission).

By comparison, T-Mobile acquired spectrum amounting to $1.8 billion at the same auction, while Verizon acquired spectrum totaling $10.4 billion, as you can see in the above graph.

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