12/3 Updated from 160M to 170M based on the Chinese decision to sell 150M subs. ** If people realize that 5G has few if any practical advantages, they could hold off buying it. If TSMC can’t raise production sufficiently, that would be a major holdback. Nearly all 5G chips except Samsung are produced at TSMC, which is already asking six month’s lead time on new orders.
Almost all US and European 5G builds are so limited they are essentially pr. While many of the top European tech people agree with me accelerated builds are a smart move, their CEOs still are holding back.
My guess is the Europeans will respond when they realize the demand, but none are moving yet. Currently, they are counting on a gentleman’s agreement not to build. If all the companies hold back, the reduced investment will increase cash flow.
Top management at companies like Vodafone and Telefonica fear they will gain little from speeding the deployments, because the incumbents will respond in kind. That’s probably wrong; a company the size of DT can’t change plans that quickly. Even a six-month head start would yield a profitable first-mover advantage.
DT CEO Tim Hottges is confident Germans will hold back on 5G. He has frozen capital spending at a level that implies most of Germany will not be served for several years. Randall Stephenson of AT&T agrees. He won’t even sell 5G to consumers.
One of the very best analyst outfits tells me they are sticking with an 80M estimate for 2020. They are skeptical of the actual Chinese purchase figures and see their fellow Europeans holding back.
210 million is my surprise free scenario, but surprises always happen. I believe the three above are unlikely but certainly are possible.
We only have a month’s data from China, which will be more than half in 2020. I’ll be much more confident with a little more data.