With 2 million Koreans connected to 5G, we now have data. We have first reports from the U.S. and Europe to show how the technology works. China is going to take off in September and soon connect millions. Time to get real.
The big news: Customers are swarming. Korea is adding over 500,000 a month. In Korea and the United States, people are buying 5G phones even where they can’t get 5G. Who wants to buy a phone that will be obsolete in a year or two?
Phone prices are plummeting. Oppo offers a 5G high-end phone for US$580 in China. ZTE is at US$700. Huawei’s Mate 20 5G is only US$30 than the 4G version. The margins are better than 30% and prices like this will soon appear elsewhere. US$300 phones are due in 2020.
Companies are building faster than planned. In the U.S., Korea, and China, once one company got serious, the others felt they had no choice but to follow. I expect Germany and England will similarly accelerate by the end of the year.
Costs are much less than some predicted. When Verizon cut capex in 2018 while building 5G, I predicted 5G would not seriously raise capital costs. Since then, AT&T and Orange have predicted a capex drop and Deutsche Telekom promises flat capex.
Everyone in telecom is now rethinking 5G strategies. I - and many others - have revised up our estimates. If I'm right about the effect of a price drop, that will lead to very heavy sales in 2020 and 2021.
5G speeds in Korea averaged less than 200 Mbps down. The higher numbers you see - sometimes a gigabit - are all outdoors and generally in favourable locations. 70-80% of connections are indoors. Except for a very limited amount of millimetre wave, my prediction that most 5G would be 100-400 Mbps down seems on target.
The fastest 5G networks in the world are Verizon mmWave (outdoors) and Qatar. Almost all the others should be similar to Korea, averaging 150-300 Mbps.
Latency is 25-35 milliseconds. That’s confirmed by tests in the U.S., U.K., and Korea of the time from the phone to the server and back. 1 millisecond always was a fantasy. DT has started installing an Edge network that could cut that in half. China will build an Edge network to over a billion people. I thought that would be mostly ~ 2022 or so, but Milan Milankovich of Speedtest.net tells me he is seeing some 12 ms readings from China already.
Spectrum is almost entirely mid-band from 2500 MHz to 3800 MHz. 21 of the 23 active deployments are exclusively mid-band. Verizon’s millimetre wave is about three times as fast, but no other carrier is likely to do much mmWave before 2021-2024. Sprint has shown that 2500 MHz is the most productive band. In many areas, it has enough reach no new cells will be needed. Millimetre wave reach has been disappointing, usually less than 200 metres.
No major new applications have been seen. In 5G - The first three years - December 2018, my analysis was that new applications would only have a modest effect for four or five years. Fixed wireless will be important (in the right locations.) 1/5th of the U.S. - over 20 million homes - likely to have fixed wireless by 2024. Sunrise in Switzerland, Hutchinson/Three in the U.K., and even Deutsche Telekom in rural areas, are promoting fixed.
Streaming AR & VR are likely to grow over 2-4 years, but that’s not guaranteed. Massive video surveillance with facial recognition is growing rapidly, but how much of that goes to the telcos is unclear. Almost all IoT and the other use cases for 5G work well in 4G.
Germany, the U.S., and the U.K. have set aside spectrum for private and regional networks. Nokia, Deutsche Telekom, Swisscom, and Telia already have programs to support private networks. Bosch and many others also want those contracts. These will grow very slowly for at least 2 or 3 years.
Pricing is unclear. Verizon and British Telecom are looking for a small premium. Vodafone U.K. and T-Mobile U.S. are holding to 4G prices. The Chinese are predicting lower prices, perhaps not initially.
The level of misinformation and lies is greater than anything I’ve seen since 1999. Some of the above will surely be incorrect but it is all solidly researched.