With 2 million Koreans connected to 5G, we now have data. We have first reports from the U.S. and Europe to show how the technology works. China is going to take off in September and soon connect millions. Time to get real.
The big news: Customers are swarming. Korea is adding over 500,000 a month. In Korea and the United States, people are buying 5G phones even where they can’t get 5G. Who wants to buy a phone that will be obsolete in a year or two?
Phone prices are plummeting. Oppo offers a 5G high-end phone for US$580 in China. ZTE is at US$700. Huawei’s Mate 20 5G is only US$30 than the 4G version. The margins are better than 30% and prices like this will soon appear elsewhere. US$300 phones are due in 2020.
Companies are building faster than planned. In the U.S., Korea, and China, once one company got serious, the others felt they had no choice but to follow. I expect Germany and England will similarly accelerate by the end of the year.
Costs are much less than some predicted. When Verizon cut capex in 2018 while building 5G, I predicted 5G would not seriously raise capital costs. Since then, AT&T and Orange have predicted a capex drop and Deutsche Telekom promises flat capex.
Everyone in telecom is now rethinking 5G strategies. I - and many others - have revised up our estimates. If I'm right about the effect of a price drop, that will lead to very heavy sales in 2020 and 2021.
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