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Mobile 5G hype vs. reality in 2019

Hype will likely drown out the progress the mobile 5G industry is expected to make this year in preparing for augmented reality applications and other unique services in 2020.

Companies should expect 5G hype to dominate most of 2019 as carriers test the delivery of high-speed mobile services in a limited number of markets and as manufacturers launch supporting devices. Nevertheless, analysts expect real progress under the bluster and predict significant services will hit the market in 2020.

Sparking the hype that welcomed the new year were rollouts of 5G services by AT&T and Verizon. The former has turned on its fifth-generation wireless service in 12 U.S. cities and plans to add nine more this year. Verizon, on the other hand, has introduced a 5G broadband service for the home in parts of four U.S. cities with plans to launch a mobile 5G service in 2019. The carrier hasn't said where.

The second wave of intense marketing is likely to happen next week as manufacturers showcase 5G-enabled devices at the Consumer Electronics Show in Las Vegas. Gadget makers will pitch their new wares again in February at the Mobile World Congress in Barcelona. Companies expected to launch products this year include Samsung, Huawei and Xiaomi.

Despite the hoopla, analysts do not expect businesses or consumers to buy many of the services or devices this year. That's because carriers and manufacturers are unlikely to offer much more than what customers get today on their smartphones with the current 4G Long Term Evolution (LTE) service.

"I don't think anyone is looking at any major uplift in 5G revenue before 2020," said Rajesh Ghai, an analyst at IDC.

AT&T criticized for 5G branding

In the meantime, carriers will suffer 5G growing pains. AT&T, for example, recently sparked criticism by branding its enhanced 4G service 5G Evolution and showing a 5G E icon on some Android phones.

I don't think anyone is looking at any major uplift in 5G revenue before 2020.
Rajesh Ghaianalyst, IDC

Technically, the more powerful 4G service does use some 5G technology. Nevertheless, the branding is likely to lead to confusion between 5G E and AT&T's all-5G service, which complies with industry standards, such as the New Radio (NR) specification for devices.

"I think the 5G E naming will confuse customers into thinking the service is 5G NR-compliant, which it isn't," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, based in Austin, Texas.

Also, initial reports on AT&T's mobile 5G service haven't been good. People claiming to have tried the service in some of the select cities said on the Reddit discussion website that the service wasn't significantly faster than 4G LTE.

Despite the reports, analysts were confident AT&T would work out performance problems as the year progressed. Moorhead predicted the service would get substantially faster once the carrier adopts the third-generation 5G specifications in March and adds more spectrum.

Roger Entner, lead analyst at Recon Analytics, based in Dedham, Mass., described AT&T's troubles as "teething problems" of new technology.

"The same way we don't judge the job prospects of an adult based on teething problems as a toddler, we should also not jump to conclusions here," he said.

What's coming

Moorhead expects AT&T to deliver "big-time speeds and low latency in many cities, by the end of the third quarter." Proponents of 5G claim it will eventually offer speeds as high as 20 Gbps.

5G's ultra-low latency is as important as the higher bandwidth because it promises to deliver near-instantaneous communication between the carriers' data centers and mobile devices. Analysts expect the faster communication time to support fleets of autonomous vehicles, better security cameras and augmented reality (AR).

Services unique to 5G are essential if carriers expect businesses and consumers to pay more for the service, analysts said. A faster network alone won't be enough.

"People do not typically pay more for just a new generation [wireless service]," said Entner, who expects to see 5G-enabled AR products for business next year. "They have never done so, and I don't think they will do it this time."

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