Black Swan poster 230Cable wireless will be "humongous," in the U.S. a cable VP tells me. The cable buildout appears inevitable. I see evidence of that at every wireless event. One possible roadblock: wireless incumbents offering cable an almost unbelievably cheap deal is a rational business move.

The marginal cost of bits on wireless is falling 40%/year and is already very low. If cable is coming in anyway, a telco like Sprint or AT&T could offer a resale deal not far above the cost of cable building their own networks. No one at the telcos has suggested this would happen, but the possibility belongs in the analysis. 

The cablecos are moving already. I see Charter ads in the New York subway. C & C are offering attractive deals to their existing customers, the majority of the population. Both are reselling Verizon service for now and moderating their growth while they build systems.

#4, Altice is working very closely with Sprint. The two jointly plan future network investments.

Charter is leading the testing of the shared 3.5 GHz band. John Chapman at Cisco and Jennifer Andreoli-Fang at CableLabs have developed DOCSIS pipelining, which can bring latency to 10 ms and potentially much lower. The cost of a network of small cells will be relatively modest because cablecos have power and backhaul at nodes close to most U.S. homes.  

Jumping into wireless makes business sense as well. Broadband is still growing but it's close to saturation. Everyone is losing conventional video customers and the alternatives bring in much less money.  While their near-monopoly of a service most people must have allows them to increase prices, Roberts of Comcast and Rutledge of Charter fear regulators will jump in if they take full advantage. Adding wireless is the obvious way to meet Wall Street's demand for growth. 

U.S. wireless pricing is almost cartel-like, twice as high as peers like France. T-Mobile is aggressively attacking and winning customers, but actually keeping prices close to AT&T. Sprint this month raised prices. Since John Legere took over T-Mobile, he has been challenging the cartel with many features and occasional obscenities. Looking at price trends, the change is only modest. U.S. prices are far higher than if we had strong competition. 

The cable guys believe nothing will stop their network deployment of 4G/5G. But they stop and think when I suggest this alternate scenario. It's certainly a possibility.

Black swans happen, although the odds are long against. 

dave ask

Newsfeed

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 US#2/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 6 days sold 300,000 5G Mate 20s. Delivery begins on 8/16. 

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

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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.