This is for discussion only and not actively linked. Ideas very welcome. I'm working on the book Building Gigabit Networks and will be posting sections looking for comments.

Verizon is spending $20B on mmWave, which has ~ 3X the capacity of anything else. CEO Vestberg believes the greater capacity will allow them to leave competitors in the dust. All of Europe, as well as China, are choosing mid-band 5G. Mid-band, including 3.5 GHz, has 70-90% less capacity. That's enough to easily meet likely demand well into next decade, most believe. Telcos are betting US$billions, sometimes tens of billions, they are making the right choice.

My take is that Verizon will get an excellent return on the investment. They have no landlines in 80% of the United States where they have more than 75 million mobile customers. The picture is less clear where an incumbent covers the entire country, almost all the rest of the world. 

Wireless technology is improving at a ferocious rate. WIthout raising capital spending, telcos can increase capacity six times or more in the next few years - without millimeter wave. (below) Meanwhile, demand growth is slowing down. Cisco predicts it will fall to 30% per year in the U.S. in 2021. CTIA - the telcos' organization in D.C. - reported growth was only 11% in 2017. That's so low I'm sure it is an artifact, but the trend is clear worldwide.

Six-fold capacity improvements are enough to cover 30% growth rates well into the 2020's at most carriers. If so, who would buy the additional capacity of mmWave? Bruno Jacobfeuerborn's questions about the business case are another way of asking, "Who will buy?" 

Vestberg hasn't provided any details about where he sees the demand coming from. He's one of the best in the business, so maybe he sees something we've all been missing. 

In addition, the extra speed/capacity of millimeter wave may prove an extraordinarily effective marketing tool. Customers are buying landline gigabit service even though there are very, very few practical uses for more than 100 megabits or so. If you offer a true gigabit over mmWave, you will clearly be the best in almost any market. It's likely that will be a powerful customer magnet.

The lifetime value of a mobile customer is in the thousands; even modest additional sales will be enough to cover the additional cost of the better network. Verizon's entire business strategy is to be perceived as "The best network in the U.S.," allowing them to charge a premium. The network advantage has almost disappeared the last few years. T-Mobile is faster in many cities. Even our worst network, Sprint, is good enough for most people.

Verizon's world first and largest millimeter wave network in the world will not just be perceived as better, it objectively will be better. The others could argue, accurately, that the difference doesn't matter. That's almost always has been a losing battle. 

"The best network" strategy may pull one network ahead of the pack. What will happen if a challenger network, like Free in France, clearly has a better network than the incumbent? I haven't spoken to Xavier lately, but I'm sure he is thinking of it. Leapfrogging to mmWave may be a very effective move for Telefonica in England and Germany as well as many others.

Verizon is telling the world the cost of mmWave is much less than most people believe. They've done more testing than anyone else and are often getting a gigabit 600 metres. That brings the cost down significantly. It also has a strategy of first upgrading the existing 60,000 cells to full 5G. That should prove much cheaper than first building a small cell network. The extra capacity will be enough in high demand locations to decommission some towers. (The illustration from Verizon shows fewer cells with 5G. That won't be true in less dense locations, where more cells are needed for coverage.) 

Will Voda or Free or ? grab the market with mmWave. There's no way to know, but it's clearly possible. Upgrading a network takes years, including training thousands of employees. In networks, it's impossible to be a "fast follower." I believe it is almost certainly prudent for every mobile carrier to at least heavily trial mmWave, build systems, and educate staff. 

Being ready to deploy rapidly is cheap insurance against a competitor's move, even if it's not right to deploy mmWave in volume today. 

(This is a first look to get the discussion going. There are no easy answers. Let's talk some more.) 

Technologies changing everything

My belief that a six to ten-fold (or higher) capacity improvement is possible developed chairing Marconi Society seminars with Paulraj, Samueli, Cerf, & Rappaport. I've since discussed it with respected engineers inside the giant telcos who can't speak on the record. Lee Hicks of Verizon indirectly confirmed this estimate when he told an Adtran event his costs had been falling 40% per year and he hoped to continue at 40% going forward. The engineers all know this; the policy people often don't and make some very bad decisions.

Massive MIMO, whether in 4G or the very similar 5G midband, directly produces a two to seven times improvement. MM opens up the 3.4-4.2 GHz band, previously impractical to use. Lightly used spectrum in the "mid-band" will allow an additional 100 MHz to each carrier, doubling available spectrum. Carriers are also adopting more complicated coding method (256 QAM) that adds as much as a third to existing systems. 

Companies like Verizon and AT&T are only using ~50% of the spectrum they own today, confirmed by their CFOs. As four and five carrier aggregation reaches the market, this spectrum can be put to use. Carrier aggregation allows also using the Wi-Fi spectrum, LAA. T-Mobile is delivering 500 megabits in Manhattan with LTE/LAA.  

Small cells are a relatively inexpensive way to add capacity just where it's needed. Small cells have been held back by interference problems; CTO Ibrahim Gedeon of Telus told me late in 2016 that was solved. Since then, especially in 2018 in North America, small cell deployments are taking off. Tower company Crown Castle has 40,000 already built and tens of thousands more in the pipeline. 

dave ask

Newsfeed

The 3.3-4.2 spectrum should be shared, not exclusively used by one company, concludes an important U.S. Defense Innovation Board report. If more wireless broadband is important, sharing is of course right because shared networks can yield far more

It does work! Verizon's mmWave tests over a gigabit in the real world. 
The $669 OnePlus 7 Pro outclasses the best Apples and probably the new Galaxy 10 or Huawei P30 Pro. Optical zoom, three cameras, liquid cooling, Qualcomm 855 and more.
Korea at 400,000 5G May 15. Chinese "pre-commercial" signing customers, 60,000-120,000 base stations in 2019, million+ remarkable soon. 
5G phones Huawei Mate 20, Samsung Galaxy 10, ZTE Nubia, LG V50, and OPPO are all on sale at China Unicom. All cost US$1,000 to 1,500 before subsidy. Xiaomi promises US$600.
Natural monopoly? Vodafone & Telecom Italia to share 5G, invite all other companies to join.
Huawei predicts 5G phones for US$200 in 2021, $300 even earlier
NY Times says "5G is dangerous" is a Russian plot. Really.
Althiostar raised US$114 million for a virtual RAN system in the cloud. Rakuten, Japan's new #4, is using it and invested.
Ireland is proposing a US$3 billion subsidy for rural fibre that will be much too expensive. Politics.
Telefonica Brazil has 9M FTTH homes passed and will add 6M more within two years. Adjusted for population, that's more than the U.S. The CEO publicly urged other carriers to raise prices together.
CableLabs and Cisco have developed Low Latency XHaul (LLX) with 5-15 ms latency for 5G backhaul,  U.S. cable is soon to come in very strong in wireless. Details 
Korea Telecom won 100,000 5G customers in the first month. SK & LG added 150,000 more. KT has 37,500 cells. planning 90% of the country by yearend. 
The Chinese giants expect 60,000 to 90,000 5G cells by the end of 2019.
China Telecom's Yang Xin warns, "Real large-scale deployment of operators' edge computing may be after 2021." Customers are hard to find.
Reliance Jio registered 97.5% 4G availability across India in Open Signal testing. Best in world.

More newsfeed

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Welcome On Oct 1, 2019 Verizon turned on the first $20B 5G mmWave network with extraordinary hopes. The actual early results 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 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.