Why America's 5G infrastructure needs an upgrade, badly
Over 75,000 Americans reported outages Thursday from their cell phone providers like AT&T (T), resulting in loss of cellular and internet service for almost 12 hours. AT&T addressed the concerns and claimed to have restored service to its customers. The company did not, however, address what caused the outage.
Hugh Odom, Vertical Consultants Founder and President, joins Yahoo Finance to discuss the recent outage from telecommunications companies and what could be behind the incident.
Odom suggests part of the reason behind these outages could be the recent rollout of 5G coverage from providers and their troubling lack of infrastructure:
"We have a lack of cell sites [in] the United States to accommodate 5G. That's just the simple fact of it. We are lagging behind the rest of the world. Unless we build out more cell towers and upgrade the ones that are out there, we're going to see this continual issue both in urban and more particularly in rural areas where you have the spread of coverage. And the big issue there is AT&T recently said they're going to get rid of landlines and most of rural America depends on those landlines for emergency services, and without wireless service what do you turn to?"
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
JOSH LIPTON: Some good news for AT&T customers. The telecom giant saying last hour it restored an outage that started overnight. 75,000 people reporting problems. Customers across the country were unable to make calls, text, or access the internet without Wi-Fi for roughly 12 hours. The company is not saying what caused the outage, but news of the resolution not doing much for the stock. It's edging lower on the day.
Joining us now is Hugh Odom, Vertical Consultants founder and president Hugh, it is good to have you on the show. And maybe, Hugh, just I want to just start getting your general take on this event here, Hugh, because this outage, listen, it was widespread. It was national. As we noted there, a lot of people impacted. What's your response, Hugh?
HUGH ODOM: Well, as you mentioned, it's been a crazy morning for AT&T and the other carriers, because usually when you have an outage it's localized or even regionalized. But when you have a widespread outage, that's a big issue because you're seeing something that gets outside of the control of AT&T. When it gets outside of the control of AT&T, you start looking at situations by which somebody outside of AT&T has got into their system.
And right now, the wireless networks, the infrastructure, the cell towers, et cetera are spread too thin with the rollout of 5G. So it exposes this situation even further. And I think this is one of the situations we're going to encounter with this continued rollout of 5G and the underlying infrastructure not meeting up to that demand.
JULIE HYMAN: So, Hugh, it's Julie here. So what needs to happen then to prevent this from happening? Is it just-- or is it just growing pains and it's going to happen as 5G gets rolled out? Is there anything that can be done to prevent it?
HUGH ODOM: Well, I think two things. I think, one, we have to understand that with 5G, you're going to spread the network and you're going to see some exposure. So you need to really look and see how you can at least know where those exposures are and address them if they do come to fruition of having an issue with them.
Second, as I mentioned, we have a lack of cell sites out of the United States to accommodate 5G. That's just a simple fact of it. We are lagging behind the rest of the world. Unless we build out more cell towers and upgrade the ones that are out there, we're going to see this continual issue both in urban and more particularly in rural areas where you have that spread of coverage.
And the big issue there is AT&T recently said they're going to get away-- or get rid of, sorry, landlines. And most of rural America depends on those landlines for emergency services. And without wireless service, what do you turn to?
JOSH LIPTON: Would you expect, Hugh, the number and severity of outages like this then to actually kind of ramp in the quarters, the years ahead?
HUGH ODOM: I think you're going to see more and more issues because you're seeing more and more traffic on the road, let's say. Equate this to driving down the road and you get more cars on the road and you don't have wider lanes. And when you got more data coming across those ethernet services or, sorry, wireless services and networks, you're going to see more and more issues pop up. That exposure gets greater, the traffic gets greater, the overload becomes more a problem. And that just turns into bigger issues like we're seeing today, a nationwide outage. This doesn't really happen that often.
JOSH LIPTON: What do you make of, Hugh, how AT&T sort of handled this whole situation in terms of their reaction, their response, their messaging?
HUGH ODOM: I don't think they have had a message. I don't think they've had a response. I think their response is we're sorry for the outage, but we're not going to tell you what the reasoning was behind the outage. I think that's the Department of Homeland Security is investigating this. AT&T is apologized. But no one of the tens of thousands, if not more, of people who've been impacted have got an answer of what happened.
And that is an issue because we rely upon communications. It's our fourth utility. And when you shut that down, you can't communicate with people. But also, as I mentioned before, you have an emergency response system that becomes paralyzed because of it.
JULIE HYMAN: Not to make light of it, but it's nice to have a break from the phone once in a while, even if it's involuntary. But, Hugh, no, seriously though, I know it is very important in a lot of situations. Should they be-- will we see customers leave AT&T? I mean, this is just a one-off, but should they be concerned about that?
HUGH ODOM: I think AT&T and Verizon especially are so far behind T-Mobile, that's my personal opinion, that any bad news is worse news for AT&T. I think they're trying to catch up. And with this situation, sometimes they say any news is good news when you're out there. This isn't good news, because this says not only do they have an issue with service, its exposure. And that becomes an issue for security situations when you're using your wireless devices, your phone, et cetera. So I don't think it's a good day for AT&T.
JULIE HYMAN: And it seems as though shareholders feel the same. Hugh, thank you so much. Appreciate it.
HUGH ODOM: Thank you.
