Verizon (VZ) and AT&T (T) have agreed to delay the launch of some C-Band and 5G services until July 2023, according to a Reuters report. The pushback will give airlines ample time to retrofit airplanes with vital frequency filters to address critical risks from 5G wireless. The filters will ensure airplanes don’t face any interference while trying to land.
5G Risks
Early this year, AT&T, Verizon, and other carriers agreed to delay the launch of 5G wireless services near airports. There have been growing concerns that the 5G service could interfere with airplane altimeters, a key component that provides data on the plane’s height above ground. The altimeters are also essential for bad weather landings.
The Federal Aviation Administration has been pushing airlines to retrofit vital filters designed to address the risks arising from 5G wireless. Around 7,000 commercial aircraft could need upgrades in the U.S. to address the risks caused by 5G wireless connections.
However, Airlines for America, a trade group representing key airlines including Delta Air Lines (DAL) and United Airlines Holdings (UAL), has already raised concerns over the July 2023 deadline for retrofitting the new radio altimeters filter.
According to the trade group, the FAA has yet to approve any solutions, and manufacturers have yet to manufacture the products for most of the fleets. Consequently, it is unclear if the carriers will meet the deadline.
5G Limits Liftoff
Key stakeholders from the wireless and aviation industries have already identified key measures for protecting air travel and cell phone services over the next 12 months. As a result, Verizon and other carriers are poised to slowly lift self-imposed limits on their 5G networks near some airports over the coming months. Conversely, consumers and businesses stand to take advantage of the full capabilities of 5G technology.
AT&T has already found a way to activate more towers near the airports and increase signal strength. According to wireless companies, cellular frequencies don’t pose any threat to aircraft as they are already in use worldwide.
Wall Street’s Take
The Street is optimistic about the stock, with a Hold consensus rating, based on three Buys, six Holds, and one Sell. The average Verizon price forecast of $56 implies 14.17% upside potential from current levels.
Blogger Opinions
TipRanks data shows that financial bloggers’ opinions are 92% Bullish on VZ, compared to a sector average of 65%.
Key Takeaway for Investors
Verizon agreeing to delay some 5G deployment should help safeguard operations in the airline industry. In return, the carrier is poised to lift involuntary limitations on its 5G network deployment, a move that should allow it to attract more consumers and businesses looking to take advantage of 5G technology’s full capabilities.
