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Wireless Companies Put Their Big 5G Gambles on Display at CES

Scott Moritz
Wireless Companies Put Their Big 5G Gambles on Display at CES

(Bloomberg) -- Fifth-generation wireless technology may one day handle sci-fi tasks like guiding driverless cars, but today’s consumers are more concerned with making their phones work faster -- and that’s not lost on mobile carriers headed to CES in Las Vegas.

In coming weeks, AT&T Inc. will introduce an interim “5G E” service that promises 50 percent faster internet speeds in many places. Verizon Communications Inc. was out first in September with a 5G home service, pitching ultra-high-definition TV and speeds up to 20 times faster.

Whether it’s the more-distant future or improvements just around the corner, CES is the place for carriers to connect with investors and members of the media who’ll carry their message to consumers. Verizon and AT&T have bet their futures on the next generation of wireless technology and are eager to show what it might look like.

Full-fledged 5G networks are still more than a year away, but selling investors on the idea, and touting eye-popping speeds to jockey for the lead in consumers’ minds is every bit the game -- even if it means slapping that label on technology that isn’t really fifth generation.

AT&T is on a multistep path to 5G. Starting this spring, it will rebrand recent models of 4G Android phones as 5G Evolution or “5G E,” a transitional step intended to reflect speed and capacity upgrades to the carrier’s current network.

Noticeably Faster?

And if it’s noticeably faster, mobile customers might not split hairs about 5G definitions, BTIG LLC analyst Walt Piecyk said in a note Monday.

“The broad availability of ‘real 5G’ could be years away, providing AT&T with a window of opportunity to surpass Verizon’s historical dominance as the wireless network leader in the U.S.,” he said.

Verizon Chief Executive Officer Hans Vestberg is hosting his company’s CES demonstration Tuesday and will attempt to show, through several examples, how 5G is entirely different from current technology. He’s expect to demonstrate how the new technology can virtually eliminate latency -- those annoying delays when you’re trying to connect -- enabling services that aren’t possible now.

Beyond speed, Verizon will try to show how 5G networks can support 200 times more connections than 4G -- or more -- within the same service area.

On Wednesday, AT&T plans to reveal deals to help cities automate some services and embed more communications technology in cars -- steps that are consistent with its slower run-up to genuine 5G technology. Late Monday, the company said it will work with Toyota Motor Corp. and telecom provider KDDI Corp. to provide customers with services like Wi-Fi hot spots, remote starting and remote diagnostics on its existing network.

5G Arms Race

In addition to serving as a theme for this year’s tech show, 5G shoulders some other heavy burdens, including in the area of national security.

China, for example, has made leading transition to 5G a priority and that’s set off warning bells among U.S. executives and the military. Charlie Ergen, co-founder and chairman of Dish Network Corp., has accumulated billions of dollars in unused bandwidth and likens his development of a network to the Manhattan Project -- the U.S. race to be first with a nuclear weapon.

Last week, a retired U.S. general said China’s desire to dominate new wireless technology poses a global threat that should be thwarted by a new, secure network.

China will gain a capability for mayhem and mass surveillance if it dominates advanced 5G networks that link billions of devices, retired Air Force Brigadier General Robert Spalding said in a memo that was obtained by Bloomberg News.

“The more connected we are, and 5G will make us the most connected by far, the more vulnerable we become,” said Spalding, who left the National Security Council last year.

Beyond the military implications, the build-out of 5G could also unleash some $200 billion in estimated spending on product development and networks. And for carriers including Sprint Corp. and T-Mobile US Inc., which are awaiting approval of $26.5 billion merger, 5G can open the door to sales of advanced services like nationwide broadband and TV.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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