Jedi Xavier Returns After Orange Empire Strikes Back

Xavi is riding to the rescue after Free lost 19,000 broadband subscribers in Q1, an almost inconceivable result after 16 years of success. He's bringing back some of the original team, including legendary engineer Rani Assaf. They have work to do: opening Italy & Ireland, transitioning from 4G to ?, and dealing with invigorated competitors. Even Bouygues seems to be coming back. 

Orange/France Telecom now has a better network and is promoting aggressively. FT offers fiber to 9.6M homes, Free only to 6.8M.  FT has 97% 4G coverage, Free only 88%. The stock price has seriously fallen while Xavi invested in 400 startups, built the school 42, and created Station F, the world's largest startup incubator.

One of the first things Niel intends to do is to rev up the fiber build. He expects to add 2M servable homes by the end of this year and enable 20M - 80% of the country - by 2022. The business strategy will be to sell hard in the fiber areas, looking to add 500,000 or more each year.

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ZTE Freedom Will Cost $5-10B. Cheap!

Update: May 13: Trump blinked. He tweeted, "Too many jobs in China lost,. Commerce Department has been instructed to get it done!" Previous: The maximum cost to keep the company going for two years would be about $10B if they didn't sell a single product. With some fast engineering work and smart management, survival would cost less than $5B. 

The money will be found and the company almost certainly saved. 80% to 90% of ZTE's requirements can be immediately sourced in Asia. DC now needs to cut the U.S. losses. Apple stock lost $60B when Trump declared war. China's response will include developing national alternatives for any product that is dependent on a U.S. supplier. They also will go for the international market.

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T-Mobile Watch: Chances Falling As Errors Reported, Missing Time Machine

May 3 John Legere took a dangerous gamble basing his campaign for T-Mobile-Sprint on a falsehood, that the deal would deliver much faster 5G, sooner, and that would produce $billions in social gains. I immediately knew his claims were bogus. 

The deal had a 50-50 chance on Monday but is plummeting as FCC & DOJ get woke. This is the summary; six articles from the last few days are linked in the text and below.

A smoking gun: From Bell Labs with LTE & 5G the same 

The New York Times may have killed the merger with “The Implausible Promises of a T-Mobile-Sprint Merger.” Maybe the lethal blow came at the BK 5G Conference last Wednesday,I found low-band “5G” is little better than 4G LTE, apples to apples. Former FCC Chair Wheeler used the 25% estimate. 

The only way the new T-Mobile could bring 5G sooner is to build it in 2017. That would be difficult.

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Goldman Sachs Puts $750M Into Brit Fiber

Goldman & Antin just bought CityFibre for $750M, a rich price. Fiber is back, bigtime. Pension funds and others want long term investments they believe will have a regular return. CityFibre has a deal with Vodafone to build fiber to 1M homes. (Below) With the new investors, CityFibre plans 5M homes. They expect costs under $1,000/home. probably well under.

Enel Open Fibre in Italy just collected $3.5B towards an $8B plan. AT&T has added $1B to raise the 2018 fiber build to 4M. Telefonica is over 15M homes passed, about 75% of Spain. Orange is not far behind in France & Spain. Iliad/Free is now up to 6M in France after a very slow start. Liberty Global is doing millions of lines. Bell Canada, Telus, and even Telefonica Brazil are doing millions more.

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Kuoppamaki of T-Mobile: NR Will Yield A (Modest) Performance Improvement

Karri Kuoppamaki of T-Mobile startled me with the answer, “My vendors tell me NR will be 25% to 50% faster than LTE.” A second source, with similar information, expects about 20%. Neither have much actual test data, and vendor salesmen are often over-optimistic. But even 20% is more than my previous reporting and I need a correction if that proves out.

Eric Xu, current Huawei Chairman, recently said consumers would find no “material difference between 4G & 5G.” That remains true. Peak speeds will be similar and total capacity only matters if the cell is near to congestion, surprisingly rare. Even then, is a fall from 300 megabits to 200 megabits meaningful to the consumer?

A 25% improvement is not a new generation.

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Danger, Will Robinson! The Best on Wall Street Often Get It wrong

Charter fell 12% on April 27th, despite a buy rating from one of the very best on Wall Street. He had a sell on Sprint, which went up 8%. If the best in the business can be so wrong, should you be picking stocks? The average of all hedge funds many years does worse than the S & P. You literally would have done better with a flight of darts.

I'm leaving out the name because the guy really is good. Sooner or later it happens to everyone. This just happened to be particularly dramatic.

Knowledge is worth a great deal on Wall Street, I discovered, when I started DSL Prime in 1999. Several on the street made me their pet geek because I was in broadband, suddenly very hot. I got all the reports, could exchange ideas with almost everyone, and went to events where the waiters had better suits than I owned.

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Trillion Dollars ($1,000,000,000,000) Says China Must Never Be Dependant On Foreign Core Technologies

“It is the compelling obligation for big companies to compete in core technology,” insists Jack Ma of Alibaba, market cap $451B, at the first Digital China Summit in Fuzhou. $457B Tencent chairman Pony Ma said "it is urgent for Chinese enterprises to make breakthroughs in the ownership of core technology." Baidu, probably world #2 in Artificial Intelligence, takes the market cap to $1T.

Xi Jinping sent a message to Fuzhou, calling for "Breakthroughs in core technologies." Chinese companies directly support policy and will come through here. Xi also called for, "promoting the upgrade of infrastructure." China Telecom responded by promising 2M 5G cells.

China has the talent and the funding.

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CEO: AT&T's Existential Crisis. I Disagree.

AT&T makes ~$20B/year, has $49B in cash, and claims $444B in assets. Few believe CEO Randall Stephenson's sworn statement it faces an "existential crisis." (NY Times) I know it's a genuine fear because I've heard similar from others at the top of AT&T. One friend wrote me, "I certainly hope the TW deal goes through. ...  Our world is changing and companies have to change as well."

AT&T, despite what the Times thinks, is not going to go out of existence. But profits certainly could fall from $20B to much less, clobbering the stock price

In 2016, Randall himself said that without enormous changes, "In three years we’ll be managing decline." AT&T is working on ~70,000 job cuts, the largest cutback anywhere in the world since Elisha Gray and Alexander Graham Bell invented the telephone.

I'm certain AT&T will be around in a decade and still an enormous company, despite Randall's doubt. But Randall, John Stankey, & John Donovan are running very, very scared. This is not just D.C. bluster put on to impress the judge.

Telecom is a (slightly) declining business. Randall thinks Google and Facebook will take T's profits unless he remakes the company in their image.

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