(Bloomberg) -- AT&T Inc. aims to be the first U.S. carrier to provide fifth-generation, or 5G, mobile service to phone customers this year, pitting the wireless giant against Verizon Communications Inc. and T-Mobile US Inc. in a costly network upgrade race to spur revenue growth.
Unlike current trials using 5G technology to beam signals between stationary antennas, AT&T said in a statement it will introduce mobile services in more than a dozen U.S. cities later this year. The company didn't offer specifics.
The faster connections will help carriers sell advanced services like virtual reality and 4K video, and enable self-driving cars. Verizon, T-Mobile and Sprint Corp. also intend to offer mobile 5G services but haven't elaborated on their plans, though Verizon expects to introduce fixed service this year in a bid to replace cable and phone modems.
While 5G technology offers a path for a slowing industry to revive growth, challenges abound. Mobile-phone companies, chipmakers, device manufacturers and software developers will need to spend about $200 billion a year in research and capital expenses to get there. And engineers will have to find ways to get the technology to work around interference from trees and rain and provide a strong enough signal to handle the anticipated demand.
For AT&T, the push toward 5G has been a series of small steps over the past three years. “Our strategy is to build targeted capabilities early and expand from that,” said Gordon Mansfield, an AT&T vice president of network and device design.
AT&T says it has laid the groundwork for 5G through network upgrades in 23 cities and fixed wireless trials in Kalamazoo, Michigan; South Bend, Indiana; and Waco and Austin, Texas. The company hasn't disclosed where it plans to launch mobile 5G initially or what airwaves or network equipment it plans to use.
AT&T rose less than 1 percent to $37.89 at 11:26 a.m. in New York. The company started a court battle last month with U.S. Justice Department, which has sued to block its $85.4 billion purchase of Time Warner Inc. The stock declined 8.6 percent last year.
To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum
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