5 things to know today: Verizon’s XO buy and 5G tests, AT&T’s LTE drones and $10 billion investment
1. Verizon Communications has agreed to pay $1.8 billion for XO Communications’ fiber-optic network business. In addition, Verizon will lease available wireless spectrum from XO, and has an option to buy the entity that holds XO’s spectrum by the end of 2018. Verizon’s purchase of XO’s fiber-optic network business is not expected to close until the second half of next year.
The fiber purchase is expected to cut both operating expenses and capital expenditures, Verizon said today. The carrier said the net present value of the operational synergies is expected to be more than $1.5 billion. Verizon said XO’s fiber-based IP and Ethernet networks will help it better serve enterprise and wholesale customers.
2. Fiber and enterprise customers are on AT&T’s mind as well. The carrier said it will invest $10 billion this year, or 45% of its planned 2016 capital expenditures, in communications services for business customers. A large portion of the investment is targeted at fiber integration in Mexico, where AT&T recently purchased wireless carriers Iusacell and Nextel Mexico. AT&T said it plans to integrate more than 6,000 kilometers of fiber currently supporting its wireless operations in Mexico, and to add hundreds of sales professionals. AT&T’s investment in Mexico comes on top of a $3 billion investment announced last year.
3. AT&T and Intel are planning to connect drones to AT&T Mobility’s LTE network. The companies are testing the performance of the LTE network at high altitudes, with the goal of finding out how altitude impacts video streaming and telematics.
“AT&T and Intel will be testing how the network can enable the most exciting business use cases for drones,” said Chris Penrose, SVP for IoT Solutions at AT&T. “Our LTE network is uniquely positioned to connect industries like delivery, agriculture, construction and insurance.”
4. Verizon Wireless has been testing “5G” in AT&T’s backyard, conducting field trials with Nokia in the Dallas area. The carrier’s pre-commercial 5G trial replaced wired broadband with wireless, and used a number of different building materials to test outdoor-to-indoor penetration. According to Nokia, the tests show 5G is an alternative to fiber to the home and could speed up deployments of broadband services.
Verizon said it has also been testing 5G technology with Ericsson, and the two companies have “real-world results” that “demonstrate commercial viability of new millimeter wave bands proposed for 5G.” Ericsson says it already has 5G radio prototypes achieving peak throughput rates of 10 gigabits per second.
“The commitment we’ve made is to be first in the world with this type of technology in the customers’ hands,” said Adam Koeppe, VP of technology planning for Verizon. The company is collaborating with a number of partners and forming a group it calls its 5G Technology Forum. Verizon’s partners include Apple, Cisco Systems, Ericsson, Intel, LG, Nokia, Samsung and Qualcomm. Verizon said the group is working to collectively drive technical standards for 5G.
The ability to influence 5G standards is one of the biggest reasons carriers are rushing to promote and publicize their 5G tests. Carriers that have made the most progress are likely to have the most input into the eventual 5G standard.
5. Nokia says it’s the first equipment maker to run 5G on a commercially-available base station. The company says its AirScale radio equipment supports 5G technologies and will be demonstrating the technology at Mobile World Congress in Barcelona, Spain.
According to Nokia, 5G can be introduced on top of LTE, and the company said operators can test 5G use cases in their networks using all spectrum bands, including sub-6 GHz for wide area coverage. Nokia said one of the use cases it will be demonstrating this week is interactive virtual reality.
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