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Hedge fund billionaire Paulson backing Chicago AT&T competitor Layer3

chiraq Drahi's Altice also is financing Layer3. They are offering a 4K set top with up to three terabytes, apparently designed to connect wirelessly to a simple network interface device. That avoids needing to wire in the home, which Fran Shammo says is often the largest cost in a Fios connection. They are about to launch in a Chicago neighborhood and are also hiring installers in Alexandria, Virginia.

Cable tech legend Dave Fellows and partner Jeff Binder have raised $100M, hoping that Comcast, Verizon, and AT&T have loads of unhappy customers who will switch. Paulson is a gambler who made $4B betting that triple-A rated mortgage bonds would default in 2008.

Verizon earnings didn't cover the dividend

Takeaways: The strike contributed but fundamental problems remain. They have been cutting capex since 2007 and they no longer have a major edge in quality. VZ is and will be a very profitable company, but maybe not worth $200B. Wireless data growth is way down (< 40%) as I've been forecasting for several years. 5G Highband will start rolling for fixed wireless in 2018, but probably slowly. It will not add to earnings until well into next decade. The CFO forecasts very slow revenue growth. McAdam thinks best quality, video and IoT growth, and large content revenue will solve these problems. I raise doubts.

3M fiber, 19M LTE June adds: China Mobile's broadband mensis mirabilis

China is now 1/3rd of the broadband Internet. Over 240M are now connected by fiber home. The 3M added by CM in June was more than the entire rest of the world. It surpassed the previously monthly record, 2.65M at CM in March. China Telecom added 590,000, China Unicom 250,000, and China Mobile 3,189,000, for a total net gain over 4M.

China Telecom's landline broadband total is 118M, Unicom 74M and Mobile 66M. Add about 20M for the smaller operators and the total is 278M. That's more than the EU 28 (166M) combined with the U.S. (103M). Nearly all are on fiber home or fiber/DSL. In two years, almost 100M have shifted from pure DSL to fiber.

LTE in China in July reached 600M LTE subscriptions.

China tower sharing: One network to rule them all

China Unicom tower 260 Saving money by combining all towers. Building one network is cheaper than building 2, 3, 4, or 7. Policy people around the world are re-discovering that basic fact. Competition is great where it works, but building duplicate networks is very expensive. The Chinese government has decided wireless towers and related backhaul are a natural monopoly and forced the three telcos to share.

Savings will range from 20% to 55%, according to the below filing by China Unicom. "Co-tenancy discount 1: a 20% discount if two companies share the use of the telecommunications towers and a 30% discount if three companies share the use of the towers. The first user will be entitled to an additional 5% discount. Co-tenancy discount 2: 40-55%."

The tower company intends to IPO next year,

100M subscribers for Reliance's $22B pan-India, very cheap LTE

Ambanis house Antilla Giving away three months of unlimited data to win customers. Samsung bundles Jio's offer and saw a jump in sales. ETTEL expects Apple and almost all others to do the same. Shruti Dhapola tested a LYF phone and found, "download speeds came in the range of 6Mbps to 10Mbps, which is way above what you get from other players now." (Indian speeds are low because the telcos, including Reliance, don't have enough spectrum. The auction will change that.)

Over 1.5M have already signed on, using a remarkable 26 gigabytes/month each. The official launch date may be August, taking advantage of Jio's support of the Indian Olympic team. The first announcement featured some of Bollywood's biggest stars.

Jio is confident they can handle 100M subscribers drawing 5 gig. They intend to get them. Most prices will be under $10,

AT&T fiber taking on other telcos

Windstream, Fairpoint watch out. T plans 3M lines of fiber to the premises (including G.fast) each of the next four years, expecting to get to 20-25% of their territory. Some of them will be "out of territory," including some of the ~2M homes they have reached with fiber already. I can't recall either AT&T (almost half the U.S.) or Verizon (about a quarter) expanding this way in the last decade.

AT&T, France Telecom, and Telefonica have discovered that fiber costs are down in favorable locations. Google Kansas City has proven fiber can be profitable, including pulling many customers from AT&T. Fiber in some places can be run for < $500/home; in others, the cost is $4,000-$5,000. It's a great business if you can cherry pick areas with low costs and weak competition.

That's exactly what AT&T is doing,

$45-$100 Decent LTE Phones from Reliance Jio

JIO LYF 45 Mukesh Ambani brings down the price to fill Reliance JIO's $25B network. The time has come for all but the very poor to have LTE phones with speeds in the megabits and higher. LTE is 2x-5x more efficient and costs much less per bit than 3G. The parts cost is only $5-15 more than 3G; the operator more than makes up for that with OPEX and spectrum savings. Ambani's $45 LTE phone has a quad-core processor, 4" screen, and performance that matches the iPhones that made people happy a few years ago, For $20 more, the screen is 4.5". 5" inch models are about $100. The $45 model - pictured above - has cameras with only 2 megapixels and other limits For not that much more you can get better specs. JIO is probably subsidizing a bit but other brands are not that much more expensive.

Carlos Slim told me three years ago that $50 smartphones will bring billions to the net. He was right. There are now about 3.5B smartphones, more than half belonging to people who weren't connected a few years ago. GSMA, usually accurate, projects 5.8B smartphones by 2020. India alone will have 400M-600M new netizens, more than the U.S. plus much of Europe.

I predict a very high percentage will be LTE.

99% of mobile will not be millimeter wave 5G in 2021: Analyst

" 99 not mmWave There is a high degree of uncertainty," Ovum's Mike Roberts correctly notes in his estimate, but his 24M projection is consistent with other datapoints. (My wild guess would be lower.) MU-MIMO and Massive MIMO - in sub 6 GHz frequencies - will almost certainly be more important into the next decade.

High frequency millimeter wave will be an important part of 5G many places one day and working on rules is sensible. The hype, from the U.S. FCC and the vendors, is so inaccurate it's almost funny.

The most aggressive promoters of millimeter wave - Verizon, NTT, Korea Telecom - have been clear: trials only until 2020-2024. VZ CFO Fran Shammo made a point of telling Wall Street that the actual deployment will be so small it won't affect capital spending for years. NTT CTO Seizo Onoe in 2015 said he expected his 5G deployments mostly will be below 6 GHz until 2022-2023 and confirmed that this year. Giant China Mobile just joined Qualcomm in a demonstration of 5G in sub-6GHz spectrum at Mobile World Congress. (Release below.)

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