Will There Be a 4.5G Network Before a 5G?

The second half of 2016 and early 2017 could witness a minor transformation in high-speed network technology years before the suspected jump between 4G LTE networks and 5G networks. This so-called 4.5G could be big news for the telecommunications industry, individual data plans and even entire corporate operating systems.

As it pertains to network technology, the acronym "G" stands for "generation," as in third generation (3G) or fourth generation (4G). While the definitions for first and second-generation phones are pretty clear-cut, the 3G and 4G monikers became marketing tools for all sorts of new innovations. This is why the combination of 4G and LTE is important.

LTE stands for Long Term Evolution, an advanced piece of network technology in the Universal Mobile Telecommunications System (UMTS). In short, LTE allows network consumers to enjoy faster connections while simplifying the infrastructure for network operators, thereby reducing operating costs for providers. By 2016, major providers such as Verizon Communications Inc. (NYSE: VZ), T-Mobile US Inc. (NASDAQ: TMUS) and AT&T Inc. (NYSE: T) all provided broad LTE coverage.

For the average user, 4G LTE represents an upgrade in download speeds from 3G and early 4G networks. The next step, 4.5G LTE, is actually a rebranding of what was previously known as LTE-Advanced Pro (LTE-A or LTE-A Pro).

Half-Gs or even quarter-Gs are not new. Before 3G, the General Packet Radio Service (GPRS) was touted as 2.5G and Enhanced Data Rates for GSM Evolution (EDGE) became known as 2.75G. New technologies that do not constitute entire overhauls are simply differentiated by a sub-1G jump.

Jumping between different generations of network technology typically requires significant hardware changes. This means that mobile consumers frequently must purchase new devices to enjoy the jump from 3G to 4G or from 4G LTE to 5G. One of the reasons that the 4.5G technology only receives a 0.5G distinction is because 4.5G is based on 4G evolution. Many devices with 4G LTE compatibility will only require software upgrades or minor hardware changes when switching to 4.5G.

Most carriers are not expected to deploy a fully functional 5G LTE until 2020 or perhaps even later. That can seem like quite a long time for a progress-hungry technology sector and its headline-watching investor base. The introduction of 4.5G creates a bridge between commonplace 4G technology and the distant benefits of 5G.

Some projections suggest 4.5G coverage enables download speeds two or three times faster than most basic 4G. This should be very valuable to consumers and especially businesses that want a leg up on their competitor's operating systems. The first 4.5G launch occurred in late 2015, when Chinese vendor Huawei Culture Co. Ltd (002502.SZ) joined forces with TeliaSonera Norway for a live network demonstration in Oslo.

The list of projected benefits of 4.5G includes additional public safety features, potential for increased carrier aggregation, several features to reduce latency and download speeds in excess of 1 gigabit per second (Gbps). Huawei was able to achieve download speeds of 1.41Gbps during another live trial in February 2016. Alex Ai, director of the Wireless Network Solution Department at Huawei, says that 4.5G is being designed to support virtual reality (VR), augmented reality (AR), 2K/4K video streaming and other internet-of-things (IoT) services.

One of the most anticipated aspects of 4.5G is enhanced video distribution capabilities. Businesses and consumers show a very strong appetite for anytime-ready video distribution, especially high-quality videos. Telecommunication companies see 4.5G as a vehicle for delivering huge data loads that would be cumbersome or impossible on a standard 4G network.

Additionally, IoT applications are rapidly changing the way that businesses communicate and operate. Under 4G and even 4G LTE technologies, however, IoT operations are very low speed and use up a lot of battery. 4.5G may promise some key 5G improvements, only years ahead of schedule.