AT&T Inc. (NYSE:T) stock looks better and better as the wheels of the impending acquisition of Time Warner Inc (NYSE:TWX) have continued to spin. Even better, all of the other initiatives it planned weeks and even months ago continue to gel. Case in point? Last week, the company announced 5G connectivity was being tested in three new markets, further expanding the telecom giant’s 5G network. Things are looking great for the future of T stock.

While most consumers as well as AT&T stock holders understand 5G connections are better than the current 4G standard by virtue of their higher speeds, that may be extent of their understanding.

To that end, the potential of 5G and AT&T’s lead in its widespread adoption merits a closer look.

What Makes T Stock So Great? 5G

It’s a term that’s been batted around for a while now, though most who’ve heard it may not even know exactly what it means.

5G connectivity, as opposed to 4G connections to wireless internet service commonly used now, is simply a shorter way of calling the underlying technology a fifth-generation iteration of broadband delivered via radio waves.

As one might suspect, it’s faster than 4G connections (theoretically on the order of ten times as fast), though actually achieving those speeds is unlikely due to the structural interference all around you. Even so, the connections will be fast enough that the bottleneck becomes the processing power (or lack thereof) of your handheld device rather than the connection itself.

It’s not so much the ability to download high-quality movies on your smartphone or browse the web faster, however, that makes 5G a game-changer. It’s the amount of data that can be ferried between devices and networks that you don’t hold in your hand. That’s right—5G connectivity will serve as the foundation for the Internet of Things vision that’s so far been mostly unrealized. Denser data delivery means bandwidth and radio waves won’t face constant interference from other IoT devices.

And perhaps most important to owners of AT&T stock, the company is on the cutting edge of the that evolution.

AT&T’s 5G Foundation

While the real beneficiary of 5G’s advent will be the Internet of Things movement, make no mistake, you’ll get your fair share of high-speed mobile broadband on your smartphone while you’re out and about. The technology promises as much as 10 Gbps connections, which is within the same realm of the speed your wired, at-home broadband connection is able to muster.

AT&T is actively looking for ways to become one of the first if not the first telecom service providers to deliver consumer-oriented 5G to the masses too, announcing in late August that three more cities were being added to the list of places were 5G connections were being tested. All told, it aims to offer 5G connectivity in more than 20 markets before the end of 2017. The only thing keeping faster deployment in check is logistics; 5G connections require new antennas affixed to cell phone towers.

While the slow roll out of these high-speed connections are tangible and modestly exciting to T stock holders, it’s what AT&T has done that you can’t readily see that’s more than compelling.

One of those developments is the idea of edge computing.

In simplest terms, edge computing means any data processing that needs to be done isn’t done by an IoT device or sensor, but rather, in the cloud itself. For this to practically work with more intensive Internet of Things applications and hardware though, there can be little to no delay, or latency, between the cloud and the device. Only 5G connections are capable of achieving latency times measured in single-digit milliseconds, allowing ‘edge computing’ to become a reality. Included in this list of technologies that will rely on near-real-time connections are augmented and virtual reality, and autonomous vehicles. 4G connections just won’t cut it.

On the consumer side, AT&T has successfully toyed with the delivery of its DIRECTV NOW television service using 5G connections, creating a means of entering new cable television markets without laying down any new cable lines.

Looking Ahead for AT&T and T Stock

None of this is to suggest other telecom players aren’t coming up with 5G solutions of their own, even before 5G connectivity has become a practical reality for a meaningful number of consumers and businesses. Verizon Communications Inc. (NYSE:VZ) is working on using 5G connections to wirelessly deliver broadband to homes… a connection handled by a specially-built router/receiver. Meanwhile, T-Mobile US Inc (NASDAQ:TMUS) has vowed to establish a nationwide 5G network by 2020, leveraging its cache of low-frequency spectrum. T-Mobile’s end-goal is to make your smartphone an incredibly-powered connected device.

Of all the entries in the 5G race though, AT&T seems to be the most progressive-thinking. It’s not just figuring out how to make gigabit connections happen, but figuring out how businesses and consumers can and will utilize it, and pre-solving problems before most users even realize the hurdle exists. That’s why AT&T stock remains the best of breed within the wireless telecom industry.

As of this writing, James Brumley held a long position in AT&T. You can follow him on Twitter.