Start thinking about 5G wireless

@CNNMoneyTech March 8, 2012: 5:41 AM ET
5G technology is going to bring a wireless Internet of 'things,' rather than just phones and tablets.

5G technology is going to bring a wireless Internet of 'things,' rather than just phones and tablets.

BARCELONA, Spain (CNNMoney) -- Just as consumers are wrapping their heads around 4G, the wireless industry is thinking ahead to 5G.

Soaring smartphone and tablet sales mean networks are growing clogged with cellular data traffic. For the time being, 4G technology can help relieve the congestion. Modern networks are able to cram more data into their airwaves than older technologies can.

But soon, even 4G's efficiencies won't be enough.

By 2020, industry analysts say the amount of cellular traffic created by smartphones and tablets will be dwarfed by the data generated from the world of connected "things." Shoes, watches, appliances, cars, thermostats and door locks will all be on the network.

That's a big problem for wireless carriers, which are hitting a point of diminishing returns on their network efficiency improvements. They're butting up against the limits of physics as they try to add capacity.

Any further improvements will be incremental, at best.

Take LTE-Advanced. It's the next big post-4G upgrade in the pipeline, and it's theoretically capable of speeds of up to 1 gigabit per second, about 10 times that of current 4G networks. In real-world situations, though, LTE-A will only deliver speeds of up to 15 megabits per second -- just slightly faster than the 12 megabits per second that 4G networks currently offer.

So what can 5G offer that 4G can't?

"5G won't be about more speed, necessarily," says Tod Sizer, head of wireless research at Alcatel-Lucent's (ALU) Bell Labs. "It may be faster, but it will be more about meeting the expectation of service quality."

Each generation of network technology has enabled a new set of features: 2G was about voice, 3G was about data and 4G is about video. 5G, Sizer predicts, will be about intelligent networks that can handle billions of connected devices while remaining stable and operational.

That will be tricky if the future proves as connected as industry leaders forecast.

At last week's Mobile World Congress, the wireless industry's largest annual gathering, Google (GOOG, Fortune 500) Chairman Eric Schmidt painted a picture of a not-too-distant future in which robots will travel to meetings for us and send back high-definition video over the network. AT&T (T, Fortune 500), Qualcomm (QCOM, Fortune 500), Sony (SNE) and Intel demonstrated a "connected home" where even our clothing transmits wireless signal.

It will be up to 5G network technology to know how to prioritize all the things trying to communicate. The network will have to know that it can wait until its congestion dies down to send your command to your thermostat to raise the temperature by 10 degrees when you get home -- but your phone call needs to go through immediately.

So when will 5G be ready? Officially, it doesn't even exist. The standards-setting International Telecommuication Union has not yet created a definition for 5G.

The current bleeding-edge technology, 4G, is still in its infancy. Existing networks haven't come close to reaching the theoretical maximum speeds that the technology offers, and their deployment is limited. The nation's most extensive 4G network, run by Verizon, now covers 200 million people, but they're not rushing to upgrade. Verizon has sold less than 6 million 4G-capable devices.

Sprint (S, Fortune 500) and AT&T spokesmen said they had nothing to share about intelligent network technology or anything branded as 5G.

Verizon (VZ, Fortune 500) spokesman Tom Pica said, "The future is here, and it's Verizon Wireless 4G-LTE." He added: "Personally, I'm hoping you'll put the heat on Detroit for the flying cars."

But with the rapid pace of change in the wireless industry, current 4G technology alone will be inadequate in just five years, says Bell Labs' Sizer.

"The trend of telephony is now headed towards machines that connect to the network," he says. "Networks will have to understand each application and know what quality means." To top of page

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.