AT&T (NYSE:T) appears to be changing its tune when it comes to 5G technology, which is expected to have lower latency (the time it takes to respond to a request) and faster connection speeds than 4G LTE. The about-face comes just a few months after the carrier wanted to avoid any definitive talk about the next wave of wireless communication.
"We're not at a point to be making promises or commitments to customers as to what 5G is," said chief executive of AT&T Mobility Glenn Lurie in September. "Let's make sure that before we start hyping what it's going to be, that those standards are agreed to."
But AT&T now appears to be altering course, as Verizon Communications (NYSE:VZ) and Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google aggressively pursue the new technology. According to information surfaced last week by wireless consulting engineer Steve Crowley (republished on FierceWireless), AT&T has filed an application with the Federal Communications Commission to test 5G technologies in Austin, Texas. A redacted public FCC application said AT&T will experiment over the next three years with various wireless spectrums for voice, video, and data signals for 5G innovation.
Keeping up with the Joneses
Verizon began 5G tests at its New Jersey headquarters at the end of 2015, and will start testing the technology in a few major U.S. cities later this year. The carrier is still at the beginning of its 5G tests, but already says that it wants to start a slow commercial rollout sometime in 2017.
"As we said, we will be at the forefront and we are currently at the forefront globally talking about standards," noted Verizon's executive VP and CFO Fran Shammo on the company's fourth quarter earnings call. "We will be the first company to roll 5G out in the United States and we are currently preparing for those field trials."
Verizon has built a strong 4G LTE network, but its competitors are catching up. The latest OpenSignal data shows that T-Mobile has almost closed the LTE coverage gap, and its download speeds are faster than Verizon's. Verizon has long enjoyed network dominance because it was the first to deploy 4G LTE in the U.S., and doing the same with 5G could propel the carrier ahead once again.
AT&T and Verizon are keen on developing a strong 5G position not just to keep up with each other, but also to keep Google at bay. The Guardian recently reported that the tech giant is testing drones that can beam millimeter-wave radio transmissions down to cellular users for 5G connections.
Google's drones could potentially fly for up to five years without coming down, powered by solar panels, and could let the company provide connectivity without building out expensive cell towers. Google's 5G interests are still unclear, but it could be looking to challenge wireless carriers to innovate faster and reduce connectivity prices in the same way it challenges cable Internet providers with Google Fiber.
AT&T probably won't fall behind
While the carrier may be bumping up its timeline faster than it previously wanted, it's clear AT&T is now moving in the right direction. Verizon started its first 5G tests two months ago and AT&T will likely begin its tests in a few months. As the nation's top two carriers are getting started with 5G, it's likely AT&T will be able to keep pace (or close to it) with Verizon.
Tech and telecom investors are likely to hear a lot more about 5G standards and testing over the next two years. Considering that the crux of the wireless business is in delivering the best and fastest connections, other carriers won't be able keep to keep away from doing their own 5G testing now that Verizon, AT&T, and Google have vowed to pursue it.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.