2020-2021: Networks Doing Fine in the Time of Corona

Amazingly, there have been close to zero reports of additional traffic causing important problems for people at home. The networks are successfully handling 20-50% traffic increases while still staying fast enough for almost all practical purposes. Traffic has now plateaued and speeds improving weekly.

Median landline download speeds in 90% of U.S. cities were within 20% of norm. The majority of cities tested over 40 Mbps on downloads. Virtually all connections were fast enough for three 4 Mbps HD streams except on DSL links that already had problems and should have been upgraded years ago.

Wireless traffic was actually down in some places and rarely increased by more than 20%. Many people at home used Wi-Fi instead of cellular, leaving wireless data networks in good shape. 4G & 5G wireless technology has improved enormously in the last few years. Verizon’s cost to carry a bit has dropped ~40% annually. Speeds are now often 50-150 Mbps down.

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Start Here: The Economy is Worse Than Almost Anyone Believes

China phone sales 2019-2020

2008-2009, the worst economic crisis in almost a century, saw a fall of US GDP of ~4%. This time will almost certain be worse, with many predicting a drop of ~10%. That’s uncertain, but a severe drop has already occured and 2021 also looks weak.

Any analysis, including my work on 5G and telecom, has to begin with that assumption. Car sales are down 25% or more; hotels and airlines will continue half empty or worse; the major banks are looking at over $100 billion in immediate bad debt. No magic will repair the economy, even if health improves.

Despite the news, most of us believe things will start to “return to normal.” An “optimism bias” is part of human nature, particularly strong when surrounded by negative news. The 20% increase in stock prices appears a symptom of over-confidence.*

Some inferences for telecom

To my surprise, it appears 5G in 2020 will be only modestly affected.

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Coronavirus Matters – But Numbers are Uncertain

The best epidemiologists are not sure when the pandemic will be controlled. That makes it impossible to provide an accurate estimate of the effect on telecom and 5G.

If production gets back to normal by the end of Feb, the natural drop in 5G subs will be 10-15 million. I’ve reduced my “surprise-free” 2020 projection from 210 million to 195 million because of corona and the slowdown in December in Korea. I have too little data to be confident.

China has a large economic stimulus planned. If 5G is included, the lost ground could be recovered. World leadership in 5G is important in China and it may choose to get back on track.

If production limits extend past February, the impact will likely be large. Supply chains could break and the world could go into recession. The slowdown in 5G – and much else – could be severe.