Verizon plan to launch 5G broadband lifts shares

The Verizon logo is seen on the side of a truck in New York City, U.S., October 13, 2016. REUTERS/Brendan McDermid

NEW YORK (Reuters) - Verizon Communications Inc VZ.N shares rose 2 percent in midday trading on Thursday after the No. 1 U.S. wireless carrier said it would launch next-generation high-speed Internet services in three to five U.S. markets in 2018.

The company said on Wednesday it had successfully tested its 5G broadband service in 11 markets this year and that its first commercial launch was planned for Sacramento, California, in the second half of 2018. 5G is expected to offer faster speeds and response times, and higher capacity.

Both Verizon and rival AT&T Inc T.N have been testing faster broadband services, where the last leg of the connection is delivered via a radio signal to a home or business using high-band wireless airwaves known as millimeter wave.

Verizon shares were up 2.1 percent at $50.96.

The service, called fixed wireless, is considered to be the first application of 5G technology and could eventually be a competitor to the high-speed Internet services offered by cable companies. Verizon said it estimates the market opportunity for initial 5G residential broadband services to be about 30 million households nationwide.

Shares of cable companies Charter Communications Inc CHTR.O and Altice USA Inc ATUS.N were down 2.6 percent and 3.7 percent, respectively. Shares of Comcast Corp CMCSA.O, the largest U.S. cable provider, fell 0.3 percent.

Reporting by Anjali Athavaley; Editing by Bernadette Baum