February 29, 2016

What does 5G technology mean for the industry as a whole?

A 5G network would mean immensely faster downloading speeds.

While 4G, also known as fourth generation technology, is the norm today, the future generation of mobile networks, 5G, is expected to be the mainstream in the coming years. Though most industry experts expect the technology to not be widely used until 2020, Nokia CEO Rajeev Suri stated that the general public does not want to wait this long and that his company will begin deploying the technology slowly by as early as next year, according to PC World.

The advent of 5G technology would drastically alter the way people use and view technology. Christina Zander at Market Watch reported that it would "enable business and residential customers to achieve significantly faster networking speeds, lower latency, and the ability to handle exponentially more Internet-connected devices." Though still more of a concept than a technology, 5G will offer lower latency (from 50 milliseconds to one) extremely fast data speeds (from one gigabit to 10) and better connectivity across the world.

What does the race for 5G technology mean for industry leaders?
What is even more interesting, however, is how 5G technology is bringing companies together in an effort to be the first to master this unique technology. Industry giants are announcing partnerships to pool their resources to develop this technology sooner rather than later. Many analysts wonder if these partnerships are the first steps on the road to massive industry mergers and acquisitions.

"Nokia recently acquired Alcatel-Lucent to be able to provide a more complete 5G upgrade offering to its existing customers," Jack Gold wrote at Computer World. "Nokia is a major provider of carrier infrastructure, with heavy emphasis on the RAN (radio area network). Alcatel-Lucent also competes at the RAN level, but has a strong presence in back-end, IP-based backhaul infrastructure."

Meanwhile, Ericsson, the Swedish network gear vendor, and Cisco Systems, the U.S. technology company, recently partnered to create and test the tech industry's first 5G router. Included in this partnership is fellow Swedish network equipment provider, Intel Corporation. The partnership between Ericsson and Cisco, though beneficial, has many industry analysts wondering if this initial agreement may be indicative of a future acquisition or merger.

"Both are viable stand-alone entities," Gold explained. "But a combined company not only would be a powerhouse in corporate systems, but also would create a primary implementer of all things networking for public and private entities. This initial partnership could be a trial relationship that could end up as something more longer-term."

Verizon recently created its 5G Technology Forum, composed of companies across a variety of industries, including Apple, Cisco, Ericsson, Intel, LG, Nokia, Samsung, and Qualcomm, to work to create the foundational standards of the 5G industry.

When is 5G technology expected to roll out?
Though many experts claim 2020 to be the official adoption point for 5G, Nokia, among other companies say otherwise. Telecommunication giant AT&T, for example, recently announced that it expects to begin testing on its 5G network by the end of this year. Similarly, AT&T will partner with Ericsson and Intel to perfect its network during the testing phases.

"New experiences like virtual reality, self-driving cars, robotics, smart cities and more are about to test networks like never before," John Donovan, AT&T's chief strategy officer, said in a company statement. "5G will help make them a reality."

Like the innovation accessed through 5G technology, a carefully executed merger or acquisition offers new business opportunities and improved market reach for any company. If your organization is seeking to pursue a merger or acquisition, consult an M&A professional today. With unmatched assistance, your company can close a deal that exceeds its projected growth goals. Contact us to see how your company can benefit from a partnership with our skilled team of experts.