Antilia TowerDecember added 12M data users to 344M with 700M 2G feature phones the next target.

Rishi Tejpal, new telecom lead at Economic Times, introduced some dramatic projections in his first article. Bharti, Jio, and Voda/Idea intend to introduce 4G smartphones at 500 rupees, less than $10 U.S. He estimates that would require subsidies of ~$30/phone. The result: over 200M Indians will switch to 4G with Internet connections. I believe $5B for customer acquisition is modest compared to the $10's of billions each of the companies is spending for robust networks. (Jio and the others will generally offer >15 megabit downloads by the end of this year. Their state of the art 5G networks are bringing cost per bit so low they can make money at prices the West think remain impossible.)

Depending on how you count 2G and 3G mobile connections, India either soon will have more Internet connections than the U.S. population of 326M or may have already done so. Soon, India will have twice as many people connected at broadband speeds as the U.S., mostly on wireless. A dynamic private sector led by Reliance Jio is complemented by the sensible public buildout to over 300,000 villages. Both are moving quickly.

India data 230Tejpal recently joined ET from Gartner, where he and other analysts were close to all the telcos. He's likely to be well informed of the company plans. Forecasts like this can never be guaranteed. Companies can change marketing plans in a few months. If Ambani told investors, for example, that "Jio believes a smartphone price of $20 makes more sense," the others would probably revise their plans as well.  Building large networks or developing technologies takes much longer, so 2-5 year projections often are accurate.

While the technologies available for the next year are predictable, the subsidy cost could change quickly if major vendors decide to be aggressive pursuing orders in the hundreds of millions. Spreadtrum has financial support from Intel and Unigroup, both large enough to take large losses if they want to expand market share. Foundry utilization in 2018 will be limited at the most advanced nodes (7 nm) but probably in ample supply for the older technologies needed here. Qualcomm is looking to take market share in RF front ends from Avago/Broadcom. Decent screens are in good supply. The manufacturers could change marketing plans quickly as well, although there's little evidence of that so far. 

With only three surviving large telcos in India, signaling is likely. I'm seeing that in the U.S. right now. Sprint and T-Mobile are currently signaling they believe prices should go up. AT&T and Verizon would be delighted to go along and Wall Street bid up the stocks expecting higher prices. This week, Craig Moffett looked at the actual prices and the competitive situation. He came to the conclusion price firmness was possible but wasn't clear in the data. 

Corporate decisions about pricing in these markets are an exercise in game theory, not competitive supply and demand. Despite a few Nobel prizes for game theory, the economics of imperfect competition is still challenging in practice. Most economists run from the problem. Policy advocates are worse; most make "simplifying assumptions" and their work becomes garbage in, garbage out.


The Indian telcos are crying poverty and demanding subsidies, just like Deutsche Telecom and so many others, A common opinion is "Considering the current financial health of telcos, where the cumulative debt is in excess of Rs 5 lakh crore, they need to be careful and can ill afford this additional burden of subsidies." 

My take is that companies with a market cap of > $70B don't need government and can afford this. Bharti's $26B market cap is actually up ~14% on the year.  Jeffries estimates Jio would be worth $47B if it went public. (Jio is part of Reliance Industries and Vodafone part of a worldwide company. The $65B is therefore an estimate.)

Would users or shareholders benefit from a government subsidy? That's the question you always have to ask, whether the purpose is bringing broadband to rural Scotland or bringing down the price of mobile phones in Nigeria. The Indian telcos want $billions in a country that is short of the capital it desires for growth. If the telcos got tax reductions, lower spectrum prices, or other programs, would most of the money go to more/better broadband or to profits. There's no reason to expect the companies to spend most of the funds for the consumer. 

Will Ambani have to sell Antilia Tower, his beautiful home in the photo, if he doesn't get government funds?



dave ask


Vivo is selling new the iQOO 5G premium quality phone for US$536.

Lei Jun Xiaomi "5G to have explosive growth starting from Q2 2020"5G to have explosive growth starting from Q2 2020" I say sooner

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.

Bharti in India has lost 45M customers who did not want to pay the minimum USS2/month. It's shutting down 3G to free some spectrum for 4G. It is cutting capex, dangerous when the 12 gigabytes/month of use continues to rise.

Huawei in 16 days sold 1,000,000 5G Mate 20s.  

China has over 50,000 upgraded base stations and may have more than 200,000 by yearend 2019. The growth is astonishing and about to accelerate. China will have more 5G than North America and Europe combined for several years.

5G phone prices are down to $580 in China from Oppo. Headed under $300 in 2020 and driving demand.

No one believed me when I wrote in May, 90% of Huawei U.S. purchases can be rapidly replaced and that Huawei would survive and thrive. Financial results are in, with 23% growth and increased phone sales. It is spending $17B on research in 2019, up > 10%. 

5G phones spotted from Sharp and Sony

NTT DOCOMO will begin "pre-commercial service Sept 20 with over 100 live bases. Officially, the commercial start is 2020.

 More newsfeed


Welcome  1,800,000 Koreans bought 5G in the first four months. The demand is there, and most of the technology works. 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 3X 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.