Nokia President and CEO Rajeev Suri expects 5G network deployments to be a major growth driver for the network equipment and services company. In prepared remarks he said:
“For 2019 and 2020, we expect market conditions to improve markedly, driven by full-scale rollouts of 5G networks. As those roll-outs occur, Nokia is remarkably well-positioned. Unlike previous generations of technology, 5G requires a coordinated, holistic approach across all network elements, far beyond radio. That requirement plays to the strength of our end-to-end portfolio and our 5G Future X architecture.”
Investments necessary to take advantage of this growth opportunity will hit the bottom line in 2018, but this is expected to be temporary:
“As a result of the acceleration of investment in 5G due to the opportunity provided by the accelerated time frame of 5G deployments, Nokia’s operating margin will come under some pressure in 2018. That investment, combined with continued strong execution of our strategy to expand to new vertical segments, build a stand-alone software business, and maximize the value of our licensing business, will allow us to target improved results in 2020. Therefore, the Board is committed to propose a growing dividend, including for 2018.”
“We’re getting a good sense of what 5G is going to be like. It is clear the demand is there on the basis of capacity increase,” as well as from the B2B environment where industrial, utility and transportation companies are asking operators to give them 5G capability from a capacity and latency perspective.
Of course, we look at it differently from another peer or some other peers because we have an end-to-end portfolio. This really is a reinvention of the network as we know it,” he said. “Our operators, if they go end-to-end with us, will get the benefit of a lower TCO, so total cost of ownership, [and] a higher throughput at the network level, not just at the radio level but at the network level.”
Nokia this week announced its new ReefShark chipsets, which incorporate Nokia Bell Labs artificial intelligence (AI) technology as well as Nokia’s capabilities in antenna development for mobile devices and base stations. Nokia says the ReefShark chipsets significantly improve the performance of antennas, resulting in halving the size of massive MIMO antennas and reducing power consumption in baseband units by 64% compared to today’s units.
Suri also talked about Nokia’s expertise in network slicing, which he said would be a key component of 5G.
“There will be thousands and thousands” of network slicing, perhaps millions in the future, he said, and “our operators will be able to tap into the demand” of an SLA-based business where they can give slices to a group of clinics or hospitals, for example, including regionally and globally. “We would be able to slice the network at the network level,” he said, adding that somebody else who doesn’t have an end-to-end portfolio would only be able to do that at the core network of the radio, and that’s not good enough.
While Nokia’s results for 2018 are unlikely to impress, the company sees brighter skies ahead in 2019 and 2020 based on demand for 5G network technology. Nokia expects a dramatic improvement in profitability in 2020.
We remain skeptical, because we believe the pace of 5G rollouts won’t accelerate until the ITU-R WP5D IMT2020 standards are completed at year end 2020. 3GPP’s New Radio (NR) is one of several RIT proposals to be submitted for consideration later this year and in early 2019.
Separately, Australian teleco Optus said will begin the rollout of its “5G” network early next year for ‘key metro areas’, as recent tests with network partner Huawei have attained 2Gbps speeds using commercial customer devices.
Optus MD of Networks Dennis Wong explained that Optus can now “increase momentum” on 5G due to 3GPP approval of “5G” New Radio specs last December: “Throughout 2018, Optus is going to lead the Australian market in the development and deployment of pre-5G and 5G technologies,” he said.
Finally, Qualcomm and a handful of Chinese smartphone manufacturers are working together on a new initiative aimed at introducing 5G endpoint devices as early as next year. The initiative will support China’s smartphone industry and seeks to introduce commercial devices that comply with 3GPP New Radio specifications as soon as 2019, Qulacomm said.
“Qualcomm Technologies has close relationships within China’s mobile and semiconductor ecosystem, and we’ll continue to work with this ecosystem to drive innovation as we move from the 3G/4G era to the 5G era,” said Qualcomm president Cristiano Amon.
A recent survey conducted by Qualcomm shows that Chinese mobile users are showing unprecedented interest in 5G, with 60% of Chinese consumers are likely to purchase 5G smartphones when available.
Qualcomm announced its “5G Pioneer” initiative at the 2018 Qualcomm China Tech Day in Beijing last month. At that time, Qualcomm executives were joined by representatives from six Chinese smartphone makers – Lenovo, Oppo, vivo, Xiaomi, ZTE and Wingtech.
Through the “5G Pioneer” Initiative, in addition to deep expertise and leadership in semiconductor solutions, Qualcomm Technologies anticipates being able to provide Chinese manufacturers with the platform they need to develop premium tier and global 5G commercial devices. Qualcomm Technologies, together with leading Chinese manufacturers, is not only exploring new mobile applications and experiences enabled by 5G, but also focusing on other transformative technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT) to continue to drive technological evolution and industry transformation worldwide.
“5G will bring massive new opportunities to the mobile industry, and we are excited to work with these manufacturers on this 5G Pioneer Initiative,” said Cristiano Amon, president, Qualcomm Incorporated. “Qualcomm Technologies has close relationships within China’s mobile and semiconductor ecosystem, and we’ll continue to work with this ecosystem to drive innovation as we move from the 3G/4G era to the 5G era.”
China was picked to lead global 5G adoption by 2023. According to CCS Insight’s 5G forecast, 5G connections will reach 1 billion worldwide in mid-2023, and China will account for more than half of all 5G subscribers as early as 2022. Meanwhile, China has many leading 3G/4G smartphone makers. According to Counterpoint Research, in 2017, seven of the top ten global 3G/4G smartphone manufacturers were from China.
In a separate announcement, Qualcomm signed a MoU with Lenovo, OPPO, vivo and Xiaomi for multi-year purchases of RF front end silicon worth $2 billion.
Qualcomm said its RF front end modules will support China’s current mobile ecosystem and also address the rapidly expanding complexity and challenges of (true) 4G-LTE Advanced and “5G” networks.
Verizon, KT and Samsung have teamed up such that the CEO’s of the two telcos could have a secret video call with each other during the Superbowl.
- Verizon set up a temporary (and secret) 5G network at Super Bowl LII.
- Using the 5G network, guests were able to watch high-resolution streams of instant replays.
- Meanwhile, in New York City, engineers were able to view a stereoscopic 180-degree video of the game in nearly real time.
The video call was yet another pre standard “5G” demonstration taking place between Minneapolis, MN and Seoul, Korea. The trio have also stated, quite illogically, that such a grounded use case is an indication of how close the reality of 5G actually is.
“The fact that 5G is no longer a dream owes its debt to the collaborations we have carried out with operators like Verizon and vendors like Samsung,” said Hong-beom Jeon, Head of Infra laboratory at KT. “Our efforts have enabled some of the most demanding tasks to come to fruition.”
“Seeing Samsung’s 5G end-to-end solutions in action, including a working prototype 5G tablet, underscores how important our collaborative relationship has been in helping accelerate the availability of commercial 5G mobility for customers,” said Ed Chan, Senior Vice President and Chief Technology Architect, Verizon.
“As we say at Verizon, ‘we don’t wait for the future, we build it.’ We are glad to be working with like-minded partners to build the 5G future globally.”
Looking at the nitty gritty side, Samsung supplied the network Infrastructure composed of 28GHz 5G access units, 5G home routers(CPEs), virtualized RAN, virtualized core network and prototype 5G devices. The trio claim the exercise successfully demonstrated how to bring one of the smallest 5G radio base stations and 5G home routers (CPEs) to market.
As well as allowing the two telco CEOs to whisper sweet nothings across thousands of miles with no threat of buffering or losing sync between video and audio, Samsung also took the opportunity to showcase a new 5G tablet. The Samsung tablet is capable of running on multi-gigabit per second speeds via 5G networks, as well as the latest 4G LTE network speeds.
Sanyogita Shamsunder, the Executive Director of 5G Ecosystems and Innovation at Verizon, said, “This latest demonstration at Super Bowl LII and in New York City is another example of how we’re pushing 5G to exploit never-before-imagined uses cases and applications.”
This is not the first time Verizon has used football to demonstrate the power of 5G. A few days earlier, two football players in virtual reality headsets were able to pass a football and complete plays without ever physically looking at each other. The 5G network their helmets were connected to was so fast that the milliseconds of latency didn’t affect their ability to interact in nearly real time.
There’s currently an arms race going on between the four major telecommunications companies in the United States, for which will be the first to roll out a commercial 5G network. What does this show of 5G power say about Big Red’s stakes in the race?
Sprint will increase its network capital expenditure by at least $1 billion for the coming year as promised on Friday morning’s earnings call. The #4 U.S. wireless carrier plans to deliver mobile 5G in the first half of 2019.
–>That’s 1 year before the IMT 2020 standards will be completed!
Sprint Corp talked about its mobile 5G plans: “We’re working with Qualcomm [and others] in order to deliver the first truly mobile 5G network in the US in the first half of 2019,” CEO Marcello Claure said on the call.
Mr Claure said that Sprint will be able to deploy mobile 5G nationwide on 2.5GHz band in 100MHz channels. “We have the spectrum to lead on 5G, and basically lead in a different way,” he noted. Claure said later in the question and answer session that Sprint had a commitment from a “leading Korean” device vendor that it will have a 5G device ready within its 2019 timeframe.
This implies an increase in capital expenditure spending for Sprint’s network for fiscal 2018, new CFO Michel Combes said. Sprint’s total capex spending for fiscal 2017 will be in the $3.5-$4 range. Capex will hit $5-$6 billion in fiscal 2018, which starts in April 2018.
Sprint will spend to increase the number macro cell sites by 20%, and support its 2.5GHz, 1900MHz, and 850MHz bands on nearly all of its existing macro sites. Currently, around half of its macro sites have tri-band support.
The CEO added that Sprint plans to deploy more than 40,000 outdoor small cells, and “more than 1 million Magic Boxes,” the wireless small cells that it uses to improve in-home coverage.
In the field, Sprint expects to update sites with multiple-antenna array hardware, or “Massive MIMO” in 2018. “Massive MIMO will serve as Sprint’s bridge to 5G,” Claure said. (See Sprint Says No to mmWave, Yes to Mobile 5G.)
This is because the MIMO hardware can be updated to 5G NR standard over-the-air, the CEO said.
Our strategy is predicated on creating on amazing customer-experience, offering customers the best products and services, while delivering superior financial results. First, we recognize that to be a truly great company we have to have a great product, which for us is our network. While our network is much improved, we believe our next-gen network will truly differentiate Sprint over the next couple of years, due to our strong spectrum assets that enables Sprint to be the leader in the true mobile 5G.
This is the biggest network capital program in many years. And I will share more details of our network strategy in a few moments. I cannot wait to, once and for all, be able to sell the product that is best in the industry with competitive coverage, the fastest speed and the highest capacity.
Second, we will continue to deliver the most compelling value proposition to our customers across all of our segments. We will continue to play from a position of strength by leveraging our spectrum holdings and continue to lead with the best-only net offering in the market. Data usage strength are projected to grow exponentially, especially with 5G.
By having the most spectrum, combined with new technology that massively increases our capacity, we’re certain that we’ll be best position for to support unlimited data in the future.
Third, we will continue to drive a smart distribution strategy, with over 1,000 new stores open year-to-date across our Sprint and Boost brand, and several hundred several hundred throughout next year. We have designed a dynamic distribution model that allows to continuously optimize the right balance of physical and distribution – and digital distribution.
Sprint will also leverage its partnerships with Altice and Cox Communications Inc. to expand its backhaul capabilities for LTE-Advanced and 5G. Sprint CTO John Saw chimed in briefly on the call to say that some of the capex spend could be on “dark fiber” for backhaul needs.
Against this backdrop, Claure said there would be continuing job cuts at Sprint, including at the executive level, aiming for “a leaner and more agile company across our non-customer-facing workforce.” Sprint has cut thousands of jobs during the past couple of years.
True to his reputation as a “turnaround specialist,” new CFO Michel Combes said he is looking at more ways to “decrease cost structures” at Sprint. He promised to reveal more details in the March quarter. (See Sprint Appoints Ex-AlcaLu Boss Combes as CFO.)
For the quarter, Sprint reported revenue of $8.24 billion, down from $8.55 billion a year ago. Net income for the quarter was $7.16 billion (or $1.76 per share) thanks almost entirely to tax reform gains of about $7.1 billion, compared with a net loss of $479 million a year ago.