It's early, with minuscule deployments except in Korea, China, and the U.S. (next month.) Nothing's proven, but these conclusions look likely.

Works well: Government orders (China,) Gov "guides" (Korea,) Competition moves (Korea, U.S.)

Probably doesn't: Moderate changes in external costs (Small cells made easier, duct access.) Reductions in spectrum fees. (Most to shareholders, not investment,) Minimally useful spectrum (24 GHz.) Details:

Orders. With the approval of the Politburo, Minister Miao Wei directed the three telcos to build 5G at a ferocious rate. 100,000-200,000 cells in 2019; millions soon after. 25 ms Edge Network to 90%. Political power like that has an obvious downside. 

Guidance. Korea in two months has 500,000 5G users and >50% of the country covered. Coverage should be 90% by the end of 2019. Telcos are 100% privately owned. It's a capitalist country with a democratic opposition. The companies could have resisted, as Telstra did in Australia. The Chinese government has far more control than the Korean one.

Competition. Verizon CEOs Lowell McAdam and Hans Vestberg are true believers that millimetre wave 5G would give them an enormous competitive advantage. In 2017, I reported it had decided to spend US$20 billion. Since April 1, 2019, it works, according to multiple journalists' tests*. The months before were extremely disappointing.
AT&T & T-Mobile are now moving fast, albeit with the ~70% slower mid-band. In Korea, once one of the telcos decided to build rapidly, the other two decided they had no choice but to follow. KT on the latest financial call said they would have to raise capex; they couldn't afford to fall behind.
My conclusion: Consumers want 5G even if it has no practical advantage beyond bragging rights. If one carrier can be persuaded to build rapidly, the others will likely follow.

What probably won't work very well

Many recommendations lower costs but have only a modest impact on deployment.

Telco lobbyists in Washington are paid millions. Comcast's David Cohen was paid US$18 million one year. The advocates are very, very good at convincing regulators that 2+2=5.

As I came to know FCC Commissioners like Michael Powell I discovered they were honourable, smart, and worked hard to serve the public interest as they understood it. Many of Powell's decisions were so favourable to the telcos many assumed he was corrupt. Wrong.

Powell was chosen partly because his "small government" beliefs corresponded to the powers in the new administration. The lobbyists plastered Washington with opinions that reinforced their goals. Six of the eight speakers at one "non-partisan" university event were or had been telco lobbyists. Very few have the technical or practical knowledge to resist what appears as a massive consensus.

With only a few months of field data, I'm not certain of the following. I'm writing this because too many people around the world are being swayed by company advocates. I include the data and logic that lead me to tentative conclusions. Disagreements welcome.

Moderate changes in external costs. My experience is that major technical change and strong competition are the primary drivers of capital spending. Some decisions depend on the marginal cost, but generally, only a very large difference in deployment costs make much difference. Evidence: Crown Castle, a tower company doing half the small cells in the U.S., told Wall Street the U.S. reduction in fees did not result in increased deployment. 

Reduction in spectrum fees. This depends on whether the reduction is used on increased investment or for other corporate purposes. It makes more funds available, but in almost all cases only a small portion goes to increased investment. A discount on spectrum, like a subsidy, is essentially a negative tax. Economists have been looking at the "Incidence of a tax" for a century. There's no reason to expect it to be invested. 

Investors have been demanding capex reductions because of a short term emphasis. A windfall in the form of a spectrum bargain is not likely to build more networks.

Trump's tax cut is saving Verizon US$billions but Hans Vestberg isn't raising capex in three years. DT, one of the most vocal demanding cheap spectrum, has told investors its capex in Europe will be flat for three years at US$5 billion. 

Minimally useful spectrum.  Don't misinterpret; putting spectrum to use is a good thing. But the 24 GHz auction is unlikely to produce much more 5G in the next four or five years. Building out 24 GHz will be very expensive. No base stations are ready to support it. Few phones ever will. Verizon, AT&T, and Sprint all assert they have more than enough spectrum for years. Massive MIMO and carrier aggregation will satisfy likely demand well into the next decade.

Spectrum, even if free, has not produced a new network in the U.S. or Canada in the last decade. The Broadband Plan in 2010 projected that more spectrum would bring in new entrants. It failed. The cost of building out a new network and persuading customers to switch is so high even free spectrum wouldn't work here.

Dish Networks has been hoarding enough spectrum for a major network across the U.S. for a decade but not building it.

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Put another way, "incentives" are likely a giveaway unless there is a solid reason to expect the build to happen.  Any responsible reporter, when pitched policy "incentives," must ask "How much will go to the goal of more broadband, faster deployment of 5G, or whatever is the intent? The followup should be "What evidence do you have that much will be spent?

If the proponents don't have solid answers, the policy is likely a mistake.

 

dave ask

@davescomm

Details on all 5G phones, as prices drop to $285 ** All actual 5G networks worldwide ** Facebook ordered to repost Italian fascist page. ** Apple China sales down 35%** Qorvo sees 300M 5G 2020 & 750M 2023 mmWave <10%

** Bharti demands India Gov more than double prices and enforce cartel. Sunil Mittal "Situation is dire. It is a matter of survival for everyone." ** Wi-Fi 6 meets ITU 5G criteria @stephenjcrowley ** Samsung $8B for Chinese memory plants ** Morgan paying billions for Altice fiber

Dec 10 Sprint bringing $300-500 5G phones to US 2020. Nokia, Lenovo, HMD ** H., Apple, and AMD doing 5 nm test runs on TSMC's 5 nm. Early results are 15-30% better than 7 nm ** AT&T low-band 5G built to >65% US. Speeds slower than 4G at launch. ** 

Verizon CEO Ronan Dunne: >1/2 VZ 5G "will approximate to a good 4G service" Midband in "low hundreds" Mbps ** CFO John Stephens says AT&T is going to cut capex soon. ** Huawei in 16 days sold 1,000,000 5G Mate 20s.  

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Welcome  Asia is installing hundreds of thousands of 5G radios and adding 5G subs by the tens of millions. The west is far behind. 200,000,000 in 2020

The demand is there, and most of the technology works. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

I'm Dave Burstein, Editor. I've been reporting telecom since 1999. I love to hear from readers, especially when you find an error. daveb@dslprime.com

Also see

analysisbranch.com,

fastnet.news

huaweireport.com