AT&T, Verizon, & most big carriers want the vendor flexibility of software-defined networking, NFV, & open source. Nokia's strategy is to sell everything "end-to-end." In a stunning financial call, Ravi Suri slapped in the face many of his largest customers, 13 times calling for end-to-end. He makes the argument that a single vendor taking care of everything will have better results. That's not unreasonable, but almost the whole industry is going in the opposite direction.

Suri is remarkably candid about how this lets him squeeze customers on price. 

"Our end-to-end portfolio shows its power here, as well, as we are able to ask for offsets for any concessions that we make."

While AT&T's John Donovan is telling investors  he wants the opposite

"More than 55% of our network functions were virtualized at the end of 2017, and we're well on our way to meet or exceed our goal of 75% virtualized by 2020. These and other cost management initiatives have helped drive 13 straight quarters of cost reductions in our technology and infrastructure group."

T-Mobile's $3.5B deal with Nokia implies CTO Neville Ray doesn't share that goal.

Monica Alleven noted in 2016, "T-Mobile mostly mum on SDN/NFV activities." Neville went on to tell Sue Marek, "Modern Core Makes SDN Less Urgent." Ray is right SDN/NFV is over-hyped, but results are real. Vendor lock-in can be very dangerous.

Randall Stephenson was at AT&T when Nokia's predecessor Alcatel thought they could charge an extra $B on U-Verse, claiming AT&T had ordered changes. AT&T countered that the extra work was included in the original deal and the system didn't work without it. U-Verse was two years late and Alcatel was nearly cut out of many $billions in future contract. 

Second sources are a good idea.

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.