American Tower operates 178.8k towers, which support the significant improvement that 5G brings, in five distinct geographical regions. The company operates towers in the United States (40.6k), India (73.6k), Latin America (40.9k), Africa (18.8k) Europe (4.8k).
American Tower, led by Thomas Bartlett, is harnessing 5G for the company. The company is deploying this advanced mobile technology, across wireless networks, which will provide high-speed data services. Additionally, 5G will further enable fixed broadband substitution. Specifically, American Tower will serve its tenants as they continue deploying additional communications equipment across their existing networks. In the United States, incremental carrier activity is being driven primarily by the construction and densification of 4G networks, as well as the deployments of 5G.
American Tower’s Perspective on How 4G Improvement Could Translate Into 5G Improvement
In daily life, whether at home, at the mall, or in an office building, wireless service needs to be better. More bars, more reliable, less dropped calls, fewer spinning circles while waiting for something to download. American Tower is dedicated to the improvement of wireless service through 5G technology.
Before 4G was introduced, around 2010, great mapping software did not exist, there was no Uber and ordering something on Amazon from the train and having it delivered at home before the end of the day, was not possible. This is because a 4G network was needed to carry all that data load.
In order to make this possible, that 4G network had to have a cost per gigabit of data for the carriers, lower than the previous 3G network. Lower costs per unit of data, allows carriers to pass along the benefits to consumers in the form of larger data plans. In turn, new services like Uber were able to be built.
From a cost efficiency and practical perspective, 5G is the logical and necessary next step in network evolution. However, 4G is still carrying the vast majority of wireless usage in the United States today. Furthermore, this will continue to be the primary network technology in the country for years to come.
5G’s Pillars of Improvement vs. 4G – American Tower View
5G technology is a combination of software algorithms, firmware, and new hardware. 5G’s technology introduction will follow a similar path as 2G to 3G and 3G to 4G. However, 5G is unique from other generational transitions because its benefits go much further than only providing increased speed and better spectral efficiency. 5G improves on 4G in five distinct ways. First, lower latency. Second, increased speed. Third, higher density. Fourth, more capacity. Fifth, spectral efficiency.
Lower Latency (i)
5G will improve by 5x to 10x the latency of the effective signaling time between the cloud response to a phone or a phone response to the cloud – and the user getting the signal back in the other direction.
Latency reduction is especially important for new use cases like virtual reality and augmented reality. In these use cases, lag times in signals can provide a literally dizzying experience for people. Gaming, on a console (e.g., PlayStation or Xbox), will become more sophisticated with virtual reality. For example, in gaming, when a user swipes their hand in the air, they are going to want instantaneous movement on the screen. In order to get that reaction, latency needs to be improved.
Finally, low latency is critical for enabling autonomous vehicle management at scale.
Increased Speed (ii)
5G will improve the speed of downloads by 10 to 100x as compared to a 4G network.
Users of 5G will enjoy the faster speeds, which will enable more video streaming. This includes more high-definition video streaming (e.g., 4K and 8K) and livestreaming of video.
Higher Density (iii)
5G will increase the capacity of a cell site. Specifically 5G will enable 300x more connections per cell, compared to a 4G network.
Higher density will unlock the Internet of Things. This will allow business-to-business devices to virtually connect everything in our lives. The new 5G network will give the networks the ability to handle millions and millions of those devices over time.
More Capacity / Network Throughput (iv)
5G will increase network throughput, which is the amount of data that goes through a cell site, by 100x.
Throughput means how fast bits per hertz of spectrum can travel to the network and how much capacity can be taken over a certain point in time or certain band of network, at each frequency. Improved network throughput will make phones react faster, with a higher-quality signal. In turn, this will enable users to accomplish more in each session on their phones. Particularly, with bits traveling from the cloud to a phone or from a phone, back to the cloud.
Spectral Efficiency (v)
5G will make it 3x more efficient for carriers to utilize their spectrum assets. Specifically, through the way that it can allocate and re-use spectrum.
Every generation of wireless technology has allowed carriers to place more bits per hertz of spectrum, that is available to them. Therefore, the cost per gigabit will go down when 5G is deployed widely in the United States.
Improved spectral efficiency thus provides a cost benefit to the carrier. Carriers will be incentivized to replace 4G algorithms with 5G algorithms, in their network. Given that carriers revenues tend to increase by only 2% to 3% a year, but their utilization rate on the network goes up 30%+ a year, they need to use every mechanism they can to reduce the cost per gigabit so that they can maintain profitability. 5G, through improved spectral efficiency, will help the carriers improve their economics.