There’s no chance that fifth generation wireless, or 5G, will become available everywhere in two years’ time, according to Craig Moffett, who has been a leading telecommunications analyst for years.
Moffett, co-founder of boutique research firm MoffettNathanson, is skeptical that Verizon and other telecom companies can make the transition because spectrum — the range of frequencies an operator network is allowed to radiate — is not sufficient enough in the U.S. to completely support 5G mobile.
“There is a zero chance that 5G is a ubiquitous technology” by 2021, Moffett said Tuesday in a “Squawk Box” interview.
“The standards of 5G were set for insanely wide blocks of spectrum,” he explained. “You can’t find insanely wide blocks of spectrum anywhere but these stratospheric high frequencies.”
Verizon turned on its 5G network in Chicago and Minneapolis earlier this month, at an additional cost of $10 for customers with existing unlimited plans, beating out its rivals AT&T and Sprint. Verizon plans to spend $17 billion to $18 billion this year to build its network.
Late last year, Verizon CEO Hans Vestberg told CNBC that 5G had the potential to “disrupt industries” and “change the way you’re thinking about technologies.”
Vestberg, promoted from chief technology officer, succeeded Lowell McAdam as CEO of the No. 1 U.S. wireless carrier last year. Before joining Verizon, Vestberg spent six years as CEO of Swedish telecom powerhouse Ericsson.
Moffett appeared on CNBC shortly after Verizon posted first-quarter earnings and revenue that beat Wall Street expectations. It raised its 2019 profit forecast.
The MoffettNathanson analyst said Verizon is a “fully valued” stock, but more favorable than AT&T.
So far this year, AT&T stock is up about 12%, but down 8% over the past 12 months. Verizon shares are up nearly 4% in 2019 and almost 20% higher over 12 months.