Beijing: 47,000 5G Bases, 1 ms Fiber Ring

Beijing, a city of 22 million people, has more 5G cells than the entire United States, with 10 times the population. All are 100 MHz+, either in midband or 700 MHz. Speeds will generally be in the hundreds of megabits and occasionally a gigabit.

5G covers the heart of the city, the area illustrated at left. That’s about 10 million people. There’s also good coverage of the rest of the city and almost all of urban China.

A government report claims the cells are connected by a 1 ms ring. 1 ms almost certainly is not the average speed between 2 locations, which will often require passing through several routers. My source wasn’t explicit about what was measured.

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Analysis Branch: 100 million 5G subscribers in August, 84M+ in Q2, prove 5G is real.

210 million 5G yearend as phone prices fall to US$199-260.

New York August 31, 2020
Contact: Dave Burstein, 347-603-6442 daveb@dslprime.com

  • 5G use is exploding. At the end of June, China had ~67 million 5G phones, Korea 7.35 million, the U.S. 4-5 million, and the rest of the world perhaps 4 million. 5G fixed wireless added perhaps 4 million more.
  • China’s 88M the end of July https://bit.ly/2CPJEHH, combined with my reporting below, implies 5G reached 100M users between July 20 and August 5.
  • Saudi Arabia average 5G download 414 Mbps, 34% coverage leads the world. US, Europe mostly dismal. Open Signal
  • 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 including screenshots of phones on sale at jd.com.
  • December 2020 will almost certainly reach 200 million. 210-220 million is more likely.
  • “5G still doesn’t have any use cases,” writes top Wall Street analyst Craig Moffett.

This release is different We show our work so you can judge for yourself the accuracy. This is the full report, with details. See a discussion of sources and accuracy is at the end.

Q2 2020 5G: 84 million subscribers

China ~65 million, based on the number of phones sold reported by CAICT. Perhaps 4 million routers and fixed systems.
Korea 7.35 million, reported by the companies in financial reports
U.S.A. 4-5 million. That figure is based on phone sales reported by M-Science & Strategy Analytics.

Contact Dave Burstein 347-603-6442 (New York) Deadlines understood. Ask for background, short quotes, sources, or whatever you need. Broadband and telecom since 1999

100 million were connected by late July

China added about 14 million more in July. Korea probably 500,000. Japan is picking up, with NTT DOCOMO at 90,000 in July. The big gains in the U.S. will start in September (T-Mobile, now advertising heavily.) When the iPhone 5G ships in October or November, Verizon and the Europeans expect strong demand.

Yearend 2020: 210 million 5G users

The 210 million estimate and 65 pages more of analysis is at https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future. I’ll have an updated version shortly and a followup release.

By the end of 2020, we expect 210 million 5G subscribers. With 30 million phones sold in China in June and July. China is on track to easily meet the 150 million plan for the year. The U.S. will also accelerate. T-Mobile is upgrading about 3,000 towers per month to 100-400 Mbps and has begun aggressive sales.

Decent 5G phones are shipping in Europe for 400€. Huawei, Xiaomi, Realme, Oppo, and Vivo are offering decent, 6.5″ 5G phones in China for US$199 to $260. See 5G Phones $199-260 and Coolpad $199 5G phone with Unisoc Ziguang Zhanrui Chinese chip

When those prices reach the West, many Android buyers will choose 5G because the price difference is modest. When the 5G iPhone ships in volume, the Europeans and Verizon expect very high sales. (Possibly in October.)

5G in 2020 is mostly 100-400 Mbps, not the promised gigabits

The low prices will drive 5G sales in 2020, not any new 5G applications. There aren’t any that inspire people.

The performance hype is ridiculous. Open Signal reports latency is similar to 4G. Verizon claims 30 ms. 1 ms latency is a fantasy outside the lab. Low-band speeds are often slower than 4G, especially at lower frequencies. See Finally, Data: US 5G slower than Canada’s 4G. Believe it

Analysis Branch figures are higher than almost all subscriber estimates in the West

In December 2019, I put out a 210 million estimate for the end of 2020. Xiaomi dropped the 5G price to US$285, a demand driver. China officially set a plan for 150 million, which was forcefully echoed by the three telcos. Although most estimates for 2020 were ~ 1oo million, my research suggested the Chinese would deliver.

Chinese telcos, among the largest in the world, have consistently made their numbers for the last decade. 300 million were connected to fiber to the home in about four years. Minister Miao Wei last spring said, “Accelerate!” The carriers have delivered.

Company leaders no longer go to jail for missing quotas, but MIIT can and often has fired any executives who come up short. The $100 billion (sales) $14 billion (profits) China Mobile could increase marketing and phone subsidies enough to reach 150 million. It’s on track already.

5G is selling far above almost all predictions except mine because the phone price in China is little more than 4G. Decent phones go for US$199-260 in China, with prices falling there and everywhere else. Tens of millions of people have decided to pay the small premium for a phone that won’t be obsolete as soon. I would.

About the data

I have only indirect data on most of the world. If you want to be accurate, please think of the range of 83 million to 92 million rather than the 84 million headline figure.

I’m including a figure of 4 million 5G routers and pucks. Unfortunately, I can find no primary data. The 4 million is a guess. I have not tried to divide them by country. Data extremely welcome.

An analyst firm put out a 63 million figure for Q1, almost certainly a mistake but frequently repeated. The highest plausible estimate of 5G phone sales in 2019 and the first quarter of 2020 is 45 million and it is probably a lower than that. (Strategy Analytics reports 24 million for Q1 2020)

I’ve urged them to put out a correction and am not naming them here.

“I make many mistakes,” the Butler said. I’m sure I have some, although I’ve done a great deal of research, daveb@dslprime.com I’ll issue a correction ASAP.

Country details:

China: ~65 million.
China’s telcos are reporting ~115 million “5G contracts” but an authoritative government source (CAICT) reports only 64 million 5G phones shipped. Since 4G and 5G contracts are the same price, I assume the telcos are persuading many 4G customers to sign up for a “5G contract.” China doesn’t need to overstate the numbers; even the lower figure is three times as many as the rest of the world.
Over 410,000 base stations have been upgraded and 15,000 more are being done each week. China Mobile expects a total of 600,000 5G cells yearend, covering about 700,000,000 people. All is mid-band.
17 million 5G phones shipped in June, many selling for US$230-260. 30-gigabyte service costs $13-18/month. China is on track to easily meet the 150 million year-end target. Counterpoint reports 60% of 5G phones in June were Huawei, which has shipped over 20 million 5G phones in China and probably over 30 million worldwide.
Unofficial sources claim July is far ahead of June.

Korea: ~7.35 million
All are mid-band, mostly 100-400 Mbps down. Open Signal data implies the indoor coverage is terrible. See 5G #fail. 85% no 5G in “90% covered” Korea

U.S.A. 4-5million.
US 5G coverage is awful, so I was surprised when Strategy Analytics reported Samsung sold over 3 million expensive 5G phones in Q1. Most probably were sold by Verizon, despite Verizon customers only connecting to 5G 0.4% of the time. I infer that high-end Samsung buyers are spending more for a phone that will not be obsolete in a year or 2. CEO Hans Vestberg has said people are buying 5G phones even where Verizon does not have 5G coverage.
So far, almost all AT&T & T-Mobile has been the ridiculous “low-band 5G,” actually slower than much 4G. See Finally, Data: US 5G slower than Canada’s 4G. Believe it The companies are making it nearly impossible to separate the 5G at 4G speeds” from other 5G. I will exclude them if I can. Any reporter or analyst who doesn’t try to make the distinction should point out that much “5G” is slower than much “4G.”

Europe ?2 million
No European carrier has enough 5G customers to release a figure. I infer from that and the limited availability that there are few actual subscribers. More data welcome.

Gulf ? 1 million
The UAE, Qatar, and Saudi Arabia have some of the most extensive deployments of 5G. There is little or no public data on the number of subscribers. Ooredoo Qatar reports 200,000 subscriptions Q2.

Japan ? 0.3 million
3 carriers are deploying. NTT DOCOMO reports 150,000 subscription Q2 and 90,000 more in July. It is shooting for 2.5 million early next year.
Rakuten, the first telco in the world to build a completely virtual system, is not yet ready to turn on 5G. When it does, expect major changes. It has already covered a quarter of the population and expects to reach 70% early next year. See Rakuten virtualized 4G now covers quarter of Japan. It is half as expensive as NTT and will be a fierce competitor. 2021 totals for Japan look to be 10-12 million.

South and Southeast Asia ?0.3 million
Viettel and almost all the Southeast Asian countries are just starting to deploy. Jio in India is ready to move rapidly when the government approves. Look for very rapid growth in India in 2022 and possibly earlier. The projections of 18 million in 2024 are far too low.

Australia ?0.2 million
Lots of pr, little data

Latin America ?0.1 million
Almost all talk so far.

Africa ? 0.1 million
MTN in South Africa has recently deployed mid-band, but few subscribers so far.

Canada ? 0.1 million
Just getting started

Russia, most of Latin America, and almost all of Africa have little more than pr.

Total: About 80 million phones Q2 and perhaps 4 million fixed home systems.

Sources and accuracy

China’s government CAICT is the source for the phone sales figure. It reports phones shipped so I have to adjust for units in transit and dealer inventory. The Chinese carriers are reporting about 115 million “5G contracts” but only about 70 million 5G phones have shipped in China.

Korea’s 3 telcos provided figures in their quarterly financials.

The U.S. estimate is based on Strategy Analytics estimate of 5G phone sales plus a small number from 2019. M Science reports about 1 million fewer sales. The companies say nothing.

Few other companies have reported subscriber numbers, from which I infer they have very few. The 4 million figure for Rest of World is highly uncertain.

I have found no figures for the number of homes connected by 5G routers. My 4 million estimate is also highly uncertain.

The most widely reported figures — not ours — for Q1 almost certainly are 40-50% too high.

For estimates of year-end 2020 and through 2025, https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future/

Analysis Branch and our reporting date back to 1999, when Dave Burstein started covering broadband from its very beginnings. Since then, we’ve had the chance to learn from hundreds of the best industry and academic leaders. Jennie Bourne and Dave have written two books, been quoted by the WSJ, NY Times, & Washington Post, spoken at Columbia University, chaired 8 conferences, and traveled the world looking for news.

Contact Dave Burstein 347-603-6442 (New York) Deadlines understood. Ask for background, short quotes, sources or whatever you need.

China is > 70% of 5G as subs pass 80M

At the end of June 2020, China had ~65 million 5G phones, Korea 7.5 million, the U.S. 5-6 million, and the rest of the world perhaps 4 million. In June 2019, Minister Miao Wei told the giant Chinese telcos “accelerate” and the results are extraordinary. China has upgraded 415,000 base stations and are adding 15,000 more each week. It will easily surpass the 2020 goal of 150 million.

Korea is second with 7.5 million subscribers but will soon be passed by the U.S. Korea added 800,000 5G users in August 2019 but the telcos cut back promotion and now add ~500,000 per month. The U.S. began the year shipping over 1 million phones per month, but closing stores slowed down the pace. With the 5G iPhone and accelerated marketing from T-Mobile, the U.S. will be at least 12 million by year and possibly as many as 17 million.

Sales in the rest of the world are so slow that the carriers refuse to release figures. 4 million is a plausible total but data is limited.

Decent phones sell for US$230-270 in China, as 11 makers are fighting for a market where all but 4 or 5 will struggle. The Chinese and Korean deployment is all mid-band, with speeds typically 100-400 Mbps down.

The much-hyped low latency is still in the labs and “1 millisecond” will be a fantasy for years. Verizon claims 30 ms latency, although some tests are lower. Open Signal reports “no significant improvement in 5G latency over 4G.”

Which means none of the promised use cases are gaining traction.

June 2020 H1 5G subscribers 86M (84M-92M)

With decent phones selling for US$230 and the price going down, China will almost certainly meet the yearend 150 million plan. Verizon and others expect a big boost from the iPhone 5G, so I’m confident in my 210 million year-end figure. That estimate and 65 pages more of analysis is at https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future/

5G performance is highly disappointing. While Korea claims over 90% coverage, Open Signal only connected to 5G 1 in 6 tries. 5G #fail. 85% no 5G in “90% covered” Korea I believe, but haven’t confirmed, that the problem is that mid-band struggles getting indoors. Low-band speeds are often slower than 4G, especially at lower frequencies. See Finally, Data: US 5G slower than Canada’s 4G. Believe it

Latency is about the same as decent 4G. Verizon claims 30 ms. 1 ms latency is a fantasy outside the lab. Essentially none of the highly touted “use cases” and “new apps” have appreciable takeups.

5G is selling far above almost all predictions except mine because the phone price in China is little more than 4G. Decent phones go for US$230-260 in China, with prices falling there and everywhere else. Tens of millions of people have decided to pay the small premium for a phone that won’t be obsolete as soon. I would.

Much more June 2020 H1 5G subscribers 86M (84M-92M)

For estimates of year-end 2020 and through 2025, https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future/

June 2020 H1 5G subscribers 84M (82M-92M)

210 million 5G yearend as phone prices fall to US$199-260.


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. 5G fixed wireless added perhaps 4 million more.

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 including screenshots of phones on sale at jd.com.

By August, 5G users have reached 100 million. 14 million phones shipped in China in July

December 2020 will almost certainly reach 200 million. 210-220 million is more likely. The 5G iPhone

“5G still doesn’t have any use cases,” writes top Wall Street analyst Craig Moffett.

We show our work so you can judge for yourself the accuracy. This is the full report, with details. See a discussion of sources and accuracy is at the end.

Q2 2020 5G: 84 million subscribers

China ~65 million, based on the number of phones sold reported by CAICT.
Korea 7.35 million, reported by the companies in financial reports
U.S.A. 4-5 million. That figure is based on phone sales reported by M-Science & Strategy Analytics.

Perhaps 4 million routers and fixed systems.

100 million were connected by late July or early August

China added about 14 million more in July. Korea probably 500,000. Japan is picking up, with NTT DOCOMO at 90,000 in July. The big gains in the U.S. will start in September (T-Mobile, now advertising heavily.) When the iPhone 5G ships in October or November, Verizon and the Europeans expect strong demand.

Yearend 2020: 210 million 5G users

The 210 million estimate and 65 pages more of analysis is at https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future. I’ll have an updated version shortly and a followup release.

By the end of 2020, we expect 210 million 5G subscribers. With 30 million phones sold in China in June and July. China is on track to easily meet the 150 million plan for the year. The U.S. will also accelerate. T-Mobile is upgrading about 3,000 towers per month to 100-400 Mbps and has begun aggressive sales.

Decent 5G phones are shipping in Europe for 400€. Huawei, Xiaomi, Realme, Oppo, and Vivo are offering decent, 6.5″ 5G phones in China for US$199 to $260. See 5G Phones $199-260 and Coolpad $199 5G phone with Unisoc Ziguang Zhanrui Chinese chip

When those prices reach the West, many Android buyers will choose 5G because the price difference is modest. When the 5G iPhone ships in volume, the Europeans and Verizon expect very high sales. (Possibly in October.)

5G in 2020 is mostly 100-400 Mbps, not the promised gigabits

The low prices will drive 5G sales in 2020, not any new 5G applications. There aren’t any that inspire people.

The performance hype is ridiculous. Open Signal reports latency is similar to 4G. Verizon claims 30 ms. 1 ms latency is a fantasy outside the lab. Low-band speeds are often slower than 4G, especially at lower frequencies. See Finally, Data: US 5G slower than Canada’s 4G. Believe it

Analysis Branch figures are higher than almost all subscriber estimates in the West

In December 2019, I put out a 210 million estimate for the end of 2020. Xiaomi dropped the 5G price to US$285, a demand driver. China officially set a plan for 150 million, which was forcefully echoed by the three telcos. Although most estimates for 2020 were ~ 1oo million, my research suggested the Chinese would deliver.

Chinese telcos, among the largest in the world, have consistently made their numbers for the last decade. 300 million were connected to fiber to the home in about four years. Minister Miao Wei last spring said, “Accelerate!” The carriers have delivered.

Company leaders no longer go to jail for missing quotas, but MIIT can and often has fired any executives who come up short. The $100 billion (sales) $14 billion (profits) China Mobile could increase marketing and phone subsidies enough to reach 150 million. It’s on track already.

5G is selling far above almost all predictions except mine because the phone price in China is little more than 4G. Decent phones go for US$199-260 in China, with prices falling there and everywhere else. Tens of millions of people have decided to pay the small premium for a phone that won’t be obsolete as soon. I would.

About the data

I have only indirect data on most of the world. If you want to be accurate, please think of the range of 83 million to 92 million rather than the 84 million headline figure.

I’m including a figure of 4 million 5G routers and pucks. Unfortunately, I can find no primary data. The 4 million is a guess. I have not tried to divide them by country. Data extremely welcome.

An analyst firm put out a 63 million figure for Q1, almost certainly a mistake but frequently repeated. The highest plausible estimate of 5G phone sales in 2019 and the first quarter of 2020 is 45 million and it is probably a lower than that. (Strategy Analytics reports 24 million for Q1 2020)

I’ve urged them to put out a correction and am not naming them here.

“I make many mistakes,” the Butler said. I’m sure I have some, although I’ve done a great deal of research, daveb@dslprime.com I’ll issue a correction ASAP.

Country details:

China: ~65 million.
China’s telcos are reporting ~115 million “5G contracts” but an authoritative government source (CAICT) reports only 64 million 5G phones shipped. Since 4G and 5G contracts are the same price, I assume the telcos are persuading many 4G customers to sign up for a “5G contract.” China doesn’t need to overstate the numbers; even the lower figure is three times as many as the rest of the world.
Over 410,000 base stations have been upgraded and 15,000 more are being done each week. China Mobile expects a total of 600,000 5G cells yearend, covering about 700,000,000 people. All is mid-band.
17 million 5G phones shipped in June, many selling for US$230-260. 30-gigabyte service costs $13-18/month. China is on track to easily meet the 150 million year-end target. Counterpoint reports 60% of 5G phones in June were Huawei, which has shipped over 20 million 5G phones in China and probably over 30 million worldwide.
Unofficial sources claim July is far ahead of June.

Korea: ~7.35 million
All are mid-band, mostly 100-400 Mbps down. Open Signal data implies the indoor coverage is terrible. See 5G #fail. 85% no 5G in “90% covered” Korea

U.S.A. 4-5million.
US 5G coverage is awful, so I was surprised when Strategy Analytics reported Samsung sold over 3 million expensive 5G phones in Q1. Most probably were sold by Verizon, despite Verizon customers only connecting to 5G 0.4% of the time. I infer that high-end Samsung buyers are spending more for a phone that will not be obsolete in a year or 2. CEO Hans Vestberg has said people are buying 5G phones even where Verizon does not have 5G coverage.
So far, almost all AT&T & T-Mobile has been the ridiculous “low-band 5G,” actually slower than much 4G. See Finally, Data: US 5G slower than Canada’s 4G. Believe it The companies are making it nearly impossible to separate the 5G at 4G speeds” from other 5G. I will exclude them if I can. Any reporter or analyst who doesn’t try to make the distinction should point out that much “5G” is slower than much “4G.”

Europe ?2 million
No European carrier has enough 5G customers to release a figure. I infer from that and the limited availability that there are few actual subscribers. More data welcome.

Gulf ? 1 million
The UAE, Qatar, and Saudi Arabia have some of the most extensive deployments of 5G. There is little or no public data on the number of subscribers. Ooredoo Qatar reports 200,000 subscriptions Q2.

Japan ? 0.3 million
3 carriers are deploying. NTT DOCOMO reports 150,000 subscription Q2 and 90,000 more in July. It is shooting for 2.5 million early next year.
Rakuten, the first telco in the world to build a completely virtual system, is not yet ready to turn on 5G. When it does, expect major changes. It has already covered a quarter of the population and expects to reach 70% early next year. See Rakuten virtualized 4G now covers quarter of Japan. It is half as expensive as NTT and will be a fierce competitor. 2021 totals for Japan look to be 10-12 million.

South and Southeast Asia ?0.3 million
Viettel and almost all the Southeast Asian countries are just starting to deploy. Jio in India is ready to move rapidly when the government approves. Look for very rapid growth in India in 2022 and possibly earlier. The projections of 18 million in 2024 are far too low.

Australia ?0.2 million
Lots of pr, little data

Latin America ?0.1 million
Almost all talk so far.

Africa ? 0.1 million
MTN in South Africa has recently deployed mid-band, but few subscribers so far.

Canada ? 0.1 million
Just getting started

Russia, most of Latin America, and almost all of Africa have little more than pr.

Total: About 80 million phones Q2 and perhaps 4 million fixed home systems.

Sources and accuracy

China’s government CAICT is the source for the phone sales figure. It reports phones shipped so I have to adjust for units in transit and dealer inventory. The Chinese carriers are reporting about 115 million “5G contracts” but only about 70 million 5G phones have shipped in China.

Korea’s 3 telcos provided figures in their quarterly financials.

The U.S. estimate is based on Strategy Analytics estimate of 5G phone sales plus a small number from 2019. M Science reports about 1 million fewer sales. The companies say nothing.

Few other companies have reported subscriber numbers, from which I infer they have very few. The 4 million figure for Rest of World is highly uncertain.

I have found no figures for the number of homes connected by 5G routers. My 4 million estimate is also highly uncertain.

The most widely reported figures — not ours — for Q1 almost certainly are 40-50% too high.

For estimates of year-end 2020 and through 2025, https://analysisbranch.com/2020/06/19/5g-the-facts-and-the-future/

Analysis Branch and our reporting date back to 1999, when Dave Burstein started covering broadband from its very beginnings. Since then, we’ve had the chance to learn from hundreds of the best industry and academic leaders. Jennie Bourne and Dave have written two books, been quoted by the WSJ, NY Times, & Washington Post, spoken at Columbia University, chaired 8 conferences, and traveled the world looking for news.

Contact Dave Burstein 347-603-6442 (New York) Deadlines understood. Ask for background, short quotes, sources or whatever you need.

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.

Continue reading

Early data on coverage

Few companies outside of China and Korea have released data. Here’s what I have for now. This will fill in.

CountryCompanyCoverage (M)Coverage %Radio countSubscribers (M)
KoreaAll3570%?80,0003.8
ChinaChina Mobile4040,0004
ChinaChina Telecom60, shared30,0003
ChinaChina Unicom60, shared30,0003
USVerizon
USSprint165%
UKBT/EE
SwitzerlandSwisscom90% yearend 2019

10M China 5G Users: Everything is Changed – see update

One week after the official launch, CM, CT, and CU have 10,000,000 5G users. 150,000,000 is a plausible estimate for 2020. 5G is here.

** Important update: Actually, the initial 10M were reservations, not users. The government figure is only 3M phones shipped in October. It appears the supply of phones will catch up quickly, but that’s unproven. **

People want to buy, undoubtedly true in the rest of the world as well. Huawei’s Weibo Mall is selling thousands of phones every minute. We need another month of data for certainty, but it looks likely China will reach 100M by summer 2020.

The phone price, mostly US$515 to $700, is $30-100 more than similar 4G phones. The difference in manufacturing cost is $30-45.

4G phones in China will be obsolete in a year or two. Most phones at $400 & above will be 5G. More expensive phones like Huawei’s top models are also selling rapidly. At these prices, you’d be foolish not to buy 5G phones if you purchasing a mid or high-end phone.

What did the Chinese telcos do?

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