5G is promising to revolutionize wireless communication in a variety of ways that have never before been possible. Things such as lightning-fast downloads, lower delays due to latency improvements, device connectivity that brings sci-fi to reality, and so much more are on their way. The latest generation of wireless relies on many towers and established infrastructure to work at its best and the beginning of its life cycle, expect to see 5G in urbanized, dense marketplaces.
So, this begs the question: what in the world is Loving, Texas doing as one of the most hotly contested areas for the rights to 5G spectrum licenses?
Located around 115 miles northwest of Dallas, Loving, TX is home to a lot of land and very few people. Population estimates of this small town can reach as low as 80 with the highest estimates reaching 300. This is the complete opposite of what analysts have been projecting would be the ideal marketplace for 5G to begin its journey and yet, when you look at some of the most expensive bids by proportion, this small Texas town finds itself outpacing places such as New York City, Houston, and Los Angeles.
The latest FCC auction continues to make headlines for a range of unexpected reasons. AT&T sat it out, many non-providers showed up in force, its bids reached exciting levels, and now, we are seeing one of the most rural areas one could think of receiving eye-popping bids. To put things into perspective, while the CBRS spectrum was in high demand, the average cost from a national standpoint ended up coming out to $0.215 per MHz/POP.
Loving’s came out to a whopping $141 per MHz/POP.
This figure easily destroys the field and shows that Loving’s 5G licenses are going to cost those who wish to possess them a pretty penny to even enter its marketplace. The figures on paper seem to baffle anyone who is paying attention to which markets create ideal candidates for 5G networks; however, the key to Loving’s success doesn’t lie in the opportunity presented for its population of people, but rather in the number of machines that are available around town. Specifically, when it comes to one of the state’s most notorious industries, oil.
Oil isn’t exactly having its finest moment these days. There is a shift in the markets due to a look for more sustainable energy resources, a lack of demand amplified by the COVID-19 pandemic, and political factors that are far too complex for this article to begin to explain. Still, the industry finds bright spots to expand, including the Delaware Basin, which Loving finds itself a part of. Home to almost 250,000 oil-producing wells and over 500 working rigs, we’re talking about almost half of those available in America. The trend in Loving is not surprising to everyone when considering these factors, Brian Goemmer, the founder AllNet Insights & Analytics said, “It speaks to the fact that the revenue opportunity in Loving is tied to machines using the spectrum (oil & gas), not people.”
The recent auction had seven licenses available for the Loving, Texas market, and out of these, six were purchased by oilfield companies EOG Resources and Occidental Petroleum Corporation. Chevron was involved through the name LocalLoop but ended up conceding auctions to both EOG Resources and Occidental Petroleum Corporation as well. While the exact use of spectrum has not yet been announced, both companies are some of the largest players in the Delaware Basin looking to continue their dominance and reach ambitious 5G goals. This could include providing network solutions for a variety of companies working within the same industry.
There is an increase in looking at things such as fixed wireless networks from many different companies including DISH Network. Infrastructure Networks already provide such a service for oilfield titans of industry Halliburton and Schlumberger. As we mentioned, high-speed 5G networks work better in urban markets and a large part of this is due to the infrastructure that allows for the many towers that are needed for high-band (mmWave) 5G spectrum. 5G works on three different spectrum levels and mid-band spectrum provides the ability to send wireless communication that doesn’t sacrifice as much speed as low-band spectrum while maintaining higher speed levels associated more with mmWave. With the unleashing of mid-band spectrum, creating fixed wireless networks that work for particular entities or markets can help deliver faster wireless communications on private networks. This is of great importance for organizations looking to connect devices and machinery through wireless means.
Connecting machines wirelessly is also going to transform in major ways as 5G continues to expand its reach through the country and the world. A large reason is due to its ability to power artificial intelligence (AI) functions and lower latency levels that will allow machines to communicate with each other in real time without the input or with limited input of a human to complete tasks. This concept is known as the Internet of Things (IoT) and it will play a major part in how industries conduct their business near and far as evidenced in Loving.
The possibilities that are available in the oilfield and 5G are tremendous. From automated deliveries through vehicles and boats to sensors used for drilling and everything in between, oil companies are on the cusp of receiving wireless communication that will help streamline and improve the many processes involved in finding, transporting, and extracting oil.
Many non-traditional companies were big winners during the FCC caution and with another coming in December that is positioning itself to be even bigger, it is anyone’s guess as to how the future of 5G spectrum will be determined by the auctions that are awarding valuable rights to a variety of companies. A notable name that may be involved in deciding the future of 5G, especially in Loving, Texas, is DISH Network.
DISH is continuing its year of entering 5G by being the only wireless carrier, or the other company for that matter, that won a bid for licenses inside of Loving, Texas for spectrum. After many years of acquiring a massive amount of spectrum licenses, DISH finally entered the wireless game when it acquired Boost Mobile after the opportunity became available due to the merger between Sprint and T-Mobile. To avoid a multi-billion dollar fine, DISH is responsible for covering 70% of the U.S. with a 5G network, and while its dealings in Loving may not be the largest contributor towards this goal, its fixed wireless goals and willingness to diversify as someone who provides much more than cell phone service put this small Texas town as the perfect target between its crosshairs.
Source: Light Reading