Counterpoint Research: Smartphone Market Decline Ends, What Might Help it Grow?

The global smartphone market showed signs of recovery ending a long period of continuous quarterly YoY declines. Shipments during 3Q 2019 were flat at 380 million units. The two markets that helped halt the slide are India, which has been growing steadily, and China, now showing a slower decline.

Both countries saw healthy channel builds, in India, OEMs prepared early for Diwali and online sales. In China, Huawei, Oppo and Vivo enjoyed healthy demand ahead of the National Day Golden Week holiday in October. The upcoming holiday season should drive smartphone demand into growth for the second half of the year.

Highlights:

  • Samsung continued its growth thanks to strong sales of the Galaxy Note 10 and Galaxy A series. The improved product-mix helped it post better profits.
  • Huawei grew a healthy 28.5% YoY globally. It captured a record 40% market share in China. It rebounded in Europe after the decline mid-year caused by the US trade ban. As it continues its aggressive push, there’s an increased need for careful inventory management in China and Europe in Q4 2019.
  • Apple iPhone shipments were down 4% YoY. However, initial uptake for the iPhone 11 series was robust. In the US, pre-orders and the first week of sales, saw more demand for the iPhone 11 Pro Max and iPhone 11 Pro, but the standard iPhone 11 rose quickly into the best-seller’s list.
  • Apple’s price corrections in China and elsewhere with iPhone 11 and iPhone XR stimulated demand during the last week of September.
  • Realme was the fastest-growing brand for the second successive quarter, capturing 7th place globally. Strong performances in India and Indonesia drove its growth.

Counterpoint believes the key OEMs with the largest installed bases, especially in developed regions, will rely on 5G as a key point of differentiation and will encourage their users to upgrade.  Already, 5G rollouts have been faster than 4G was in its first few months, with 15 commercially available 5G devices and many more lined-up for launch in the last few months of 2019. Nevertheless, 5G smartphones only accounted for 2% of shipments in Q3 2019 and will contribute relatively little to the overall market for the full year 2019. But, 2020 will likely be a breakout year for 5G smartphone adoption,rekindling smartphone demand.

Note: This author completely disagrees with that last conclusion.  We don’t think 5G smartphone adoption will achieve any real market traction till late 2021-early 2022.

Analyst Contacts:

Neil Shah | Peter Richardson

SOURCE Counterpoint Research

…………………………………………………………………………………….

Looking at the current scenario, Xiaomi, famous for its commitment to affordability, launched the cheapest 5G model in China at the end of September. The new flagship of Xiaomi’s number series, MI 9 Pro 5G, has a starting price of roughly US$520.

Exhibit 1: 5G enabled new models in 2019

5G Enabled New Models in 2019

According to the analysis of the 5G cost structure, we expect an addition of US$50 to implement the sub-6Ghz only by using a standalone 5G modem.

However, costs can be reduced through the integration of a modem with the SoC (System on a Chip). Huawei’s Kirin 990 and Samsung’s Exynos 980 had taken a step ahead in this direction, and Qualcomm is expected to launch its first 5G SoC in the Snapdragon 700 family by the end of 2019. Besides, both Qualcomm, MediaTek plans to mass-produce respective 5G flagship platform SDM865, MTK6885, in Q1 2020.

Exhibit 2: 5G platform timeline in 2019 & 2020

5G Platform Timeline in 2019 & 2020Given the fragmented frequency allocation, we expect smartphone brands targeting North America and parts of European markets will customize designs with an external 5G model for mmWave, even though, most 5G models will resort to a 5G SoC for a cheaper sub-6Ghz only solution.

To sum up, we believe that 5G smartphones will be available in the mid-end price bands over the course of 2020. As a result, cheaper solutions for a next-generation offering will unlock consumer demand for upgrades of their smartphones.

SK Telecom top winner at Global Telecoms Awards in London, UK

South Korean network operator SK Telecom’s early success in 5G helped it win three awards at the Global Telecoms Awards (GLOTEL Awards), held on November 7 in London, UK.  SK Telecom received awards in the categories of ‘5G Implementation Excellence,’ ‘Best Operator,’ and ‘BSS/OSS Transformation Excellence.’

SK Telecom was also highly commended in the consumer IoT and fixed network categories, bringing its awards total on the night to five. Other notable performers were Huawei, with two wins and a highly commended, and ZTE with one win and two highly commended.

With the aim to provide customers with the best 5G service quality, SK Telecom has deployed the fastest and widest 5G network in Korea, arming it with quantum cryptography technologies and an AI-based network management system named TANGO (T Advanced Next Generation OSS). Moreover, by combining its 5G with cutting-edge ICT, the company has introduced a wide range of powerful solutions including 5G-AI Machine Vision, 5G Live Golf Broadcast, AI Video Security and 5G-based Cooperative Intelligent Transportation System.

“I feel confident in saying that this was the strongest set of entries to the awards we’ve had yet,” said Telecoms.com Editor Scott Bicheno (pictured above with Chang-min Park of SK Telecom), who hosted the awards alongside comedian Miles Jupp and was also one of the judges. “Our judges had a really tough job choosing between so many great products, services and projects this year and for that I thank them. The fact that so many entries were highly commended shows how close the scoring was. My congratulations to the winners and thanks everyone who contributed to our best awards yet.”

…………………………………………………………………………………………………

Here’s the complete list of winners:

5G Implementation Excellence  

Winner – SK Telecom: World’s First 5G Commercialization

Advancing Artificial Intelligence               

Winner – Telefónica: Aura

Highly Commended – Nokia: AI as a Service for CMCC Hainan

Automation Initiative of the Year             

Winner – Huawei: AUTIN

Best 5G Innovation         

Winner – Vodafone Germany: Automotive Factory of the Future

Highly Commended – China Mobile, China Southern Power and Huawei: Smart Grid 5G Slice Operation and Monetization

Best Digital Transformation Project        

Winner – Infosys and Vodafone UK: Digital Platform

Highly Commended – Singtel: Unboxed

Best Operator    

Winner – SK Telecom

Highly Commended – Reliance Jio Infocomm

BSS/OSS Transformation Excellence        

Winner – SK Telecom: OSS Evolution for E2E integration and 5G Business

Connecting the Unconnected     

Winner – Ufinet: Rural connectivity case studies

Consumer IoT Initiative of the Year         

Winner – O2 and Accenture: Making UK homes smarter energy users

Highly Commended – SK Telecom: V2X Service Enabler (VSE)

Digital Transformation Innovation          

Winner – BT: The Digital Business Marketplace

Highly Commended – Netcracker: Digital Transformation Solution

Fixed Network Evolution             

Winner – Turkcell: Customer Oriented Failure Prioritization and Complaint Management

Highly Commended – SK Telecom: Giga Premium 10G Residential Broadband Internet Service

Ground-breaking Virtualization Initiative            

Winner – AT&T: Edge Solutions

Industrial IoT Initiative of the Year          

Winner – Dialog Axiata: Affordable and Purpose-built IoT Solutions for Industries in Emerging Markets

Highly Commended – ZTE:  ZTE NMVP Solution

Innovating in the Cloud 

Winner – MYCOM OSI: The Assurance Cloud

Managed Services Innovation of the Year            

Winner – Ericsson and Telenor: Common Delivery Center for innovative Managed Services model

Highly Commended – Saudi Telecom Company: STC Fixed Network Customer Operations Service transformation

Mobile Device Innovation           

Winner – Reliance Jio Infocomm: JioPhone

Mobile Money Mastery 

Winner – AsiaHawala and Comviva: AsiaHawala powered by mobiquity Money

Most Innovative Cloud Service  

Winner – Tata Communications Transformation Services: Cloud Networking and Security as a Service

Highly Commended – Red Hat: Red Hat open hybrid cloud technologies

Project Delivery Perfection         

Winner – ZTE: ZTE for China Mobile ‘He-Fetion’ Project

Highly Commended – X by Orange: X by Orange with Red Hat

Security Solution of the Year      

Winner – Mobileum Signalling Firewall

Highly Commended – CUJO AI: AI-powered cybersecurity technology

Telecoms Transformation            

Winner – Huawei: NFV-SDN based telco cloud technology initiative

Highly Commended – ZTE: 5G Slicing Wholesale Solution for New B2B2C Business Model

………………………………………………………………………………………..

About SK Telecom

SK Telecom is the largest mobile operator in Korea with nearly 50 percent of the market share. As the pioneer of all generations of mobile networks, the company has commercialized the fifth generation (5G) network on December 1, 2018 and announced the first 5G smartphone subscribers on April 3, 2019. With its world’s best 5G, SK Telecom is set to realize the Age of Hyper-Innovation by transforming the way customers work, live and play.

Building on its strength in mobile services, the company is also creating unprecedented value in diverse ICT-related markets including media, security and commerce.

For more information, please contact: skt_press@sk.com or sktelecom@bcw-global.com

…………………………………………………………………………………………

SK Telecom wins big at the 2019 Global Telecoms Awards

Visual Comparison of 3G, 4G, and 5G

Courtesy of Ashley Viens at Visual Capitalist

Summary:

Wireless technology has evolved rapidly since the turn of the century. From voice-only 2G capabilities and internet-enabled 3G, today’s ecosystem of wireless activity is founded on the reliable connection of 4G.

Fifth-generation wireless network technology, better known as 5G, is now being rolled out in major cities worldwide. By 2024, an estimated 1.5 billion mobile users?which account for 40% of current global activity?will be using 5G wireless networks.

Today’s chart highlights three generations of wireless technology in the 21st century, and the differences between 3G, 4G, and 5G networks.

5G: The Next Great Thing?

With over 5 billion mobile users worldwide, our world is growing more connected than ever.

Data from GSMA Intelligence shows how rapidly global traffic could grow across different networks:

  • 2018: 43% of mobile users on 4G
  • 2025: 59% of mobile users on 4G, 15% of mobile users on 5G

What Does This Mean For 4G?

4G isn’t going anywhere anytime soon. As 5G gradually rolls out, 4G and 5G networks will need to work together to support the wave of IoT devices entering the market. This network piggybacking also has the potential to expand global access to the internet in the future.

 

https://www.philstockworld.com/2019/11/01/visualizing-the-future-of-5g-comparing-3-generations-of-wireless-technology/

 

GSMA: 5G mmWave activities at WRC 19

The GSMA, which lobbies on behalf of the mobile industry, is bracing itself for a battle with Europe over the use of millimeter-wave (mmWave) spectrum for 5G services. The group is anticipating a potential clash at this week’s World Radiocommunication Conference (WRC 19) in Sharm el-Sheikh, Egypt over the use of mmWave, which some European authorities argue interferes with “space services” such as satellite-based weather-sensing.

Brett Tarnutzer, head of spectrum at the GSMA, wrote: “We are calling for Europe to join the US in taking a pro-5G stance at WRC-19 to protect its digital future. Some administrations are still determined to limit mobile use of airwaves that 5G requires to reach its full potential. This protectionist attitude will have consequences for our global economy if allowed to prevail.”

WRC-19 and Agenda Item 1.13 presents the opportunity to identify mmWave spectrum in the 26, 40, 50 and 66 GHz bands. By doing so, the conference can lay the essential foundation for a bright 5G future. These bands enable key capabilities of 5G such as ultra-high capacity and ultra-high speed services.

It is also important the bands come with reasonable conditions. Unfortunately, it is possible to identify a band for IMT on paper, but effectively render it unusable in practice. Where conditions are necessary to protect other services, they should be applied. Where conditions have been found by the technical studies to be unnecessary, it will be harmful to 5G deployment to impose them without reason.

On October 31 at WRC-19, GSMA welcomed delegates from Arab Spectrum Management Group (ASMG) to a lunchtime seminar to discuss Agenda Item 1.13 with a focus on mmWave spectrum for the future of 5G.

“The Arab Spectrum Management Group has already positioned itself as a 5G leader. And its full support for the identification of mmWave spectrum at WRC-19 will help it build on that momentum.” said GSMA Director General Mats Granryd.

Speakers from Nokia, TMG and the GSMA, and Director General Mats Granryd, talked about how the right conditions for mmWave spectrum at WRC-19 can change how connectivity drives the Arab region forward.

At the seminar, the GSMA also presented findings from its recently published report on mmWave Use Cases, and the impact they will have on all aspects of society. GSMA believes the performance benefits of mmWave, including ultra-high speeds and low latencies, will drive the revolutionary impact of the most advanced 5G services. Use cases such as expanded broadband access and advanced healthcare stand to profit greatly from access to mmWave spectrum.  [No mention was made of mmWave’s need for the line of sight, short distance/reach, or need for many small cells.]

The Middle East and North Africa are expected to deliver $15.4 billion in GDP from mmWave 5G by 2034. But economic impact, along with all the underlying use cases that make it possible, is only possible if mmWave spectrum is identified for IMT with reasonable conditions.

The mobile industry is asking for the IMT (ITU acronym for International Mobile Telecomunications) identification of:
• 26 GHz (24.25-27.5 GHz);
• 40 GHz (37-43.5 GHz);
• 50 GHz (45.5-52.6 GHz); and
• 66 GHz (66-71 GHz).

The presentation from the seminar is available here.  A few highlights follow:

Various applications and services require access to spectrum from low, mid, and high bands:

  1. High band: Extreme capacity, e.g. 2.3, 2.6, 3.3–4.2, 4.4-5 GHz etc.
    80-100 MHz MNO contiguous 2020 onwards
  2. Mid band: Both coverage & capacity, e.g. 24.25-29.5, 37-43.5 GHz etc
    800-1000 MHz MNO/Network contiguous 2020 onwards
  3. Low band: Extended coverage, e.g. 600, 700 MHz etc
    Up to 20 MHz channel bandwidth; 2020 onwards

5G is expected to contribute $2.2 trillion to global GDP (by 2034)

In a report written by TMG, 5G mmWave services are said to realize $565 billion in global GDP and $152 billion in tax revenue over a 15-year period, from 2020 to 2034. By the end of this period,That equals 25 per cent of the value created by 5G. The report also breaks down the impact on a regional level.

A second TMG report, looks at the impact of mmWave spectrum  on economies in Sub-Saharan Africa, South and South East Asia and the Pacific Islands, Latin America and the Caribbean, and the RCC region. It reveals how the benefits on mmWave 5G will be felt across industries and explores exciting new 5G use cases, including healthcare, industrial automation, education and connectivity.  None of these use cases will reach their full potential without access to mmWaves.

Case Studies (with illustrations): Extractive Industries, Connectivity, Smart transportation logistics hubs

……………………………………………………………………………………………………………………………………………………

References:

The GSMA WRC series – getting the most out of WRC-19

WRC-19: ASMG lunchtime seminar on mmWave spectrum for 5G

mmWave 5G success sets the stage for big benefits

5G mmWave: Facts and fictions you should definitely know

https://www.wsj.com/video/why-5g-is-fast-but-spotty-in-the-us/2A87AB60-8081-4CB6-BC23-395123650F19.html?mod=article_inline

 

China to launch 5G mobile networks on Friday with a huge government backed push

China’s  three major wireless carriers— China MobileChina Unicom , and China Telecom —will begin selling 5G services to consumers on Friday, November 1st in 50 major cities, including Beijing and Shanghai, said Chen Zhaoxiong, vice minister of the Ministry of Industry and Information Technology on Thursday October 31st at a Beijing conference. That will allow those with the few available 5G-China compatible smartphones to buy a subscription to access the network.  The Chinese telcos will charge by speed rather than data used. See the section on 5G Subscriber Pricing below.

A woman using her cellphone walks past a vehicle covered in a China Unicom 5G advertisement in Beijing on Sept. 17. Chinese phone carriers will begin offering 5G service Friday. (China Stringer Network/Reuters)

A woman using her cellphone walks past a vehicle covered in a China Unicom 5G advertisement in Beijing on Sept. 17. Chinese phone carriers will begin offering 5G service Friday. (China Stringer Network/Reuters)

……………………………………………………………………………………………………………………………………………………………………………………………………………………..

The Chinese government has made building 5G a national priority, clearing red tape and reducing costs so the three wireless providers introduce the new technology as swiftly as possible.  “They’ve made this a national priority. It’s part of the [Communist] Party‘s ability to show that it’s delivering the goods,” said Paul Triolo, head of geo-technology at the Eurasia Group consultancy. “And in the middle of the trade dispute and the actions against Huawei, it’s even more important for China to show that they are continuing to move forward despite all these challenges,” he added.

“This 5G technology is part of an overall, far-reaching revolution, and it will bring brand-new changes to the economic society,” China Telecom President Ke Ruiwen said at the launch Thursday.

China is forecast to spend between $130 billion and $217 billion on 5G between 2020 and 2025, according to a study by the state-run China Academy of Information and Communications Technology.

While some countries, such as South Korea, Australia and parts of the United States, have started 5G pilots, the Chinese government has embarked on a centrally planned push to roll out the technology on a commercial basis and give it an unassailable lead in the global race to install 5G wireless networks.

“The commercialization of 5G technology is a great measure of [President] Xi Jinping’s strategic aim of turning China into a cyber power, as well as an important milestone in China’s information communication industry development,” said Wang Xiaochu, president of China Unicom.

China President Xi has described the world as on the cusp of a fourth industrial revolution, one characterized by advances in information technology and artificial intelligence, analysts at Trivium China, a consultancy, wrote in a research note this week. “Xi wants to make sure that China is at the forefront of this new revolution — getting 5G up and running is a way to get a leg up in that race,” they said.

China’s central government wants 5G coverage extended to cover all of Beijing, Shanghai, Hangzhou and Guangzhou by the end of the year. The country’s largest carrier, China Mobile, which has 900 million cellphone subscribers, says it will be able to offer 5G services in more than 50 cities this year.  Chinese technology companies have been touting the industrial applications of 5G, such as managing cement production,  typhoon monitoring and  surgeries performed by robots.

“Two robots accurately planted 12 guide pins into the patients’ spines,” Beijing Daily reported after a surgeon manipulated robots performing operations in Shandong and Zhejiang provinces. “The signal transmission ran smoothly during the surgery without latency, despite the distance of over 1,000 miles.”
The advent of 5G could also enable some of China’s more repressive applications of technology, such as facial recognition. Travelers will be able to enjoy faster check-in with facial recognition systems at Beijing’s gargantuan new airport, a China Unicom representative said at a 5G exhibition in the capital accompanying the commercial rollout.

But there are challenges ahead.  For one, relatively few people have 5G-enabled phones or other 5G end points. Huawei has released phones that can support 5G, as have China’s Oppo and South Korea’s Samsung.  Apple, which comprises only 6 percent of the Chinese market, is not expected to release a 5G-capable iPhone until next year.

Further, there are questions about whether Huawei, the main manufacturer of base stations, can keep up its production pace now that it is on an American blacklist. The Trump administration, citing national security concerns, added Huawei and 70 of its affiliates to its entity list in May, blocking them from buying American parts and components.

“It’s going to be really hard for Huawei to overcome the supply chain problems,” said Triolo of Eurasia Group. “Basically, the United States has Swiss-cheesed their supply chain, and there are big question marks hanging over Huawei’s ability to plug the holes.”

The technology is at the heart of a bitter dispute between China and the United States. Washington has expressed concern that 5G hardware made by Chinese manufacturers might contain hidden “back doors” that could enable spying.

……………………………………………………………………………………………………………………………………………………………………………………………………………..

5G Base Stations:

Approximately 13,000 5G base stations have been installed in Beijing, the communications administration said this week.  About 10,000 are already operating.  China already has a total of more than 80,000 5G macro base stations, typically cellular towers with antennas and other hardware that beam wireless signals over wide areas, government officials said. They said China will end the year with about 130,000, while Bernstein Research estimates South Korea will be in second place with 75,000, followed by the U.S. with 10,000.  Piper Jaffray estimated that of the 600,000 5G base stations expected to be rolled out worldwide next year, half will be in China.

Indeed, Chinese operators are launching 5G across fully 80,000 macro base stations this week, a figure that will grow to 130,000 by the end of this year, according to Wall Street research firm Bernstein Research. In comparison, the firm expects South Korea to end the year in second place with 75,000 base stations, followed by the US with just 10,000.

This is why most analyst firms expect China to command the largest number of 5G customers in the years to come.

Telecom-industry executives say Chinese wireless carriers now (and in the future will) buy the most of their cellular transmission equipment from Huawei. Analysts say U.S. measures that limit American businesses from selling components to Huawei could make it more difficult for the Chinese company to make telecom equipment. Huawei says it has taken steps to minimize the impact of such restrictions.

China’s 5G Standard-Approved by ITU-R for IMT 2020 RIT:

It should be noted that China has their own 5G standard, which has been presented to and progressed by ITU-R WP5D which is standardizing the radio aspects of IMT 2020.  Here’s an excerpt of an IEEE Techblog comment:

On July 17, 2019, the ITU-R WP5D#32 meeting ended in Buzios, Brazil. At this meeting, China completed the complete submission of the IMT-2020 (5G) candidate technical solution, and obtained the official acceptance confirmation letter from the ITU regarding the 5G candidate technology solution.

China’s 5G wireless air interface technology (RIT) solution is based on 3GPP new air interface (NR) and narrowband Internet of Things (NB-IoT) technology. Among them, NR focuses on the technical requirements of enhanced mobile broadband (eMBB), low latency and high reliability (URLLC) scenarios, and NB-IoT meets the technical requirements of large-scale machine connection (mMTC) scenarios. China’s 5G technology program expresses China’s understanding of 5G technology, considers the integrity and advancement of 5G technology, and maintains the global unified standard with 3GPP as the core, reflecting China’s industrial interests.

According to the requirements of the ITU, the complete 5G technology submission materials include technical solution descriptive templates, link budget templates, performance indicator satisfaction templates, and self-assessment reports. China’s 5G technology solutions and technical support materials come from many research results of domestic equipment manufacturers, operators and research units, reflecting the collective efforts and collective wisdom in the domestic communications field. China’s self-assessment research results show that the NR+NB-IoT wireless air interface technology solution can fully meet the technical vision requirements of IMT-2020 and the IMT-2020 technical indicators.

https://techblog.comsoc.org/2019/07/17/itu-r-wp5d-brazil-meeting-imt-2020-rit-srits-from-3gpp-china-korea-advance-nufront-submits-new-rit/#comment-3673

……………………………………………………………………………………………………………………………………………………………………………………………………………..

5G Subscriber Pricing:

Chinese officials said the cheapest 5G subscription would cost 128 yuan (about $18) for 30 gigabytes of data a month.  To enjoy the peak speed of 1 Gbps, Unicom customers will pay about $45 a month.

According to the Wall Street research analysts at New Street Research, China Mobile is offering 5G services at a 30% discount to 4G. “A 30GB 4G customer who migrated to 5G on the same plan would see their bill reduced from RMB 188 to RMB 128. Even a 12GB 4G customer migrating to the 30GB 5G plan would save money,” the analysts wrote in a report to investors.

Source: New Street Research

10 million people in China have already registered their intention to purchase 5G subscriptions as we wrote in this IEEE Techblog post.

Mike Dano of Light Reading had this assessment:

A big part of the “race to 5G” discussion centers on spectrum allocation. Operators in China and South Korea are mainly using midband spectrum like 3.5GHz for their 5G buildouts, while operators in the US are using bands ranging from 600MHz to 28GHz because there isn’t much available midband spectrum for 5G in the US. This could change in the months to come as the FCC moves to release midband C-Band spectrum for 5G in the US. Midband spectrum is useful for 5G because it toes the line between providing high-speed connections and covering large geographic areas.

However, in recent months some US policymakers have been working to move the goalposts in the “race to 5G” a bit by pointing out that China’s 5G buildout is mandated by the country’s ruling party while 5G buildouts in the US and elsewhere are driven by the economics of competition and capitalism. As FCC Commissioner Brendan Carr explained earlier this month, that means 5G networks in the US will be more directly aligned with consumer demands than 5G networks in China.

Regardless, China’s official 5G rollout is starting this week — in a country with about four times more potential customers than the US — and it’s undoubtedly going to dwarf the 5G efforts in other countries in terms of most industry metrics.

Huawei vs Apple 5G smartphones in China:

Huawei Technologies has increased its smartphone market share in China to a record 42% in the September quarter, growing shipments by 66% year over year, while Apple’s share fell by two percentage points to 5%, with its shipments falling 28% year over year, according to Canalys.

Huawei has already released 5G-enabled phones—and they’re cheaper than Apple’s high-end non-5G iPhones. More models from other Chinese competitors will likely come out in the next few quarters. Industry analysts don’t expect a 5G-enabled iPhone until late 2020.

Rosenblatt Securities analyst Jun Zhang predicts many low- to mid-end iPhone users in China could switch to a cheaper 5G Android phone in 2020. “We believe Apple still has yet to face its biggest challenge in China, which is the upcoming launch of 5G service in November as well as the coverage for 5G service expanding to 100 cities by the middle of 2020,” Zhang wrote in a Thursday research note. “We continue to expect Apple’s smartphone market share will decline once 5G service starts in more cities,” he wrote in a note to clients.

……………………………………………………………………………………………………………………………………………………………………………………………………………..

References:

https://www.lightreading.com/mobile/5g/chinese-operators-start-selling-5g-at-a-big-discount/d/d-id/755307?

https://www.wsj.com/articles/china-is-about-to-switch-on-5g-its-behind-the-u-s-but-not-for-long-11572494203?

https://www.barrons.com/articles/chinas-5g-networks-go-live-friday-it-could-be-bad-news-for-apple-51572545922

https://www.washingtonpost.com/world/asia_pacific/showing-that-the-us-wont-hold-it-back-china-launches-commercial-5g-service/2019/10/31/4f2e64da-fb16-11e9-9e02-1d45cb3dfa8f_story.html

China’s big 3 mobile operators have 9 Million 5G subscribers in advance of the service; Barron’s: China to lead in 5G deployments

Verizon: strong wireless growth, 5G ultra wideband, relaunch of “5G Home” service, much more

Verizon reported Q3 net income of $5.3 billion, compared to $5.6 billion in the year-ago period. Total consolidated revenue came in at $32.89 billion versus $32.61 million a year ago.

The company, which is the #1 U.S. wireless telco (in subscribers) reported strong wireless growth in the third quarter.  It added 615,000 postpaid (monthly contract) smartphones in Q3; and signed on 444,000 pay-as-you-go prepaid customers. Wireless revenue for the quarter was $23.6 billion.

CEO Hans Vestberg said on the earnings call:

And as you can see in our operation performance, we had a really good quarter when it comes to wireless additions here, one of the best quarter — third quarter we had in several years.

The company has deployed its 5G Ultra Wideband (its 5G mobile service) in 15 markets and is committed to deploy it in 30 markets by year-end.

Verizon has relaunched its fixed wireless “5G Home” fixed wireless broadband service in Chicago, using the 3GPP 5G New Radio release 15 spec, rather than the Verizon proprietary fixed 5G specification used for the initial launch in October 2018.  Verizon said that maximum download speeds via 5G Home remains at 1 Gbit/s, with 300 Mbit/s as the promised minimum speed.

“It’s a new business model,” Verizon CEO Hans Vestberg said on Friday’s call. “Now we have it on the global standard [1], and now we have it on the self-install.”

Note 1.  Once again, Vestberg is confused.  3GPP Release 15 (and any other 3GPP spec) is NOT a standard.

…………………………………………………………………………………………..

Vestberg on the earnings call:

We’re also doing a lot of things in One Fiber, continue to have a very high pace in that. And that One Fiber is so important for our overall Intelligent Edge Network that we are deploying in the company in order to realize the market-purpose network to gain all the efficiencies and serve our customers even better over time. So in short, a lot of progress in the network.

We continue to deploy also 5G Ultra Wideband in stadiums especially now with NFL, 13 stadiums when the season kicks off having 5G coverage. This is important for us because it’s part of the dense urban areas where you have a lot of viewers at the same time when really our 5G is coming to excel. Because of the 5G build that we’re doing with our assets is — we’re making a real big difference here.

We’re going to launch the first 5G mobile edge compute center in the fourth quarter.  (Verizon is) engaging much more with large enterprises because with the 5G platform and 8 currencies, we are now a lot of interactions. We announced in this quarter, for example, collaboration with SAP, Corning. All of them are use cases for the 5G mobile edge compute. So we’re excited all that opportunity we’re creating with the 5G mobile edge compute with the largest companies in the market.

CFO Matt Ellis on Verizon FioS and Business/Enterprise segments:

Fios Internet net additions of 30,000 were relatively flat sequentially and down year-over-year. Fios Video results continued to be impacted by the ongoing shift away from linear video offerings with losses of 67,000. Our customers see value in our high-quality broadband offering paired with multiple choices for video through linear TV bundles or over-the-top options, such as YouTube TV and the recently announced Disney+.

Business wireless volumes remain strong with a 12% increase in gross adds for the quarter primarily within small and medium business and public sector. Postpaid net adds were 408,000 compared to 364,000 in the prior year. This includes 205,000 phones, 112,000 tablets and 91,000 other connected devices. Our continued strong customer loyalty across the Business segment led to phone churn of 0.98%, which is relatively flat sequentially and up slightly over the prior year. Total postpaid churn of 1.22% was up 5 basis points compared to the prior year. Total postpaid device activations were up 5.7% while our retail postpaid upgrade rate was 4.5% versus 4.8% in the prior year.

From a customer group perspective, global enterprise revenues declined 2.4%, driven by legacy pricing pressure and technology shifts. Wholesale revenues declined by 13.7% driven by price compression and volume declines, which we expect to continue in a highly competitive marketplace. Small and medium business revenue increased 6.2% driven by wireless service and Fios growth, partially offset by ongoing declines in traditional data and voice services. Public sector and other revenue increased 1.2% as a result of growth in wireless and wireline products and services.

Vestberg, answering a question from Timothy Horan:

Hans, can you give us maybe some more thoughts what you think people are going to do with gigabit speeds instead of megabits? When we rolled out 4G, we had a lot of new innovative kind of applications. Just any thoughts on that as you’re talking to the Fortune 500 companies. And are there ways for you maybe to participate in some of the revenue from some of these new applications with lower — also maybe lower latency? Just any more thoughts what you’re seeing on use cases.

Vestberg’s reply:

5G Home is a totally new way how we use the technology, which we have never been able to do before because a stand-alone fixed wireless access can never be sustainable financially. In this case, it is.

Then of course when you think about the 8 currencies coming out from 5G, I think that our conversation with the large enterprises today is a lot about the latency and the mobile edge compute. Because suddenly, you can transform your factory with robotics by having a low latency. You don’t need a wired factory, so the future digital factory will have 5G. We see also much bigger 5G private networks, where you get security much higher because it’s going to be your network. You define your network, you have a compute and storage for your enterprise. This is a new way of charging and actually interacting with our customer. And sometimes, there’s going to be a software in between that come from a software company, so we need to work with them as well.

And as I said earlier, I mean this quarter, we’re going to launch our first 5G mobile edge compute center. So we are on the path of doing this, which actually will add more opportunity. Then on the Consumer side, which usually question starts with, which are now end with because I see so many other opportunities, is of course AR/VR. We see now quite a lot of money coming into the ventures side when it comes to 5G innovation. And I think that as we move into 2020, we’re going to see much more. We have our 5G challenge, which we announced at CES where we had a lot of companies participate what they’re going to do with 5G. It ranged from everything what they can do with 5G.

I think we’re at the moment of 4G, but way bigger. When 4G came, I didn’t know what type of application and new service companies would show up. I think this is far bigger that we’re standing in front of right now, and we have much more insights to it as well.

We close with a Verizon assessment from Phillip Leasure:

Verizon has continued to engage in conservative and well thought out initiates compared to the excitement and drama of its competitors.  It has not recently engaged in any historic mergers, it has not made any large corporate purchases to try to move into new sectors and it has fended of lower-priced competitors and continued to add subscribers.  It has made smaller investments and purchases designed to strategically enhance the future of the business. It is clearly the market dominator in its sector and for the most part, has continued to focus on its core business and engage in competitive deals with other content creation companies to provide services rather than try to buy out content creators to provide services to their customers.  So far this has helped them avoid taking on excessive levels of debt and held margins steady. We’ll see if this continues to be a winning strategy going forward for the top dog of telecommunications.

…………………………………………………………………………………………..

 

 

 

 

 

 

Nokia: 5G Costs Hit Q1 Outlook as Shares Crash and Dividend Suspended

We’ve strongly warned for some time that making money in 5G will be extremely difficult until the core IMT 2020 standards (radio and non radio aspects) are complete and widely implemented. Today we heard proof of that from Nokia:

“Some of the risks that we flagged previously related to the initial phase of 5G are now materializing,” Nokia CEO Rajeev Suri said, noting that its third-quarter gross margin was impacted by the “high cost level associated with our first generation 5G products.”

“Competitive intensity has increased in some accounts as some competitors seek to take share in the early stage of 5G,” Nokia said in a statement.  Yet the company said it has 48 commercial 5G deals and has launched 15 live (pre-standard) 5G networks.  It’s telco customers include Sprint, Verizon, AT&T, and T-Mobile in the U.S.

China has been a disappointment for Nokia, too. Greater China made up 8% of Nokia’s net sales in the third quarter, the company said Thursday. But revenue from the region fell by 21% from the year-earlier period.

Nokia shares had one of their worst days ever on Thursday after the Finnish telecom equipment maker reduced its profit outlook to reflect the costs of developing 5G products.  The stock fell by -24% to $3.87 — the largest drop since 1991 — as Nokia also disclosed in its third-quarter earnings release that it would not be paying a dividend for that quarter and the fourth quarter in part to “guarantee Nokia’s ability to increase 5G investments.”

The elimination of Nokia’s dividend contradicted what the company said about dividends on its website to attract investors:

The dividend is the principal method of distributing earnings to shareholders. Over the long term, Nokia targets to deliver an earnings-based growing dividend by distributing approximately 40% to 70% of non-IFRS diluted EPS, taking into account Nokia’s cash position and expected cash flow generation.

Instead of paying a dividend, the company wants to use its cash to increase its 5G investments, strengthen its cash position, and invest in strategic areas such as software. The company expects to start paying dividends again after it reaches a cash balance of 2 billion euros.

Nokia reduced its earnings forecast this year from an operating margin of 9-12 per cent to one of 8.5 per cent, plus or minus one percentage point. For next year, it slashed its estimate of a 12-16 per cent operating margin to 9.5 per cent, plus or minus one percentage point.

……………………………………………………………………………………………………………………………………………………………………………………………………..

It will take much longer than most pundits believe to realize to monetize the potential and make a decent profit from 5G!

In this March 6, 2019, photo, a 5G logo is displayed on a screen outside the showroom at Huawei campus in Shenzhen city, China's Guangdong province. Australia’s ban on Chinese telecoms giant Huawei’s involvement in its future 5G networks and its crackdown on foreign covert interference are testing Beijing’s efforts to project its power overseas. In its latest maneuver, China sent three scholars to spell out in interviews with Australian media and other appearances steps to mend the deepening rift with Beijing - a move that appears to have fallen flat. (AP Photo/Kin Cheung, File)

AJW Comment: We are at the start of the 5G transition and Nokia appears to be having the usual problems of refining and finding cost efficiencies in its technology in its first iterations. Gross margins were hit by “a high cost level associated with our first generation 5G products” combined with “pricing pressure in early 5G deals” as it has been limited in what it can charge for the next-generation equipment by competition for those key first customer wins. There are also “profitability challenges in China,” where there has been patriotic domestic buying and support of Huawei 5G equipment by the three state owned telcos. Also, the proposed (but not consummated) merger of Sprint and T-Mobile in the U.S. is causing uncertainty on future demand in one of Nokia’s main early markets for 5G where the company largely competes only with Ericsson (as Huawei has been shout out of the U.S. telecom equipment market, except for earlier sales to rural wireless carriers).

Nokia is the world’s second-largest telecom gear maker by market share, but way behind #1 Huawei.  Ericsson is #3 (see Positive Note below).

………………………………………………………………………………………………………………………………………………………………………………………

From Nokia’s 3rdQ-2019 earnings statement:

The overall decrease in Nokia gross profit in the first nine months of 2019 was primarily due to lower gross margin in Networks. We experienced relatively high 5G product costs in Networks, as well as elevated levels of deployment services, consistent with being in the initial phase of 5G. This was partially offset by lower costs related to network equipment swaps, net sales growth in both Networks and Nokia Software, as well as higher gross margin in Nokia Software. In the first nine months of 2019, Nokia gross profit benefited from lower incentive accruals.

………………………………………………………………………………………………………………………………………………………..

From the company’s 3rdQ-2019 slide presentation:

Key drivers of Nokia’s outlook-

Net sales and operating margin for Networks and Nokia Software are expected to be influenced by factors including:
• Our expectation that we will perform approximately in-line with our primary addressable market in full year 2019 and full year 2020, as we further prioritize profitability and cash, while continuing to drive growth in our Nokia Software and Nokia Enterprise businesses. (This is an update to earlier commentary to outperform our primary addressable market in full year 2019 and over the longer-term.) On a constant currency basis, we expect our primary addressable market to grow slightly in full year 2019, and for growth to continue in full year 2020;
• Competitive intensity has increased in some accounts as some competitors seek to take share in the early stage of 5G, which is particularly impacting Mobile Access. (This is an update to earlier commentary that competitive intensity could increase);
• Additional 5G investments focused on accelerating our product road maps and cost competitiveness. Investment areas include System on Chip based 5G hardware, including diversifying and strengthening the related supplier base (new commentary);
• Additional digitalization investments focused on driving automation and productivity, including further simplification of IT tools and operational processes (new commentary);
• Temporary capital expenditure constraints in North America related to customer merger activity, as well as other potential mergers or acquisitions by our customers (This is an update to earlier commentary for potential mergers or acquisitions by our customers);
• The timing of completions and acceptances of certain projects, particularly related to 5G. Based on the evolving readiness of the 5G ecosystem and the staggered nature of 5G rollouts in lead countries, we expect full year 2019 will have seasonality characterized by a particularly weak first quarter, a strong second quarter, a solid third quarter and an expected strong fourth quarter (This is an update to earlier commentary for an expected soft third quarter and an expected particularly strong fourth quarter);
• Some customers are reassessing their vendors in light of security concerns, creating near-term pressure to invest in order to secure long-term benefits;
• Our expectation that we will improve our R&D productivity and reduce support function costs through the successful execution of our cost savings program;
• Our product and regional mix, including the impact of the high cost level associated with our first generation 5G products (This is an update to our earlier commentary, providing additional details); and
• Macroeconomic, industry and competitive dynamics.

On a positive note:  “As I look to the future, it is clear to me that Nokia has some unique advantages,” Suri said, citing “a powerful, end-to-end portfolio that allows us to benefit from 5G investments across all network domains.”

Nokia’s dismal earnings report contrasts with that of rival Ericsson which last week beat quarterly earnings expectations and lifted its market forecast for this year and its sales target for 2020. The Swedish firm said demand for (pre-standard) 5G networks was robust: “5G is taking off faster than earlier anticipated,” CEO Börje Ekholm said in an earnings statement. The Swedish telecom equipment company said it had signed 27 commercial 5G contracts.

Other Voices:

Some analysts had thought that Nokia would benefit from the pressure on Huawei. But the disappointing results published Thursday were driven primarily by weakness in the division responsible for rolling out 5G.

“The report was a major disappointment … outlook was cut across the board reflecting the company’s continuing stumbles as the new cycle of network market is starting to take off,” Inderes analyst Mikael Rautanen said in a note to clients.

“This is all very disappointing,” said Lee Simpson, an analyst at Jefferies. “There is something almost embarrassingly irrelevant about the Nokia story now.”

“He has been in the position now for over five years and is still struggling to put in place a sustainable, comprehensive set of results and targets,” sad Neil Campling of Mirabaud Securities.

 

References:

https://www.nokia.com/system/files/2019-10/nokia_results_2019_q3.pdf

https://www.nokia.com/system/files/2019-10/nokia_slides_2019_q3.pdf

 

 

T-Mobile US to cover 200M in U.S. using 600MHz spectrum; OnePlus 7T Pro 5G McLaren smartphone exclusive deal

T-Mobile US plans to cover 200 million people with its 5G network by the end of this year, using 600 MHz spectrum. The “Un-carrier” said it has been working towards the launch of 5G using 600 MHz for the past two years, and will be deploying 5G-ready equipment for both indoors and outdoors.

To date, T-Mobile US has thousands of 5G-ready towers and cell sites capable of lighting up 5G on 600 MHz spectrum, and no other 5G signal will be as strong or as reliable for broad coverage. That means T-Mobile’s nationwide 5G network will be able to cover more people in more places and work indoors and out, unlike the competitors current 5G networks which can be blocked by things like walls, glass and leaves.

T-Mobile says their 5G network operating on 600 MHz spectrum is just the start of the journey to 5G and provides a critical low-band foundation. Together with Sprint, the New T-Mobile will have the ability to add critical depth with mid-band spectrum for broad coverage and performance as well as mmWave spectrum for hotspot-like coverage in dense urban areas. Only this combination will deliver a 5G network with both breadth and depth, something the carriers simply cannot do as quickly. The stakes are high for the U.S., as billions in economic growth and jobs are expected to come from 5G and the innovations it will unleash.

Observation: By deploying 5G on low band spectrum this year, T-Mobile US will be well ahead of AT&T, which has recently promised to launch 5G on its unspecified low band spectrum (probably 700MHz) by the middle of 2020.

T-Mobile CTO Neville Ray said in April that the Un-carrier would provide speeds of 60 Mbit/s to 70 Mbit/s using 5G in the 600MHz band. He said that would be roughly double the speeds the operator currently provides on its 600MHz spectrum with its 4G LTE network.

Mike Dano of Light Reading had this to say about T-Mo’s 5G on 600 MHz announcement:

T-Mobile’s lowband 5G network won’t provide speeds anywhere near the 1 Gbit/s peak speeds that Verizon is providing with its 5G network over millimeter-wave (mmWave) spectrum. Nor are those speeds nearly as fast as the roughly 500 Mbit/s peak speeds that T-Mobile is already providing on a mmWave 5G network the operator launched this summer in parts of six cities.

However, the key element of T-Mobile’s launch of 5G in its 600MHz spectrum is that it will reach across major portions of the US population. That’s because transmissions in 600MHz spectrum can cover large geographic distances, while transmissions in mmWave spectrum can’t go more than a few thousand feet. The tradeoff, though, is capacity and speeds: mmWave 5G can handle enormous amounts of data, while lowband 5G can’t.

Once again, we warn readers that none of the spectrum that’s being used for pre-standard (IMT 2020) commercial services have been approved by the ITU-R for 5G.  That will only happen after WRC 19 has concluded as per this recent WRC 19 Preview article.  Also note that mmW 5G will require line of sight transmission and many more small cells due to limited reach so will be restricted to dense urban areas.

………………………………………………………………………………………………………………………………………………………………………..

In the same T-Mo press release, OnePlus announced its OnePlus 7T Pro 5G McLaren smartphone, which it will be providing exclusively in the United States with T-Mobile US. The limited edition McLaren phone will have a 6.67 inch Fluid Display, a 90 Hz refresh rate, three cameras including a 48 MP main one, 3X optical zoom and a 117 degree Ultra-Wide-Angle lens. The 4085 mAh battery will come with Warp Charge 30T, for a full charge in one hour. Finally, the phone case will be made of Alcantara, a composite fabric material made to be soft, durable and very gripable. Pricing will be provided later this year, as will availability dates.

“At OnePlus we believe that 5G is the future,” said Pete Lau, CEO and Founder of OnePlus. “T-Mobile has always been a great partner, and T-Mobile’s expansive 5G network on the 600 MHz spectrum makes it the perfect opportunity for us to exclusively launch the OnePlus 7T Pro 5G McLaren in the United States,” he added.

Image of the OnePlus 7T Pro 5G McLaren

The OnePlus 7T Pro 5G McLaren will launch exclusively at T-Mobile and take advantage of the Un-carrier’s 5G network

…………………………………………………………………………………………………………………………………………………………………………

Separately, T-Mobile US has launched a new campaign against Verizon, highlighting how the rival operator charges more for 5G but has limited coverage. The ‘VerHIDEzon’ campaign points out how Verizon does not provide customers with maps of its 5G coverage.

The campaign will run online and outdoors, including on T-Mobile’s Times Square display in New York city. It also promotes T-Mobile’s pledge to bring 5G to all of the US if its merger with Sprint goes ahead.

 

References:

https://www.t-mobile.com/news/oneplus-7t-pro-5g

https://www.lightreading.com/mobile/5g/t-mobile-to-launch-lowband-5g-earlier-than-previously-scheduled/d/d-id/755091?

Preview of WRC‑19: Enabling Global Radiocommunications via Radio Frequency Spectrum and Satellite Orbit Resources

To learn more about the new OnePlus 7T Pro 5G McLaren at T-Mobile, please visit https://www.t-mobile.com/devices/5g-phones. For more about T-Mobile’s 5G network, visit www.t-mobile.com/coverage, and to learn more about the proposed T-Mobile/Sprint merger, visit www.NewTMobile.com.

 

Gartner: 5G IoT endpoints to triple between 2020 and 2021; Surveillance cameras to be largest market over next 3 years

Executive Summary:

After 3GPP release 16 has been completed and included in IMT 2020 RIT/SRIT, 5G networks will offer ultra-reliable, ultra-low-latency and high-bandwidth capabilities.  That will open up new enterprise market opportunities for communications service providers/wireless network operators.  Therefore, understanding the future market is key to an effective strategy. Gartner Inc. says that IoT use cases like surveillance cameras and connected cars will offer the biggest markets for 5G IoT.

Outdoor surveillance cameras will be the largest market for 5G Internet of Things (IoT) solutions worldwide over the next three years, according to Gartner.  These cameras will represent 70% of the 5G IoT endpoint installed base in 2020, before contracting to 32% by the end of 2023.5G IoT installed endpoints for outdoor surveillance cameras will reach 2.5 million in 2020, 6.2 million units in 2021 and 11.2 million units in 2022, but will be surpassed by connected cars in 2023. “Cameras deployed by city operators or used to ensure building security and provide intruder detection offer the largest addressable market as they are located outdoors, often across cities, and require cellular connectivity,” said Stephanie Baghdassarian, senior research director at Gartner Inc.
Gartner predicts that the 5G IoT endpoint installed base will more than triple between 2020 and 2021, from 3.5 million units in 2020 to 11.3 million units in 2021. By 2023, the 5G IoT endpoint installed base will approach 49 million units (see Table 1).
5G capabilities open up new enterprise market opportunities, so communications service providers (CSPs) need to assess the many use cases with a view to prioritizing investment in the building of IoT solutions.
“Their investments should focus on outdoor surveillance cameras, connected cars, and government and physical security,” said Ms. Baghdassarian.Table 1: 5G IoT Endpoint Installed Base, Worldwide, 2020 and 2023 (Thousands of Units)

Segment 2020

Volume

2020

Market Share (%)

2023

Volume

2023

Market Share (%)

Connected cars — embedded (consumer and commercial)  

393

 

11

 

19,087

 

39

 

Outdoor surveillance cameras

 

2,482

 

70

 

15,762

 

32

 

Fleet telematics devices

 

135

 

4

 

5,146

 

11

 

In-vehicle toll devices

 

50

 

1

 

1,552

 

3

 

Emergency services

 

61

 

2

 

1,181

 

2

 

Others

 

400

 

11

 

5,863

 

12

 

Total

 

3,522

 

100

 

48,590

 

100

Due to rounding, figures may not add up precisely to the totals shown

Source: Gartner (October 2019)

Connected Cars Will Offer the Biggest Opportunity for 5G IoT in the Long Term:

In 2023, the automotive industry will become the largest market opportunity for 5G IoT solutions. It will represent 53% of the overall 5G IoT endpoint opportunity in that year.

Within the automotive sector, embedded connected-car modules are the major use case for 5G. Embedded endpoints in connected cars for commercial and consumer markets will represent an installed base of 19.1 million units out of a total of 25.9 million 5G endpoints in the automotive sector in 2023.

“The addressable market for embedded 5G connections in connected cars is growing faster than the overall growth in the 5G IoT sector,” said Ms. Baghdassarian. “Commercial and consumer connected-car embedded 5G endpoints will represent 11% of all 5G endpoints installed in 2020, and this figure will reach 39% by the end of 2023.”

In addition, the share of 5G-connected cars actively connected to a 5G service will grow from 15% in 2020 to 74% in 2023. This figure will reach 94% in 2028, when 5G technology will be used for Cellular V2X communications that enable messages to be sent and received within vehicles and between vehicles, infrastructure, pedestrians, cyclists and more. Ultimately, connected cars actively connected to a 5G service will help keep traffic moving and improve road safety.

“As the automotive industry will be the largest sector for IoT endpoints and 5G IoT use cases in the long term, we recommend that CSPs that want to be relevant in the 5G IoT market put this industry at the forefront of their investments. They should do this in terms of personnel who understand the sector and of partnerships that will move the market forward,” said Ms. Baghdassarian.

Surveillance cameras to be biggest market for 5G IoT solutions

Other Analyst and Industry Opinions:

“The industrial IoT market is among the most fractured especially amongst the verticals like healthcare and automotive,” said Lee Doyle, principal analyst with Doyle  Research. “Large companies such a Cisco, HP and IBM have been challenged to address it because it is so fractured. It’s not at all clear any one of them has the overall network architecture to handle it all.”  Vendors need to show users on a case-by-case, application-by-application basis what works, Doyle said.

…………………………………………………………………………………………………………………………………………………………………………………………………………

“With 5G, you can put more video cameras up in a big facility to monitor where folks are going and what they’re doing. Then bring analytics into the picture to increase efficiency. Speed really matters when you’re adding that many cameras,” said Samsung Networks’ VP of Networks Strategy & Marketing Alok Shah.

Shah believes the most “magical” element of 5G for enterprise users is decreased latency (so does this author, but it won’t happen till 3GPP Release 16 is finalized). “Bringing latency down substantially allows the user to perform from a remote perspective much more.  Robotics in factories can be manipulated without being there in person,” he elaborated.

In addition, with 5G, the number of IoT sensors that can be implemented can skyrocket. “It can go up to a million sensors around a facility, which is huge,” Shah stated. “It’s a combo of these different things. You don’t get all of this at once because different devices have different requirements, but network slicing will help with this,” Shah added.

……………………………………………………………………………………………………………………………………………………………………

Ericsson’s new 5G business potential report considers a set of “5G-enabled B2B use case clusters” as drivers of industrial 5G revenues. Among these use case clusters, it said “enhanced video services” represents the largest opportunity for telecoms providers in terms of value across industrial sectors, worth up to 17 per cent or $118 billion of the total value by 2030.

Ericsson said enterprise 5G services will drive up to $700 billion of new revenues in the period. However, the total market, of 5G services for industry will be worth more than twice that, it said. The $700 billion operators can go for corresponds to 47 per cent of the total 5G business-to-business (B2B) market to be served by ICT players.   Network  operators must extend their reach “beyond connectivity” and consider newer roles for their services and expertise within the B2B value chain, and “what use case clusters to address.”  Operators must act urgently, Ericsson warned, if they are to capture new value from industrial transformation services, as revenues for existing airtime services will remain stagnant through to 2030.

The chart below superbly illustrates the dire dilemma of network operators- traffic increasing exponentially, revenues (measured by ARPU) decreasing!

Jan Karlsson, senior vice president and head of B2B digital services at Ericsson, said: “The journey to grow the 5G business starts now by building momentum and identifying 5G-enabled B2B opportunities.”

Ericsson looked at the following industrial sectors for its report: manufacturing, automotive, energy and utilities, public safety, healthcare, media and entertainment, public transport, financial services, retail, and agriculture.

Other use cases in the report, besides enhanced video, include real-time automation, connected vehicles, and augmented/virtual reality.  The company said use case examples building up these ‘clusters’ include live streaming of events, real-time monitoring of distributed energy, and autonomous cars.

–>Please refer to my comment in box below this article for more on the Ericsson report.

……………………………………………………………………………………………………………………………………………………………………

“Clearly there is no single access technology out there that solves all the problems and challenges of networking especially in the industrial arena where customers have one of every type of communications device imaginable, but 5G and Wi-Fi 6 will deliver a whole bunch of new use cases and address many multi-access  requirement challenges,” said Liz Centoni, senior vice president and general manager of Cisco’s Internet of Things Business Unit, in an interview with Network World.

“Many industrial IoT use cases mandate wide mobility, low latency, and mission-critical reliability, such as mobile-robot control in production automation and autonomous vehicles in open-pit mining. These use cases rely on wireless access at 50ms to 1ms latency and service reliability from 5 nines to 6 nines,” Centoni wrote in a recent blog about 5G.

“4G/LTE has attempted to address these use cases but has often failed due to unsatisfactory performance. 5G’s combination of ultra-reliable and low-latency connection will extend industrial IoT to unconquered spaces,” Centoni.

Cisco’s Scott Harrell, senior vice president and general manager of enterprise networking told Network World the company expects to see a lot of 5G being used in branches as a faster backup and bandwidth alternative to current 4G or LTE links. Keeping an enterprise’s branch and campus locations all connected to each other and the internet has traditionally fallen to wired technologies like T1/E1 and xDSL, Harrell said. Today, 4G is often used to quickly bring up sites or as a back-up link, but it’s seldom used as a primary link, due to bandwidth limitations and cost, Harrell said.

https://www.networkworld.com/article/3446457/cisco-pushes-5g-to-hasten-industrial-iot.html

https://blogs.cisco.com/news/how-5g-will-accelerate-industrial-iot

https://www.ericsson.com/assets/local/5g/the-5g-for-business-a-2030-compass-report-2019.pdf

 

 

 

Verizon CEO Hans Vestberg: The 5G Revolution and Separate 5G Standards?

Verizon CEO Hans Vestberg has warned that a lack of trust among telcos could lead to separate standards being set for 5G networks.  The assumption here was that Huawei would implement one type of 5G standard with rest of the world implementing another.  That would be very bad Vestberg said, just as the CDMA and GSM specifications split the cellular industry during development of 3G standards.

“If there are going to be different 5G global standards, it will impact the whole telecom industry,” he said.  “Right now, 5G is defined as a standard and everybody has agreed to it… 6G is probably coming in 7 or 8 years from now,” Vestberg said.

Vestberg’s comments came at Yahoo Finance All Markets Summit in New York.  It was in a response to a question about whether U.S. security concerns about China’s telecommunications giant Huawei Technologies were justified, as that company has emerged as the leader in 5G technologies.  The Verizon CEO declined to comment on possible security issues regarding Huawei Technologies.

However, he said that if trust – among the various technologies’ developers, and the nations that would use them – is lost, the consequence might be that different 5G providers would devise different standards.

–>We view such a statement as remarkable, if not outrageous, since Verizon does not send a representative to attend ITU-R WP5D meetings where the ONLY 5G radio standard- IMT 2020- is being progressed. Not once during this Yahoo interview did Vestberg say “IMT 2020.”

You can watch the video of the Vestberg interview here.

“The 5G technology is ultimately one of the most important infrastructures for the 21st century,” said Vestberg. “If we go back to – some of you might remember – the CDMA and GSM age, that really was not good.”  “The tech development is moving fast, software improvements are quick.  We are going to see an extraordinary impact from 5G in the next couple of years.  Verizon plans to have 5G coverage in 14 NFL stadiums,” he added.

Verizon Communications chief executive Hans Vestberg interviewed during the Yahoo Finance All Markets Summit in New York on Thursday. Photo: Invision via AP

Verizon Communications chief executive Hans Vestberg interviewed during the Yahoo Finance All Markets Summit in New York on Thursday. Photo: Invision via AP

…………………………………………………………………………………………………………………………………………………………………………………………………………………………

About the Yahoo All Markets Summit:

The theme of Yahoo’s All Markets Summit on 10/10/2019 in New York is Generational Opportunities. We are living in a time of profound generational change and young people today are informed by new trends like diversity and inclusion, political resets, economic dislocation and technological change like no generation before. Understanding and managing this change is essential for businesses and leaders, as the implications on all constituencies, including shareholders, customers and employees is critical. For additional information or questions please email AMS@YAHOOFINANCE.COM.

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

References:

https://sg.news.yahoo.com/verizon-ceo-warns-against-separate-173849596.html

https://finance.yahoo.com/video/verizon-ceo-hans-vestberg-5g-154910283.html  (video of Vestberg interview)

https://www.scmp.com/news/world/united-states-canada/article/3032434/verizon-ceo-warns-against-separate-5g-standards (seems to be a copy of the 1st reference)

 

Recent Posts