One of the best ways to understand telecom

I’ve been covering the industry since 1999, always trying to get closer to the truth. I’ve learned from hundreds of the best. If you’re trying to understand telecom, I’m always happy to exchange ideas. If you’re in the industry and need answers, ask me. Our consulting rates are fair and if I can’t help you I’ll say so. Dave Burstein [email protected]

Consulting

When you need analysis, research, or project management, consider us. A different point of view on your plans. A perspective that’s informed by very wide experience. Call me. Dave Burstein [email protected] 347-603-6442

We have little overhead so our fees are usually somewhat lower.

Teleinformed — Expert on call

The best, fastest way for you and your team to learn the latest. An informed expert on call when you need answers or an outside opinion. A news service customized by hand for what you need.

All based on what you tell me are your key interests. IoT in 5G? Edge in the Data Center? Germany competition? Spectrum sharing? Price of phones? Is Open-RAN ready? or …
I spend untold hours researching every week, with help from Google translate. Guaranteed to find useful information easily missed.

  • A monthly customized news presentation, probably via Zoom, with plenty of time for your questions.
  • Up to six calls looking for specific information, such as the history of a new customer or a country’s regulatory policy. Including a reasonable amount of research.
  • Brainstorms on your new ideas, combined with reality checks. Any reasonable amount of time.
  • Regular emails when I discover news important to you. E.g. The customer of a client has a new initiative that would be natural for sales follow-up.

Targeted package, $300/month, paid quarterly. Satisfaction guaranteed or money refunded.

Press

Happy to answer questions, offer background, share data and sources, and quickly provide quotes. Dave Burstein 347-603-6442 [email protected]

Release August 18 Analysis Branch: 80 million 5G subscribers in Q2 prove 5G is real.

  • 5G use is exploding. At the end of June, China had ~65 million 5G phones, Korea 7.35 million, the U.S. 4-5 million, and the rest of the world perhaps 4 million. 5
  • As Chinese phone prices (US$199-260) reach the West and Apple releases the 5G iPhone, monthly growth will reach more than 20 million per month. See 5G Phones $199-260
  • By August, 5G users have reached 100 million. 14 million phones shipped in China in July
  • “5G still doesn’t have any use cases,” writes top Wall Street analyst Craig Moffett.

Releases in draft: December 2020 estimate of 210 million. 2022 1.5B

Washington Post: Burstein estimates Chinese consumers will buy up to 200 million 5G phones next year …
NY Times: It’s impossible to have a widespread network that quickly …

Analyzing Telecom

Hottges
5G is not raising Canadian capex

TRAI is demanding that all telecom gear, not just phones, move to Made in India.

Turkcell’s Superbox 4G fixed wireless added 91,000 subscribers Q2. With far more 4G capacity than they can sell, telcos including Verizon are promoting 4G fixed.

Canadian telcos claim 5G at 1.7 Gbps. Actually, in the spectrum they have, 300 Mbps would be extraordinary in a real test. In the lab, they can combine four 4G bands (1.2-1.4 Gbps) with a single 5G band to reach that figure. 4G is still faster than low-band 5G until many problems are solved.

The first substantial 5G testing results are unbelievably bad. (Open Signal.) The scam of “low-band 5G,” spreading in Germany, is slower than decent 4G. Indoor results, including mid-band, are dismal.:

  • Verizon mmWave 5G customers connected 0.4% of the time despite $billions spent on the network.
  • Korea has >90% outdoor coverage but only 15% 5G connection rate
  • T-Mobile 5G 49 Mbps, AT&T 61 Mbps. Canada 4G 69-75 Mbps
  • My analysis, that 5G capacity would be great, may be totally unsound.
  • Latency at Verizon is 30 ms; no 5G deployment has very low latency. 1-10 ms is a fantasy outside the labs.
  • 10-20 ms latency will be possible in the few places outside China building Edge networks.

17.6 million 5G phones in June in China is on track for 150 million year-end. Fine phones from US$230-260 and $13 service plans driving demand, although few practical uses have developed.

Craig Moffett warns about “the fallacy of marginal cost advantage. … It’s not true with telecom.” Remarkable technical advances have resulted in more capacity almost everywhere than the telcos can sell. Result: the low costs of Verizon’s mmWave or Rakuten’s new network are useless unless buyers can be found. Verizon’s Hans Vestberg is learning that the hard way.

5G slower than 4G in the US Finally, Data: US 5G slower than Canada’s 4G. Believe it and Germany.

A huge question for Edge inside telco networks is whether the web giants will take over. It’s now clear most Edge is a hybrid cloud and hybrid clouds need huge teams of engineers to manage. Many telcos are deciding to hand over to the web giants and take a (modest) percentage. Even the telcos building their own, like Verizon and DT, will find profits hard to come by, Pal Zarandy notes. “Buyers like Google, Amazon, Microsoft, Facebook with massive bargaining power would bargain away MNOs’ margins. Near zero marginal cost network economics => near zero margin to be made on wholesale access.” He’s talking about other services than Edge but the point holds. Will the telcos be able to cash in on their terminating monopoly? To be seen.

Keith Bradsher in the NY Times dramatically makes clear the effectiveness of industrial policy support in his article on the growth of Chinese medical supply manufacturers. Indian telecom production is booming under protectionism. Ericsson & Nokia benefit from over a $billion in EU R&D in 5G.
The US chip industry has come together to demand $30 billion. Senator Mark Warner wants $billion for 5G in the U.S. From cruises to autos to pharma, business leaders decry government support except for their own companies.
US policy for 40 years has been to stimulate the economy with tax cuts, although only a small fraction of the money goes to expanding investment. The money would be far more effectively used for investment in strategic industries. That works whether the government is capitalist or communist – so long as it’s not captured by industry or totally corrupt.

“The Moving Finger writes; and, having writ, moves on.”  If you’d like America’s top China trade rep to speak for you instead, Jeffrey Gerrish has abandoned Trump and returned to Skadden Arps. Million dollar retainers expected.

“What jumped out to me was how users’ current thoughts are mostly around smartphones, IoT/sensor data collection, display boards, CCTV and so on. Whereas MNOs are focused on automation, robots, AR/VR and the ‘sexier’ applications.” Dean Bubley writes, adding that all the likely apps work fine on 4G. Telefonica CTO Enrique Blanco also wonders whether 5G is actually needed for IoT. (Hint: not.)

Some people still think 5G is expensive to build. AT&T & Orange are cutting capex while building 5G. Deutsche Telecom is keeping it flat. 5G does not cost more than 4G.

Tim Hottges, CEO of DT, is the Great Welsher. TMO wants out of merger agreements to serve 93% of Californians with carefully tested 300 Mbps by 2024 and to cut 1,000 jobs.

Telcos’ greatest problem: demand growth is slowing while technology is increasing at a ferocious rate. Hans Vestberg of Verizon claims, and I can confirm, that cost per bit is going down at 40%/year. Traffic growth is now typically 25%-35%. Every investor implicitly acknowledges this: the number of subscribers is crucial to the stock price response after quarterly earnings.
That’s the reason why millimeter wave, the real 5G, finds so little demand. When the enormous capacity of mid-band spectrum became clear, carriers realized they would have more capacity than they could sell without mmWave.
The primary factor in telco profitability is how close the carriers come to cartel-like pricing. CEOs talk about “rational pricing,” a true description that should be a signal to antitrust enforcers. When carriers have unused capacity in most locations, the natural act is to break from the (unspoken) cartel.

For a good understanding of AI today, read Architects of Intelligence: The truth about AI from the people building it by Martin Ford. To understand China, the U.S. and what’s going on, Kai-Fu Lee’s AI Superpowers: China, Silicon Valley, and the New World Order is deeply informed but easy to read. AI/Machine Learning has limits. It is great for translation, video surveillance, and speech recognition. It’s been disappointing, so far, in tasks like network optimization. (That could change)

Multi-cloud and hybrid cloud are crucial trends in data centers, Equinix is demonstrating, per Nick Del Deo of Moffett.

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250M 5G Subscribers End 2020 150M Q3

230-250 million 5G yearend as phone prices fall to US$199-260. 5G subscriber numbers are exploding. 100-120 million 5G phones will sell in Q4, many of them Apples. China will add at least 50 million. 70% of the phones selling in China are 5G and likely over 90% by mid-2021. I’m reworking my 2021 &…

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5G Need to Know: Sales exploding, performance poor, 0 new apps

147 million subs September 2020, 117 million in China. Yearend likely 230-250 million, including 30-50 million iPhone 12. Decent 5G phones cost US$200-250 in China, with 6.5″ screens and multiple cameras. As China prices move West, 2021 will blow out. Forget gigabit speeds and 1 ms latency. Mid-band speeds mostly 100-400 Mbps. Low-band typically…

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562,656 Koreans go back to 4G

5G has so few practical uses that half a million Koreans have gone back to 4G. The saving is modest; otherwise, millions would have gone back. 4G speeds averaged over 50 Mbps in 2019. 4G is probably much faster today. 5G averages 300 Mbps across about a third of the country. So what? What…

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844 low latency Starlink satellites: Musk changes rural possibilites

Starlink latency averages 30 ms, similar to 5G’s reality. Speeds measure up to 100 Mbps, although some only get half that. Upstream is usually 10-40 Mbps. Caps haven’t been specified but will almost certainly be higher than current satellite offerings. By most standards, the performance is decent. A Redditer posts Starlink is 600x better…

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Need to know: Real 5G speeds and spectrum (3 minute read)

Takeaway: 95+% of 5G is lowband (< 1800 MHz or mid-band (2500-4200 MHz.) Asia, TMobile US, and much of Europe is mid-band.80-200 MHz of spectrum usually delivers 100-400 Mbps. Low-band (AT&T, much of DT & other European, runs at 4G speeds and sometimes lower. See AT&T data below.Millimeter wave often does 500 Mbps and…

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Need to Know: 5G Spectrum – Think mid-band

Takeway: Decent 5G until around 2025 will be mostly mid-band, 2500-4200 MHz. Frequencies lower than 2100 MHz essentially deliver 4G capacity. Millimeter wave, 20 GHz and above, can deliver gigabits but will be rare until the middle of the decade or later. It’s expensive, and the carriers don’t see much market. Heretical but true:…

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Open RAN Experts: Not quite ready for prime time

Open RAN works, but the strongest supporters are clear it has a way to go. CTO Tareq Amin of Rakuten, with the most advanced deployment in the world, had to spend “hundreds of millions” on custom chips to get the performance he needs. My unofficial numbers are custom chip cost wiped out all the…

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