Categories: Mobile

Verizon 5G Network Launch Foreshadows Mobile Commerce Changes

Score one for the Midwest: Verizon said this week (March 13) it will launch its 5G network in Chicago and Minneapolis on April 11. The announcement from the mobile network provider serves as the latest demonstration that 5G is coming, and that retailers and payment services providers should get ready to operate in the 5G world.

It’s probably too much to say that 2019 will be the year of 5G – deployments and use cases, especially in retail and payments, are unlikely to hit a critical mass this year – but the Verizon announcement shows major activity is underway.

“Verizon launched the world’s first commercial 5G Ultra Wideband network in October 2018 with the rollout of 5G Home broadband internet service in Houston, Los Angeles, Sacramento and Indianapolis,” the company said. The upcoming launches in the Midwest – in one city that is considered the capital of the region, and in another that is a growing destination for young, digitally-minded professionals, including those priced out of the Chicago housing market – represent more significant progress for the new mobile network technology.

5G Potential

A glimpse of the 5G future recently came from the Mobile World Congress in Barcelona. The annual gathering, which ended March 1, featured 5G as one of its main themes, perhaps best expressed by Jonathan Davidson, wireless executive at Cisco Systems. According to The New York Times and other reports, he said during the gathering that “5G was ready for prime time, and would enable new applications in augmented reality, healthcare and industrial factories.”

By way of further example, “the consensus message” emerging from the conference seemed to be that “with the worlds of artificial intelligence, machine learning and cloud computing aligning, the momentum behind 5G is almost irresistible,” according to another conference report.

Mickey (Hiroshi) Mikitani, CEO of Japan-based Rakuten, told conference attendees that “we are building the first end-to-end, fully virtualized, cloud-based 5G network. New services can be deployed in a very nimble manner. We don’t have specialized hardware. Everything is software and virtualized and put in the cloud.”

Meanwhile, at the CES show in Las Vegas in January, companies demonstrated potential 5G use cases. “For instance, Verizon is partnering with Walt Disney’s StudioLab to explore how next-generation connectivity can improve Disney’s content production and transmission,” read one account. “Meanwhile, Skyward President Mariah Scott said Verizon is committed to being the first to connect one million drone flights on its 5G network.”

Verizon’s 5G Play

That’s the big picture, of course – the grand ideals that payments and commerce players are working toward via the new 5G mobile network technology.

More specifically, the upcoming Verizon 5G rollout in Chicago and Minneapolis represents, according to one report, development of the company’s “first standards-based 5G network.” As that report explained, “last year, Verizon launched in-home 5G service based off proprietary specifications. The 5G launching in Chicago, Minneapolis and eventually other cities is different, and based off standards developed by 3GPP. The two 5G networks are not compatible, meaning owners of a 5G phone will not be able to use it on the 5G in-home network.”

According to Verizon, “5G Ultra Wideband technology uses new radio technology and new device hardware to deliver advanced capabilities to consumers and businesses. When customers move outside of Verizon’s 5G Ultra Wideband coverage area, the 5G moto mod automatically and seamlessly hands off the signal to Verizon’s 4G LTE network.”

As PYMNTS has reported, Verizon plans to bring its 5G technology to 30 U.S. cities by the end of 2019. T-Mobile has also said it plans to launch 5G in 30 cities. As for AT&T, it reportedly launched 5G service in these cities: Houston, Texas; Dallas, Texas; Atlanta, Texas; Waco, Texas; Charlotte, North Carolina; Raleigh, North Carolina; Oklahoma City, Oklahoma; Jacksonville, Florida; Louisville, Kentucky; New Orleans, Louisiana; Indianapolis, Indiana and San Antonio, Texas.

The new mobile network technology known as 5G will offer retailers and marketers the ability to send higher-resolution videos to consumers – “viral videos” are part of consumers’ culture these days, and images almost always work to boost purchases and spending, as recent PYMNTS coverage has shown. Video, in fact, makes up half of AT&T’s mobile traffic, as Mo Katibeh, chief marketing officer for AT&T Business, told a reporter, adding that video traffic over the network increased 75 percent over the last year.

The Verizon announcement about the upcoming April launch of the 5G network in the two most important cities in the Midwest (no offense to St. Louis, Indianapolis or even Des Moines, all fine places to visit and live) is further evidence that a new era of mobile commerce and payments is on the horizon.

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About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.