5G's Future: Telecom Giants Shaping Next-Gen Connectivity
July 30, 2024
Note: We reveal investment insights through the quotes of top business leaders.
Key Takeaways
- Telecom giants have made significant strides in 5G deployment, with T-Mobile, Verizon, and AT&T leading the way through extensive network rollouts and technological enhancements.
- Qualcomm and Intel are driving 5G advancements with investments in AI, semiconductor electronics, and innovations in mmWave and sub-6 GHz carrier aggregation.
- Strategic partnerships and collaborations are crucial for expanding 5G coverage and capabilities, with key alliances formed between telecom giants and technology providers.
- The regulatory environment plays a critical role in 5G deployment, with telecom companies emphasizing the need for favorable and stable conditions.
- The competitive landscape in the 5G market is dynamic, with significant coverage advantages, industry growth, and potential impacts from semiconductor industry consolidation.
Current Status of 5G Deployment
Telecom giants have made significant strides in 5G deployment, with T-Mobile completing substantial network rollouts, Verizon integrating mobile edge compute and AI, and AT&T continuing 5G and fiber expansion. Enhanced features like SA and Massive MIMO are expanding capacity and creating new revenue opportunities.
"We expect a reduction in capital expenditures related to these efforts in 2024 compared to 2023 given the substantial deployment of the 5G network completed in the preceding years." --- (TMUS, sec filing, 2024/Q1)
"And as we are deploying our 5G right now, with the mobile edge compute and AI, this is a great long-term opportunity for us using AI." --- (VZ, earning call, 2024/Q1)
"Additionally, our continued 5G and fiber expansion will enable new growth when paired with broader distribution." --- (T, earning call, 2024/Q1)
"We have 2.5. We have 1900 now, and we have 600. And that gives us that big advantage together with the standalone network and the larger deployment in the footprint that we have." --- (TMUS, earning call, 2024/Q1)
"Secondly you asked about all the new features coming into 5G advance with SA, Massive MIMO, all of that is just expanding our capacity and bringing even more opportunities for us for revenue and seeing that we create the customer expectations on the best network in the nation." --- (VZ, earning call, 2024/Q2)
Technological Advancements in 5G
Qualcomm and Intel are driving 5G advancements through significant investments in 5G-based technologies, foundational technologies like AI and semiconductor electronics, and innovations in mmWave and sub-6 GHz carrier aggregation. Qualcomm emphasizes leadership in 5G development and standardization, while Intel focuses on enhancing on-chip laser and SOA performance.
"While we continue to invest significant resources toward advancements primarily in support of 5G-based technologies, we also invest in new and expanded product areas, and industries and applications beyond mobile handsets, by utilizing our existing technical and business expertise and through acquisitions or other strategic transactions." --- (QCOM, sec filing, 2024/Q2)
"Driving the shift are advancements in foundational technologies, including AI, semiconductor electronics, compute power and infrastructure solutions among others." --- (INTC, conference, 2024/06/12)
"Qualcomm’s #5G leadership was on full display at #MWC Shanghai. Learn about the 5G innovations the company shared, including China’s first 5G Advanced #mmWave test platform, new benchmarks, and advancements in mmWave and sub-6 GHz carrier aggregation. https://t.co/YGTfMUUsJR" --- (QCOM, twitter, 2024/07/03)
"Intel continues to make advancements in on-chip laser and SOA performance, cost (greater than 40% die area reduction) and power (greater than 15% reduction)." --- (INTC, press release, 2024/06/26)
"We believe it is important that we remain a leader in 5G technology development, standardization, intellectual property creation and licensing, and a leading developer and supplier of 5G integrated circuit products in order to sustain and grow our business long-term." --- (QCOM, sec filing, 2024/Q2)
Strategic Partnerships and Collaborations
Telecom giants like Verizon, T-Mobile, Qualcomm, and AT&T emphasize the critical role of strategic partnerships in advancing 5G connectivity. Collaborations with cable partners, technology OEMs, and other providers enhance network capabilities, expand coverage, and drive technological innovation, ensuring robust and widespread 5G services.
"Look, the cable partners are very important strategic partners for us. They're a long term customer of ours and a very important customer for us." --- (VZ, conference, 2024/05/14)
"Pomeroy's strategic partnerships with today's leading technology OEMs, comprehensive lifecycle services, and full suite of managed services complement T-Mobile's 5G network, recognized as the nation's largest and fastest, extending its powerful signal to over 98% of the U.S. population, ensuring unparalleled coverage for businesses and their workforce." --- (TMUS, press release, 2024/04/10)
"For 30 years, we have defined and delivered premium mobile experiences. Through this strategic collaboration, we have developed new technology for billions of users around the world." --- (QCOM, conference, 2024/06/03)
"to take on some of that risk, I want to do that. If there's another open access provider out there who wants to build the base infrastructure and get into a collaborative marketing partnership that allows me to bring my wireless service at the top of it, and I can give them back office on how to run or use my brand to accelerate penetration on their network, I wanna sign a deal like that." --- (T, conference, 2024/05/21)
"This is a strategic growth area for Nokia and having a go to market partner like Verizon is pivotal to our success. Verizon Communications Inc. ((NYSE, NASDAQ:VZ) was formed in 2000 and is one of the world's leading providers of technology and communications services." --- (VZ, press release, 2024/05/09)
Regulatory Environment and Policies
Telecom giants like AT&T, Verizon, and T-Mobile emphasize the critical role of regulatory environments in 5G deployment. AT&T and Verizon highlight the need for favorable and stable regulatory conditions, while T-Mobile underscores the importance of regulatory approval for new infrastructure models. Legal appeals and market differences further complicate the landscape.
"COMPETITIVE AND REGULATORY ENVIRONMENT Overview AT&T subsidiaries operating within the United States are subject to federal and state regulatory authorities." --- (T, sec filing, 2024/Q1)
"We think over a period of time for the market that number will probably double a European levels of 50%, 60% convergence because the market structure is fundamentally different and the regulatory environment is very different there." --- (VZ, conference, 2024/05/14)
"That being said, if we can lay track for the long-term in a very capital efficient way, we're open-minded, and we really like this model that we've struck with EQT and Lumos and can't wait to get started and get this approved through the regulatory bodies and begin to see build out accelerate." --- (TMUS, earning call, 2024/Q1)
"This assumes similar build parameters and a regulatory environment that remains attractive to building infrastructure.We are also encouraged by early performance of AT&T Internet Air and our success in proactively migrating customers with legacy copper-based Internet connections onto this fixed wireless service.We now have AT&T Internet Air in parts of 137 markets with nearly 350,000 total consumer subscribers, including 139,000 added during the quarter." --- (T, earning call, 2024/Q2)
"Industry groups have appealed this decision in court. Except as disclosed herein, there have been no material changes to regulatory trends as previously disclosed in Part I, Item 1." --- (VZ, sec filing, 2024/Q2)
Competitive Landscape in the 5G Market
The competitive landscape in the 5G market is marked by significant declines and growth in related sectors (INTC), T-Mobile's extensive coverage advantage (TMUS), ongoing industry growth with competitive moves from cable companies (VZ), changes in promotional strategies (T), and potential impacts from semiconductor industry consolidation (QCOM).
"NEX revenue declined 8% year-over-year. As discussed last quarter, we saw significant declines in the 5G market, partially offset by approximately 10% year-over-year growth in our network and edge markets, which we expect to continue to recover through the year." --- (INTC, earning call, 2024/Q1)
"More than 300 million people nationwide are covered by T-Mobile's super-fast Ultra Capacity 5G with over 2x more square miles of coverage than similar mid-band 5G offerings from the Un-carrier's closest competitors." --- (TMUS, press release, 2024/07/01)
"It seems like it had a drag on business but less of a drag on consumer. And just -- what are you seeing overall in the wireless market growth, it seems like the industry is continuing to grow, there's been some competitive moves by some of the cable companies recently, maybe just comment on the overall environment out there and your ability to sustain this, as well as the low upgrade rates." --- (VZ, earning call, 2024/Q1)
"First, on Mobility, just curious if you could further unpack where the strength in the postpaid phone net adds came from during the quarter, and if you're seeing any changes in the competitive landscape with some of the adjustments to the promotional strategies from some of the cable and M&O competitors?" --- (T, earning call, 2024/Q2)
"Additionally, the semiconductor industry has experienced and may continue to experience consolidation, which could result in significant changes to the competitive landscape." --- (QCOM, sec filing, 2024/Q2)
Future Applications and Use Cases of 5G
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"Commercial deployments of 5G networks and devices have begun and are expected to continue for the foreseeable future." --- (QCOM, sec filing, 2024/Q2)
"Wi-Fi + Cellular models with 5G allow users to access their files, communicate with peers, and back up their data in a snap while on the go." --- (AAPL, press release, 2024/05/07)
"And as you rightly pointed out, it's at the low end of the spectrum. What we outlined in the Q is, since the devices will eventually transition all to 5G, we don't expect any revenue from Huawei product business in '25." --- (QCOM, earning call, 2024/Q2)
"The X80 supports 5G advanced, the next era of 5G, in addition to direct to mobile, 3GPP compliant satellite communications and leading release 18 features." --- (QCOM, earning call, 2024/Q2)
"The impact will be significant. The AI use cases that we now look at them today and we find them very interesting, they will actually become indispensable for both personal and business applications." --- (QCOM, conference, 2024/06/03)
Consumer Adoption and Market Demand
T-Mobile's strategic focus on urban markets and value-driven offerings has led to significant growth in consumer adoption and market demand for 5G. Their efforts to attract customers from competitors and enhance value through postpaid phone categories and other connections have driven durable, differentiated growth across various segments.
"In 2023 across the year, we grew share in the top 100 markets in consumer. And there's a reason for that." --- (TMUS, conference, 2024/05/21)
"Those are elements. They don't pay when you're buying thousands of lines, you're not paying, obviously, consumer rack rate, yet you're driving tremendous value accretion, both through that postpaid phone category, but also those other connections that we spoke about that are increasing the overall value creation." --- (TMUS, conference, 2024/05/14)
"Overall, from consumers in major metros to smaller markets and businesses, from large enterprises to SMBs, T-Mobile's durable, differentiated growth" --- (TMUS, earning call, 2024/Q1)
"And this is because we traditionally during our prior era, we had built an urban business that was focused on the top 100 markets and ran that based on being the best value and being the uncarrier to market leading market shares in most of those markets, the biggest ones." --- (TMUS, conference, 2024/05/21)
"And we think that's a great opportunity both to help customers inside of our wholesale partners to transition, but honestly, customers that also may feel stranded from competitors to come to find a value to continue their wireless services. So I hope that's helpful for the question you're answering." --- (TMUS, earning call, 2024/Q1)