Calix' Mighty Marketwise Magic

Michael Weening, to my amazement, has delivered for Calix's modestly sized customers a marketing program with the sophistication I would expect from a giant company. In some ways, the Calix suite is even better than Verizon's.

Michael introduced Calix's Revenue Edge in a perfectly timed presentation that reminded me of Steve Jobs. The only thing missing was the sweater. For every key point, he brought on stage a client who was able to confirm the results.

Calix's program emphasizes extraordinary service for each customer, including a new Wi-Fi 6e router with effective cloud management.

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I Ordered Dish/Boost Free 5G Phone: 35 Gigs $25/month 12 months

The price is so low 70% of the phones selling today in the US, Japan, England, and of course China are 5G. 5G still does nothing important, but the price is so close it's is taking over the market. I just gave in. 

Dish is de facto giving one away. The new Celero is 6.5", has 3 rear cameras, a 4,000 mAh battery with 15W fast charging,  and the SD card slot the iPhone doesn't include.

I prepaid $279 for a year's service at $23/month,

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Jio/Radisys, Bharti/Tata, Nokia, NEC, Samsung look to O-RAN dominance

DC has a fantasy a few small companies with US connections - Mavenir, Altiostar, JMA - will dominate O-RAN. All have done good engineering work just to make O-RAN work. They made great progress on very small budgets. 

But O-RAN is a high priority for some very large companies with major strategic advantages. The problems with O-RAN are extreme and will require major investment to solve. Tareq Amin, CTO of Rakuten in Japan, has the only O-RAN system in serious production. He had to spend "hundreds of millions" designing dedicated chips and still is having performance problems.

Samsung and Nokia are now deeply committed to O-RAN. More O-RAN contracts are going to the big vendors. Samsung is the primary supplier for the Vodafone contract, probably the largest in Europe. NEC is supplying 5G Massive MIMO radio units to Vodafone, Deutsche Telekom, and Rakuten. It will provide system integration to the telcos buying the Rakuten systems, 

Samsung spends $19 billion per year on research. Nokia spends over $4 billion. Tata, a software giant, spends over $3 billion. Mavenir spent $89 million on R&D in 2020, down from the prior year.

India likely will deploy more O-RAN than the US and Europe combined over the next few years. The Western carriers mostly see O-RAN as reaching volume in 2025-2029. The Indians, deploying 5G mostly as a new network, will go much faster.

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Frozen Wireless: 14% 2020 Traffic Growth

In 2020, U.S.wireless traffic grew only 14% by far the lowest rate at least in a decade. Growth in 2019 was only 30%. Traffic growth worldwide has been falling for years. 40% and 50% growth rates are now long gone.

Technology continues to advance rapidly, especially MIMO and Massive MIMO. Verizon and AT&T estimate a 40% annual improvement in capacity. The gap between what they can deliver and what they can sell is getting much wider.

Demand for new cells also plummeted. Only 22,000 were added in 2020, less than half the number in 2019. Nearly all were small cells. Very few towers are going up. Crown Castle, with the most small cells, just cut its 2021 plans from 10,000 to 5,000. 

I've asked CTIA if they will share 2021 data. My guess is that demand is better because people get out more. But there's little data.

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Telefonica Germany/Tele Columbus huge cable sharing deal

Dr Daniel Ritz, CEO of German cableco Tele Columbus, believes in "non-discriminatory opening of our networks" and "open access." It's made a deal for Telefonica to sell capacity on its cable and fiber networks. Telefonica 

Backed by a half-billion investment by Morgan Stanley, Ritz intends to expand including FTTH. It has a natural edge-out possibility, with possible assistance from government money.

Competition has mostly failed in broadband except where network sharing is common. French prices are half the prices in the US, because network sharing (unbundling) has resulted in 4 competitors. Time Warner Cable proved two decades ago it's practical to share cable networks. I subscribed to Earthlink over Time Warner Cable, possible because of a condition in the AOL-Time Warner merger.

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"Take a number and wait." US at limits in building broadband

Fiber builders were maxed out early in 2020 and then AT&T decided to pass 12 million more homes with fiber over four years. The FCC RDOF program adds millions more. The headline comment is from one of the largest construction companies in U.S. telecom. 

I believe the skill and parts shortage means it's stupid to spend more than $2-3 billion on broadband infrastructure in 2022 and little more in 2023. Growth after that is possible but would require effective manpower training and organization building.

Industry experience is employees become most efficient after 18-24 months. Building an organization that can efficiently manage fiber construction took 3 and 4 years at Verizon and British Telecom. I spoke with Burlington Telecom, a city-owned fiber service. It had gone broke, leaving the city with a $30 million bill to cover. I spoke with them about four years after they began construction. They told me, "Now, we are ready to do the job."

Jonathan Adelstein, now head of the Wireless Infrastructure Association, oversaw billions in spending as head of the Rural Utilities Service. He writes me

To get broadband built out quickly, you need three ingredients that are in short supply right now: equipment, like yellow trucks for construction – materials, like fiber – and manpower, especially skilled labor that knows how to deploy broadband infrastructure. You need all three in place at once to get networks built.

Right now is bad timing on all three, which means this could take longer than policymaker hope and more delays than rural America needs.

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Data confirms "digital redlining" of rural black south

DC pols and uninformed reporters claim the U.S. has a major problem of broadband "unserved." Actually, the best available figure is that all but 5% were covered in 2019, At least half of the remainder are funded for fiber under RDOF. There aren't many "unserved" to reach and the White House is lying about the extent of the problem. 

But a study by Dominique Harrison of the Joint Center convinced me to look closely at select areas. She estimated that 26% of those in the Black Rural South have no decent connection choices.  

37% of rural homes in Arkansas were unserved (25/3) in 2019, per the FCC. So were 35% of Louisiana rural homes and 27% of Alabama. Non-Sothern rural areas were 91% covered.

The numbers confirm that digital redlining is a reality.

5G Base stations $13,000 in China

Most carriers don't order 200,000 5G base stations so will pay more, but that's the actual price for the joint procurement of China Telecom and China Unicom. The 200,000-300,000 cells the two jointly are upgrading are probably more than the entire rest of the world will add. The second Chinese network, jointly built by China Mobile and China Broadcast, is growing even faster. 

Huawei and ZTE will probably split 90% of the order, with Ericsson, Nokia, and perhaps CICT/Datang getting the rest. Ericsson was so worried they'd lose their share - traditionally 10% - that CEO Börje Ekholm actually threatened to move out of Sweden is the country blocked Huawei. (He didn't.)

The price of state-of-the-art commercial base stations is now so low the new Open RAN companies will find it hard to survive. Altiostar (owned by the Japanese) and Mavenir (de facto controlled by Koch) are charging much more because they don't have the volume. Some fantasists in DC think O-RAN will result in US lead in 5G. But Indian giants (Jio-Radisys & Bharti-Tata) will soon be much larger. Ericsson, Samsung, and especially Nokia are opening up.

Since the first 5G equipment hit the market in 2019, it's been clear to the industry that 5G would be similar in cost to 4G. Except for the US midband, 5G networks are being built without a rise in capex. (The analysts and reporters still saying otherwise should find another line of work.)