BARCELONA Commitments AT&T Inc made to build out fixed high-speed Internet services to gain regulatory approval for its $48.5 billion purchase of DIRECTV will give it the edge over U.S. rival Verizon Communications Inc in the roll-out of the next generation of cellular technology, AT&T's strategy chief said on Monday.
So-called 5G wireless networks are expected to offer 1,000-fold gains in capacity over existing networks, giving the potential to connect at least 100 billion devices with download speeds that can reach 10 gigabits per second (Gb/s).
AT&T completed its acquisition of DIRECTV last July. As part of the deal, regulators required AT&T to commit to building out high-speed Internet to more than 12 million customer locations and expanding broadband access in rural areas.
AT&T bet on DIRECTV's satellite TV business aiming to beef up its bundles of cellular, broadband, TV and fixed-line phone services.
AT&T has said it will begin testing 5G technology in labs before fixed 5G trials at residences and businesses. As opposed to wireless mobile service, "fixed" refers to wireless services delivered to fixed locations and devices in homes and offices.
Its 5G trials could help AT&T fulfil its commitment to bring broadband to more U.S. locations.
"That early use case in fixed is actually very interesting" because of AT&T's DIRECTV merger commitments, AT&T Chief Strategy Officer John Donovan said in an interview at Mobile World Congress in Barcelona. "We are in a better position because we have a fixed line proposition, which is becoming much more interesting now with 5G."
Verizon spokesman Jim Gerace said: "AT&T has followed us in every turn of technology - wireless and wired - and they will again with 5G."
The global telecom industry will release official standards for 5G in 2018 but some players have begun planning test runs.
AT&T said this month it planned to have trials of 5G technology by the end of this year, while Verizon said late last year it would kick off trials in 2016.
Donovan also said AT&T would continue to oppose a proposal approved by the U.S. Federal Communications Commission to let consumers swap pricey cable boxes for cheaper devices and apps.
The FCC has opened up a discussion on the plan for the coming months.
"We will continue to be very vocal in our opposition," Donovan said, adding AT&T would plead for a software-oriented solution.
(Additional reporting by Malathi Nayak in New York; Editing by David Evans and Matthew Lewis)