Telecommunications giant AT&T announced the launch of a 5G network in 10 of its markets on Friday, claiming data speeds faster than 4G LTE provides.
But hang on a second.
Things are not as they seem.
While people in Los Angeles, Milwaukee, Pittsburgh, San Diego, San Francisco, San Jose, California, Birmingham, Alabama, Providence, Rhode Island, and Rochester, New York, may be able to experience blazing fast data spends — though, we don’t know that for fact — there’s a little fine print here.
The actual 5G network AT&T Inc. (NYSE: T) is only slightly faster than what us regular folks are used to with our 4G speeds. It’s what AT&T calls a “low-band” network.
It’s not that blazing fast 5G network we are all salivating over and cellphone companies are waiting to profit from.
And AT&T isn’t the only cell company that’s pulled this bait and switch.
Earlier this month, T-Mobile U.S. (Nasdaq: TMUS) launched its low-band 5G network to 200 million people around the country.
Remember, if you don’t have to change your phone to adapt to the new technology, it’s not the 5G you are looking for.
Now, AT&T was slick about its announcement Friday because it paired it with the announcement of the Galaxy Note 10+ 5G, which really only supports the low-band network and not the future high-band 5G we all want to experience.
So the marketing gurus at AT&T and Samsung likely figured it would package the announcements together in hopes enough gullible people would think they were getting something brand new and shiny.
That’s just not the case.
In addition to not needing a new phone for these new networks, the other thing about 5G is how it is built.
Instead of the large towers we use today, companies like Crown Castle International Corp. (NYSE: CCI) and American Tower Corp. (NYSE: AMT) — U.S. cell tower operators — will start blowing up in share price because companies like AT&T and T-Mobile will need more tower space to accommodate new 5G technology.
Now, both CCI and AMT have seen strong growth this year, but it should pale in comparison to the boon their share price will see when 5G technology starts to be implemented in mass quantities.
5G bands don’t travel as far as 4G, so cell companies will need a lot more space to get 5G off the ground.
That is the big indicator of when 5G technology will truly be consumable for you and me.
In the meantime, what you are hearing now is just telecom companies hyping you up to get you to spend more money before the big 5G launch happens — likely sometime in 2020.
Just be cautious, and don’t feel the need to spend hundreds of dollars now, when you’ll only have to do it again later.