DOCOMO vs ATT Verizon

2017's biggest announcement - unless China does similar. NTT Docomo CEO Kazuhiro Yoshizawa plans to go "nationwide" by 2023, per the generally reliable Nikkei Asia ReviewThe estimate is that the three Japanese telcos (DOCOMO, KDDI, Softbank) will spend a total of ~$45B, some of it on shared infrastructure, The story has been picked up by more than a dozen publications but that's about the only details we have. (If DOCOMO is spending half of the $5G, that's about $200/person servable.)

DOCOMO has been dropping hints for several months. I'm hoping for a detailed announcement either at the June 20th shareholders meeting or the next quarterly conference call. Nikkei has a May 22 comment from Yoshiwara "We will lead the world with our 5G technology."

 DOCOMO has begun promoting strategies for 2020 & beyond with several mentions of 5G. 

CTO Seizo Onoe in April told me the progress in mmWave has been outstanding; he now expects mmWave mobile to be widely deployed starting in 2020. He believes the costs will be quite reasonable, probably less than 4G. (The company is not projecting a capex increase while deploying more rapidly than anyone else.)  

Six months ago, I think Ted Rappaport may have been the only expert predicting deployments so rapidly. Onoe himself a year ago predicted very little mmWave before 2022-2023. He changed his mind as new data came in. There are over 10,000 engineers working on 5G and things are coming very fast.

One reason DOCOMO can move quickly is they have about 5 times as many cells as the U.S. carriers, adjusted for population. The DOCOMO 161,900 cells are from their latest financial presentation. The AT&T and VZ 50-70,000 counts are also from financials. (Since I made that chart, AT&T has presented a 70,000 figure.) The U.S. cell density is among the lowest; 50-80% less than Spain, Japan, and China Mobile. 

The whisper in the hall is that DOCOMO expects the 5G to win customers away from parent company NTT's landline business.  With speeds in the hundreds of megabits and sometimes a gigabit, that's a real possibility. 

Now, Verizon, and Japanese, and perhaps China Mobile are going as fast as they can.

dave askOn Oct 1, Verizon will turn on the first $20B 5G mmWave network, soon offering a gigabit or close to 30M homes. The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while keeping capex at around 15%.

The Koreans, Chinese, and almost all Europeans are not doing mmWave in favor of mid-band "5G," with 4G-like performance. Massive MIMO in either 4G or "5G" can increase capacity 4X to 10X, including putting 2.3 GHz to 4.2 GHz to use. Cisco & others see traffic growth slowing to 30%/year or less. Verizon sees cost/bit dropping 40% per year. I infer overcapacity almost everywhere.  

The predicted massive small cell builds are a pipe dream for vendors for at least five years. Verizon expects to reach a quarter of the U.S. without adding additional small cells. 

In the works: Enrique Blanco and Telefonica's possible mmWave disruption of Germany; Believe it or don't: 5G is cheap because 65% of most cities can be covered by upgrading existing cells; Verizon is ripping out and replacing 200,000 pieces of gear expecting to save half. 

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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, millimeter wave will not be necessary to meet expected demand.

McAdam sees a little further. mmWave has 3-4X the capacity of low and mid-band. He sees an enormous marketing advantage: unlimited services, even less congestion, reputation as the best network. Verizon testing found mmWave rate/reach was twice what had been estimated. All prior cost estimates need revision.

My take: even if mmWave doesn't fit in your current budget, telcos should expand trials and training to be ready as things change. The new cost estimates may be low enough to change your mind.