Video traffic now accounts for more than half of our mobile data traffic. In fact, in the last year alone, this traffic grew by more than 75%, and smartphones accounted for almost 75% of our data traffic. We will stay ahead of this growing demand with a combination of speed, software, and data.

These three features will have a significant impact on the mobile experience of users:

Evolution to 5G
• Showcasing Speeds in the Evolution to 5G: At MWC, together with Qualcomm Technologies, Inc. and Ericsson, we demonstrated how users can achieve ultrafast speeds using technologies such as carrier aggregation, 4x4 MIMO, 256 QAM, and LTE-License Assisted Access (LAA). We also announced our plans to launch our first Evolution to 5G services in Indianapolis and Austin in the coming months. We expect our wireless network in those cities to initially offer theoretical peak speeds of 400 Mbps or more. As we continue to concentrate our network and deploy technologies such as carrier aggregation and LTE-License Assisted Access (LAA), we expect to enable theoretical peak speeds of up to 1 Gbps in some areas as early as 2017.

• 5G Trial Updates: In 2016, we launched the industry's first trial for fixed wireless customers in Austin. In 2017, we will expand our activities and trials by providing new and innovative mobile video services.

This spring, we'll launch a second trial in Austin in partnership with Ericsson's 5G RAN and Intel's® 5G Mobile Test Platform. Residential and small-to-medium-sized business customers will be able to sign up to DIRECTV NOW and access next-generation entertainment and enhanced broadband services. The trial will also benefit from the resources and capabilities of our two new 5G testbeds in Austin.

In these testbeds, we will work on advanced 5G technology concepts for fixed and mobile solutions. We will also explore 5G coverage for the 28GHz, 39GHz, and sub-6GHz frequency bands.

In February, we reached a significant milestone in collaboration with Nokia. We launched DIRECTV NOW over a fixed 5G wireless connection using 39 GHz millimeter wave (mmWave) technology at our lab in Middletown, New Jersey. This marks the world's first use of 39 GHz spectrum, which we anticipate will play a key role in 5G.

We are also enabling the 5G ecosystem with device platforms from Intel and Qualcomm Technologies to rapidly test and build interoperability for 3GPP New Radio (NR). This lays the foundation for early access to Intel's 5G modem development roadmap and advances our understanding of various spectrum bands, including 39 GHz.

• Collaboration for global standards: We are collaborating with more than a dozen global technology companies to prioritize important specifications in standards and bring 5G to market as soon as possible.

Our standards team has found that, since the beginning of 2016, AT&T is the leading contributor to 3GPP's 5G standards work among all North American wireless carriers. Our impact extends beyond the number of contributions, also including our work in standards development.

These contributions include 5G's ability to coexist in the same spectrum as LTE, an energy-efficient and battery-efficient physical layer, and a framework for massive MIMO. We made multiple material contributions to standards for all layers of the radio access network. This includes the physical, protocol, and system architecture layers, as well as the system requirements, architecture, security, and performance aspects of 5G.

• Drones: We recently conducted our first successful test flight of what we call the “Flying Cow.” We call it that because it’s a set of mobile cells with wings. We started this project at AT&T’s innovation department (AT&T Foundry), and it’s now part of our Drone Technology and Operations program. Eventually, it could provide emergency coverage in disaster areas, or at concerts or sporting events. It’s another element of our connectivity strategy.

• Virtual and Augmented Reality: Learn more about how AT&T Foundry is exploring AR/VR capabilities over 5G and 5G Evolution.
The important thing here is that we are pioneering the way to prepare for a 5G world. But we also know that going it alone is a risky strategy for us and our customers.

We've seen companies in the past race to be first with proprietary technology and end up in a dead end, forced to backtrack. Even worse, we've seen customers stuck with potentially obsolete phones and other equipment. Our intention is to be pioneers and smart in how we do this.

Our Indigo network is the result of years of planning, not only in terms of access technologies like 5G and 5G Evolution. It's also the result of our work in areas such as software-defined networking and data analytics.

SDN
• ECOMP: The Linux Foundation announced that OPEN-O will join ECOMP to create ONAP. The alignment of the two projects creates a harmonized and comprehensive framework for real-time automation of virtualized network functions (VNFs).

This will enable software, network, systems, and cloud providers, as well as developers, to rapidly create new services. We are delighted to see ONAP's membership growing as it becomes the standard "operating system" for software-defined networking (SDN). In fact, at its inception, ONAP's collaborating operators serve approximately 40% of the world's mobile users.

• AT&T Integrated Cloud (AIC): We exceeded our goal of virtualizing 30% of our infrastructure in 2016, reaching 34%. Our goal for 2017 is 55%. To achieve this, we will continue building and updating what we call the AT&T Integrated Cloud, or AIC. AIC zones are the physical locations around the world where Virtualized Network Functions (VNFs) are running. AIC is how we are bringing the network to the cloud.

We currently have over 80 AIC zones, and we plan to have more than 100 by the end of this year. The AICs operate using the open-source software OpenStack, with whom we continue to work closely to refine this platform.

2. The theoretical peak wireless speeds of Evolution to 5G will be enabled in select market areas and require a compatible device.

*This claim is based on the Nielsen Certified Data Network Score. The score includes data reported by mobile consumers in the Nielsen Mobile Insights survey, Nielsen Mobile Performance network measurements, and Nielsen Drive Test Benchmarks for Q3 + Q4 2016 across 121 markets.
**The claim regarding global coverage is based on our offering discounted voice and data roaming, LTE roaming, and voice roaming in more countries than any other U.S.-based carrier. International service is required. Coverage is not available in all areas. Coverage may vary by country and may be limited or restricted in some countries.