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December 2021 update: Verizon 4G 1.45 gigabits! Who needs 5G?

Dont Believe the Hype 230 December 2021 Since 2017, every telecom reporter on the planet has written about "Gigabit LTE," a theoretical peak that is more often 150-350 Mbps down. 5G NR adds very little. The gain in theory could be 15-50%, but in practice 5G in frequencies below 2100 MHz is often slower than 4G. The apparent improvements, from 4G 50-150 Mbps download to 5G 100-450 Mbps are because of more spectrum (mid-band) and more MIMO antennas. Both are 4G tech shipping since 2017.

The high-performing new radios are mid-band Massive MIMO that work almost as well in 4G as in 5G.

2021 Update Verizon, NTT, AT&T: ?$200-$400 5G Costs Much Lower Than Expected (2)

Vestberg and wife marathon Update December 2021: Vestberg was dead wrong about a $200-400/cost per home passed for mmWave. The word from Verizon in 2017 was to expect 600 meter reach for mmWave. Testing by Earl Lum found Verizon built to a 200 meter radius. The economics of mmWave deteriorated because the capability was massively overestimated.

On the other hand, mid-band Massive MIMO is proving incredibly productive and surprisingly cheap. It produces more bandwidth than carriers can sell at most locations. Net result: worldwide capex roughly flat 2018-2024, serious over-capacity.

Hans Vestberg of Verizon is passing 30M homes without raising capex.

NTT DOCOMO's very respected CTO Seizo Inoe in 2016 called high costs of 5G "a myth" in presentations at the Brooklyn 5G Summit and an IEEE conference in Kuala Lampur. He pointed out that LTE was cheaper than 3G and that much of the 5G would use existing towers and backhaul.

Vestberg, former Ericsson CEO now running Verizon's network, sees mmWave costing $200-400/home passed as they deploy to a quarter of the U.S. (Obviously, some other areas will be more expensive.) He just told a CITI investor conference 5G is

"Massively, massively cheaper than having a fiber all the way to the home to have sort of a beam in the air going to the home."

Verizon has previously said their costs to pass a home with fiber were $700 in 2007 and went down from there, presumably to $400-600. AT&T has confirmed similar as they deploy 15M lines of fiber home. I'm inferring that "massively, massively cheaper" would be $200-$400.

Calix' Mighty Marketwise Magic

Michael results 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.

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,

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.

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.

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.

"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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