China Unicom Yunnan outsource 230China's third largest carrier, Unicom, has brought in other private companies to manage a network with about the same population as Spain. The company reports outstanding results. (Below) While many companies, especially in India, will contract out building and even running the networks, this appears to be going even further.

Unicom itself is now an experiment in how to connect State-owned companies with private ones. The government persuaded Internet giants Alibaba & Tencent to each buy about 10% of the company and work actively with CU management.  Rumors that CU would be merged into China Telecom have not proven true. The company has been struggling.  

Initial Contract-out Reform of Yunnan Branch Showed Brilliant Results

⚫ Delegated management of the access network assets, network deployment & maintenance, overall business dealing to privately-owned operating companies, in compliance with the applicable laws & regulations

⚫ Contracted out operation with profit target set

 

⚫ >90% of the Company’s employees migrated to the operating companies

⚫ Stock ownership to key staff to better align staff & operating company’s interests

⚫ 4G network construction sped up with private capital

⚫ Accelerated business growth with higher staff motivation

⚫ Enhanced operating efficiency with refined cost management

China Unicom Yunnan outsource 650

 

dave askOn Oct 1, Verizon turned on the first $20B 5G mmWave network with extraordinary hopes. The actual results the first four months have been dismal. Good engineers tell me that will change. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 4X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.

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5G Why Verizon thinks differently and what to do about it is a new report I wrote for STL Partners and their clients.

STL Partners, a British consulting outfit I respect, commissioned me to ask why. That report is now out. If you're a client, download it here. If not, and corporate priced research is interesting to you, ask me to introduce you to one of the principals.

It was fascinating work because the answers aren't obvious. Lowell McAdam's company is spending $20B to cover 30M+ homes in the first stage. The progress in low & mid-band, both "4G" and "5G," has been remarkable. In most territories, millimetre wave will not be necessary to meet expected demand.