Verizon
U.S. Network Operators and Equipment Companies Agree: 5G CAPEX slowing more than expected
We noted in a recent IEEE Techblog post that the 5G spending slowdown in the U.S. is broader than many analysts and executives expected. Well, it’s worse than that! The previously referenced negative comments from the CEO of Crown Castle, were corroborated by American Tower last week:
“The recent pullback was more abrupt than our initial expectations,” said Rod Smith, the CFO for cell tower firm American Tower, during his company’s quarterly conference call last week, according to Seeking Alpha. Smith was discussing the reduction in US operator spending on 5G, a situation that is now cutting $40 million out of American Tower’s margin expectations. “The initial burst of 5G activity has slowed down,” agreed the financial analysts at Raymond James in a note to investors following the release of American Tower’s earnings.
Cell tower giant SBA Communications said it too is seeing the broad pullback in spending that has affected its cell tower competitors (i.e. American Tower and Crown Castle). But the company’s management sought to reassure investors with promises of continued growth over the long term. During their earnings call, SBA executives said they expect activity to increase next year as T-Mobile looks to add 3.45GHz and C-band spectrum to its network, and as Dish Network restarts its network buildout.
The two largest 5G network equipment vendors that sell gear in the U.S. are seeing similar CAPEX cutbacks. “We see some recovery in the second half of the year but it will be slower than previously expected,” Nokia CEO Pekka Lundmark said earlier this month during his company’s quarterly conference call, in response to a question about the company’s sales in North America. His comments were transcribed by Seeking Alpha. Ericsson’s CEO, Borje Ekholm, is experiencing similar trends: “We see the buildout pace being moderated,” he said of the North American market, according to a Seeking Alpha transcript
AT&T’s CFO Pascal Desroches confirmed the #1 U.S. network operator is slowing its network spending. “We expect to move past peak capital investment levels as we exit the year,” he said during AT&T’s quarterly conference call, as per a Seeking Alpha transcript. AT&T’s overall CAPEX would be $1 billion lower in the second half of 2023 when compared with the first half of this year due to greatly reduced 5G network build-outs.
“This implies full year capex of ~$23.7 billion, which management believes is consistent with their prior full year 2023 capex guidance of ‘~$24 billion, near consistent with 2022 levels’ and includes vendor financing payments,” wrote the financial analysts at Raymond James in their assessment of AT&T’s second quarter results, citing prior AT&T guidance.
“Although management declined to guide its 2024 outlook, it has suggested that it expects capital investments to come down as it progresses past the peak of its 5G investment and deployments. We believe the trends present largely known CY23 [calendar year 2023] headwinds for direct 5G plays CommScope, Ericsson and Nokia. Opportunities from FWA [fixed wireless access] might provide modest offsets and validate Cambium’s business. AT&T’s focus on meeting its FCF [free cash flow] targets challenge all of its exposed suppliers, which also include Ciena, Infinera and Juniper,” the financial services firm added.
Verizon CEO Hans Vestberg told a Citi investor conference in January that CAPEX would drop to about $17bn in 2024, down from $22bn in 2022″ “We continue to expect 2023 capital spending to be within our guidance of $18.25 billion to $19.25 billion. Our peak capital spend is behind us, and we are now at a business-as-usual run rate for capex, which we expect will continue into 2024,” explained Verizon CFO Tony Skiadas during his company’s quarterly conference call last week, according to Seeking Alpha.
“After years of underperformance, perhaps the best argument for Verizon equity is that expectations are very low. They are coming into a phase where capex will fall now that they’ve largely completed their 5G network augmentation. Higher free cash flow will flatter valuations, but it will also, more importantly, lead to de-levering first, and potentially even to share repurchases down the road,” speculated the analysts at MoffettNathanson in a research note to investors following the release of Verizon’s earnings.
T-Mobile USA had previously said its expansive 5G build-out had achieved a high degree of scale and it would reduce its capex sharply starting in 2023.”We expect capex to taper in Q3 and then further in Q4,” said T-Mobile USA’s CFO Peter Osvaldik during his company’s quarterly conference call last week, according to Seeking Alpha. He said T-Mobile’s capex for 2023 would total just under $10 billion. T-Mobile hopes to cover around 300 million people with its 2.5GHz midband network by the end of this year. Afterward, it plans to invest in its network only in locations where such investments are necessary.
Similarly, Verizon and AT&T are completing deployments of their midband C-band 5G networks, and will slow spending after doing so. That’s even though neither telco has deployed a 5G SA core network which involves major expenses to build, operate and maintain.
Dish Network managed to meet a federal deadline to cover 70% of the U.S. population with it’s 5G OpenRAN in June. As a result, the company said it would pause its spending until next year at the earliest.
American Tower was a bit more hopeful that CAPEX would pick up in the future:
- “Moderation in carrier spend following the recent historic levels of activity we’ve seen in the industry isn’t unexpected and is consistent with past network generation investment cycles,” explained CFO Rod Smith.
- “The cycles typically progress as there’s a coverage cycle. It’s what we’ve seen in past cycles, including 3G and 4G. It’s an initial multiyear period of elevated coverage capex, and it’s tied to new G spectrum aimed at upgrading the existing infrastructure,” said American Tower’s CEO Tom Bartlett. “And then later in the cycle, it will fill back into a capacity stage where we’ll start to see more densification going on. So I’m hopeful that our investor base doesn’t get spooked by the fact that this is a pullback. It’s very consistent. The cadence is really spot on with what we’ve seen with other technologies.”
In April, Dell’Oro Group analyst Stefan Pongratz forecast global telecom capex is projected to decline at a 2% to 3% CAGR over the next 3 years, as positive growth in India will not be enough to offset sharp capex cuts in North America. He also predicted that wireless CAPEX in the North America (NA) region would decline 10% to 20% in 2023 as per this chart:
Now, that NA CAPEX decline seems more like 30% this year!
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References:
U.S. 5G spending slowdown continues; RAN revenues set to decline for years!
USA’s 5G capex bubble will burst this year as three main operators cut back
GSM 5G-Market Snapshot Highlights – July 2023 (includes 5G SA status)
Worldwide Telecom Capex to Decline in 2023, According to Dell’Oro Group
https://www.fiercewireless.com/wireless/wireless-capex-north-america-expected-decline-10-20-2023
Dell’Oro: Telecom Capex Growth to Slow in calendar years 2022-2024
Verizon Point-To-Multipoint network architecture using mmWave Spectrum
Verizon has unveiled a point-to-multipoint solution to expand high-speed internet access across various locations. According to the press release, a successful proof of concept in Texas showcased the company’s approach, leveraging its extensive mmWave spectrum holdings and fiber infrastructure.
Verizon stated that its point-to-multipoint architecture is designed to cater to multi-dwelling units (MDUs) such as apartment buildings and townhomes, as well as distributed enterprise campuses and high rises. Intending to serve multiple end-user connections from a single origination location, Verizon said this solution promises reliable, secure, and efficient connectivity.
The company claims this network architecture is less expensive to build, quicker to deploy, and addresses the unique complexities of distributed end users in a single facility or small area such as a residential unit with a large population.
In this proof of concept, an airlink over licensed mmWave spectrum was established between a centralized, rooftop radio site and a radio atop a simulated multi end-point building. The signal was then transmitted via coaxial cable throughout the building to a data processing unit along with a corresponding modem. From there, the building’s existing wiring transported the signal to end user routers that provided broadband coverage throughout simulated distributed end points. Instead of transmitting the data through Verizon’s 4G and 5G wireless cores, this unique architecture uses a simplified Broadband Network Gateway to direct the traffic to and from the internet over Verizon’s public IP network. This means that data traffic will not add load on Verizon’s current wireless cores while at the same time providing excellent capacity and latency.
Source: Research Gate Point-to-multipoint FWA network architecture
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“Verizon has been building the infrastructure and assets for years to make this new design possible,” said Adam Koeppe, Senior Vice President of Technology Planning for Verizon. “Leveraging our significant fiber footprint in over 70 major markets nationwide and large amounts of ready-to-use mmWave spectrum, this new architecture means we will be able to provide point-to-multipoint architecture in a cost effective and efficient way.”
Leveraging Verizon’s current mmWave spectrum and fiber assets means this point-to-multipoint technology could reduce the cost of providing broadband to many locations. Depending on the various designs of buildings, office complexes and campuses, running fiber connections to individual buildings and individual units within buildings requires complex licensing, significant capital investments, long lead times and can be disruptive, making air links and established indoor cabling appealing alternatives for delivering services. Applications for this type of point to multipoint mmWave based technology could include distributed enterprise campuses, commerce areas, home broadband for multi dwelling units or other areas where air links could easily connect donor sites in the Radio Access Network to facilities with their own internal infrastructure.
Verizon is completing RFPs for the specialized radio access equipment for the licensed 37-39 GHz spectrum and expects to continue developing this technology throughout the year.
References:
https://www.verizon.com/about/news/verizon-develops-new-point-multi-point-use-case-mmwave-spectrum
https://www.verizon.com/about/our-company/5g/what-millimeter-wave-technology
Will 2022 be the year for 5G Fixed Wireless Access (FWA) or a conundrum for telcos?
Lightshed Partners says absolutely! “This is the year for 5G Wireless Home Broadband,” as it emerges as a viable competitor to cable based Internet access.
The market research firm believes that the recent deployment of large blocks of spectrum by wireless operators will enable them to offer viable home broadband service to a notable segment of the market.
T-Mobile is already adding more than 200k home broadband subs per quarter, and Verizon is about to unleash rate plans that drop as low as $25/month. Verizon is also layering additional commission opportunities for their sales group. The vast majority of cell phone upgrades in the U.S. are still done in a cellular operator’s store. That provides wireless network operators with a familiar opportunity to sell home broadband and they are incenting their salesforce to do so.
Fixed wireless access (FWA) services into homes and offices, have approximately 7 million users around the U.S. The new efforts by Verizon and T-Mobile appear poised to push the technology into the cable industry’s core domain.
“We forecast that Verizon and T-Mobile will add 1.8 million wireless home broadband customers in 2022, more than doubling the 750,000 added in 2021,” the LightShed analysts forecast. “To put that growth in context, Comcast, Charter and Altice combined added 2.4 million broadband subscribers in 2021 and 2.7 million in 2019. Investors expect these three cable companies to add more than 2 million broadband subs in 2022, but even that reduced level of growth from recent years may prove to be too aggressive.”
5G fixed wireless access (FWA) services could serve 8.4 million rural households—nearly half the rural homes in the U.S.—with a “future-proof”, rapidly deployable, and cost-effective high-speed broadband option, according to a new Accenture study commissioned by CTIA, the wireless industry association.
Other analysts agree. “Fixed wireless probably cost Comcast and Charter, in aggregate, about 180,000 subscribers in the second half of 2021,” wrote the financial analysts at Sanford C. Bernstein & Co. in a recent note to investors.
“The great risk seems to lie in late 2022 and 2023. As Verizon, T-Mobile and AT&T deploy initial and subsequent blocks of C-band spectrum and as T-Mobile expands its 2.5GHz coverage to the last 1/3rd of US households, the availability of fixed wireless should expand,” Bernstein analysts wrote.
The financial analysts at Evercore predict that FWA services will gain a growing share of U.S. broadband new subscribe additions. Light Reading’s Mike Dano wrote the reasons are as follows:
- Verizon and T-Mobile are in the midst of deploying significant amounts of new spectrum into their networks. The addition of C-band spectrum (for Verizon) and 2.5GHz spectrum (for T-Mobile) will give them far more network capacity. And that’s important considering the average Internet household chews through almost 500 GB per month, according to OpenVault. The average smartphone user, meanwhile, consumes just 12 GB per month, according to Ericsson.
- Verizon and T-Mobile have finally shifted their FWA offerings from the test phase into the deployment phase. Although Verizon has been discussing FWA services for years, it finally started reporting actual customer numbers late last year (it ended the third quarter of 2021 with a total of 150,000 customers). Similarly, T-Mobile first outlined its FWA strategy in 2018, but officially launched its 5G FWA service in April – the company ended 2021 with 646,000 in-home Internet customers, well above its goal of 500,000. And both companies have recently cut FWA prices.
- The cable industry appears to be in the early stages of what MoffettNathanson analyst firm described as the “great deceleration.” According to the principal analyst Craig Moffett, this cable industry slowdown stems from such factors as a decrease in the rate of new household formation, increased competition from fiber providers – and FWA. He described the situation as a “concerning issue for cable investors, particularly if it appears that this is just a taste of what lies ahead.”
However, Craig is not convinced that FWA from telcos will mount a serious threat to cablecos Internet, partly because of capacity challenges operators will face as they bring subscribers onto the platform. They also wonder if it makes sense for mobile operators to get too aggressive with FWA, considering the much higher value on a per-gigabit basis they get from their respective mobile bases.
MoffettNathanson does acknowledge that both Verizon and T-Mobile have ramped up their focus on FWA even as AT&T takes a more cautious, targeted approach. Last week at an investor conference, AT&T CEO John Stankey said:
I believe that having some fixed high bandwidth infrastructure is going to be essential to being an effective networking company moving forward… Is fixed wireless going to be the best way to get a lot of bandwidth out to less densely populated rural areas? Yes, it probably will be. So is there a segment of the market where fixed wireless will apply and be effective? Sure, it will, and we’ll be in a position to have the right product to address those places.
But I don’t want to just simply say, well, that is the single solution that’s going to deal with what I would call the 70% of the business community, the 70% of the consumer population that are going to be pretty intensive users in some location, indeed, to have fixed infrastructure to support that over the long haul, given all the innovation that’s going to come……I see an opportunity for us to be very targeted and very disciplined around what we do (in FWA) and what used to be I hate using the term but traditional out of region markets, where good fiber deployment that supplements the strength of our wireless network.
Moffett wrote in a note to clients today:
There’s been a sea change in the rhetoric about fixed wireless broadband. We’re admittedly still struggling to understand it.
Until recently, Verizon and T-Mobile had, by turns, swung between aggressiveness and reticence. Investors will recall that in 2018, Verizon made bold claims about millimeter wave-based FWA. T-Mobile was rather skeptical at the time, not just about mmWave but even about FWA-over-mid-band. By 2019, Verizon had pulled in their horns, just as T-Mobile was first committing to bring FWA to rural Americans in a bid to sell their Sprint merger to regulators. At the start of last year, when all three of Verizon, AT&T, and T-Mobile held analyst days, T-Mobile upped the ante, forecasting 7-8M FWA customers by 2025. But Verizon was by then more cautious, committing only to a paltry $1B in revenue by 2024 (equating to perhaps 1.7M customers) and warning that their participation would be back end loaded. And AT&T was more cautious still, arguing that the capacity utilization implications made FWA unattractive.
Now, for the first time, Verizon and T-Mobile are pounding the table at the same time. What has changed? And what does it mean for the many plans for fiber overbuilds?
First, it’s important to consider the network capacity implications of fixed wireless. Most investors understand that the burden of serving homes with a wired broadband replacement is far greater than that of serving individual phones for mobility. But investors will also understand that network utilization isn’t uniform across all cell sites; there are cell sites with more excess capacity and there are cell sites with less.
The challenge for operators is to ensure that their FWA subscriptions fit as neatly as possible into the cell sites, or sectors of cell sites, with the most available capacity (a cell site will typically be divided into three sectors, each covering a 120 degree arc).
No operator wants to risk their high-value mobile service experience for the benefit of a few incremental low-value fixed subscriptions (as we’ll see shortly, the revenue per bit from a mobile customer is 30 to 50x higher than that for fixed).
Still, both T-Mobile and Verizon see FWA as promising. T-Mobile expects to have between 7 million to 8 million FWA subs by 2025, and views an addressable market of about 30 million homes that are suitable from a signal quality and capacity standpoint. T-Mobile has already noted that their 664K FWA customers include a mix of customers from relatively rural areas with limited or no wired broadband availability and those from suburbia who were previously cable subscribers.
Verizon, meanwhile, is committing to about $1 billion in FWA revenues by 2024, which MoffettNathanson equates to roughly 1.7 million customers (Verizon ended Q3 2021 with about 150,000 FWA subscribers).
Craig questions whether there’s enough bandwidth to go around to fulfill subscriber targets, and if getting aggressive with FWA makes business sense. He indicates that 5G telcos are getting desperate to find revenues after spending billions of dollars for licensed spectrum and 5G RAN buildouts.
With tens of billions of dollars of investment in spectrum already sunk, and with tens of billions more to come for network densification, one might imagine that carriers are desperate to find a more tangible revenue opportunity than one that depends on beating Amazon AWS at what is essentially just a next iteration of cloud services.
And when all is said and done, Craig is as puzzled as this author:
As we said at the outset… we’re struggling to understand. We’re struggling to understand why Verizon and T-Mobile suddenly see this (FWA) relatively low value use of network resources as attractive. We’re struggling to understand how, after an initial burst of growth, they will sustain that growth as sectors “fill up.” We’re struggling to understand why they have set such ambitious targets so publicly. And we’re struggling to understand why cable investors have come to expect that deployments of FWA and fiber should be treated as independent, or additive, risks. It doesn’t seem, to us, that it all adds up.
Opinion: We think an undisclosed reason for telco interest in FWA is that 5G mobile offers few, if any advantages over 4G and there is no roaming. Therefore, the 5G enhanced mobile broadband use case will continue to fail to gain market traction. 5G FWA can work well with a proprietary telco/cloud native 5G SA core network which could be shared by both 5G mobile and FWA subscribers (perhaps using the over hyped “network slicing”). So even though FWA was NOT an ITU IMT 2020 use case, it still has a lot of room to grow into a revenue generating service for wireless telcos.
References:
MoffettNathanson research note (only available to the firm’s clients)
Complete and Comprehensive Highlights of AT&T CEO’s Remarks at Citi Conference
Verizon partners with Amazon Project Kuiper to offer FWA in unconnected and underserved areas
Today at the 2021 Mobile World Congress (MWC) Los Angeles CA, Verizon and Amazon announced a strategic collaboration that will combine Verizon’s 5G wireless network with Amazon’s Project Kuiper constellation of low-Earth orbit (LEO) satellites. The first offering from the new partnership will backhaul Verizon’s cell sites through Amazon’s LEO satellites, enabling Verizon to offer fixed wireless access (FWA) in unconnected rural or underserved areas.
As part of the collaboration, Project Kuiper and Verizon have begun to develop technical specifications [1.] and define preliminary commercial models for a range of connectivity services for U.S. consumers and global enterprise customers operating in rural and remote locations around the world.
Note 1. There are no 3GPP specifications or ITU recommendations for the use of LEO satellites for 5G (IMT 2020/ITU-R M.2150) backhaul. Therefore, new carrier specifications are needed for 5G RANs to use LEO satellite networks for backhaul.
However, 3GPP is planning to include non-terrestrial networks (NTN) and to address satellite’s role in the 5G vision in their Release 17 package of specifications, to be released next year. You can read an overview of 3GPP NTN’s here.
ITU-R SG 4 is responsible for Satellite services. That includes Systems and networks for the fixed-satellite service, mobile-satellite service, broadcasting-satellite service and radiodetermination-satellite service. In particular,
ITU-R WP4B carries out studies on performance, availability, air interfaces and earth-station equipment of satellite systems in the FSS, BSS and MSS. This group has paid particular attention to the studies of Internet Protocol (IP)-related system aspects and performance and has developed new and revised Recommendations and Reports on IP over satellite to meet the growing need for satellite links to carry IP traffic. This group has close cooperation with the ITU Telecommunication Standardization Sector. Of particular interest are:
- Terms of Reference for Working Party 4B Correspondence Group on satellite radio interface technologies for the satellite component of IMT-2020.
- Working document towards a preliminary draft new Report ITU-R M.[XYZ.ABC] on Vision and requirements for satellite radio interface(s) of IMT-2020
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Amazon’s Project Kuiper is an initiative to increase global broadband access through a constellation of 3,236 satellites in low Earth orbit (LEO) around the planet. The system will serve individual households, as well as schools, hospitals, businesses and other organizations operating in places where internet access is limited or unavailable. Amazon has committed an initial $10 billion to the program, which will deliver fast, affordable broadband to customers and communities around the world.
The Verizon-Amazon partnership seeks to expand coverage and deliver new customer-focused connectivity solutions that combine Amazon’s advanced LEO satellite system and Verizon’s world-class wireless technology and infrastructure. To begin, Amazon and Verizon will focus on expanding Verizon data networks using cellular backhaul solutions from Project Kuiper. The integration will leverage antenna development already in progress from the Project Kuiper team, and both engineering teams are now working together to define technical requirements to help extend fixed wireless coverage to rural and remote communities across the United States.
Verizon Chairman and CEO Hans Vestberg said, “Project Kuiper offers flexibility and unique capabilities for a LEO satellite system, and we’re excited about the prospect of adding a complementary connectivity layer to our existing partnership with Amazon. We know the future will be built on our leading 5G network, designed for mobility, fixed wireless access and real-time cloud compute. More importantly, we believe that the power of this technology must be accessible for all. Today’s announcement will help us explore ways to bridge that divide and accelerate the benefits and innovation of wireless connectivity, helping benefit our customers on both a global and local scale.”
Amazon CEO Andy Jassy said, “There are billions of people without reliable broadband access, and no single company will close the digital divide on its own. Verizon is a leader in wireless technology and infrastructure, and we’re proud to be working together to explore bringing fast, reliable broadband to the customers and communities who need it most. We look forward to partnering with companies and organizations around the world who share this commitment.”
This partnership will also pave the way for Project Kuiper and Verizon to design and deploy new connectivity solutions across a range of domestic and global industries, from agriculture and energy to manufacturing and transportation. The Kuiper System is designed with the flexibility and capacity to support enterprises of all sizes. By pairing those capabilities with Verizon’s wireless, private networking and edge compute solutions, the two will be able to extend connectivity to businesses operating and deploying assets on a global scale.
Betsy Huber, President, The National Grange said: “The agriculture industry is going to see dramatic changes in how it operates and succeeds in the next several years. Smart farms, bringing technology to agriculture, and connecting the last mile of rural America will be at the forefront of helping our industry to provide food for billions around the globe. Ensuring connectivity in rural areas will be key to making these endeavors a success. We’re excited to see the leadership from both companies working together to help take our industry to the next level.”
Financial analysts at New Street Research said the opportunity could be worth billions of dollars to the two companies. Specifically, they argued that Verizon’s wireless network currently does not cover around 7 million Americans. “If 50% of these people become Kuiper/Verizon customers and assuming Verizon’s phone ARPU [average revenue per user] of ~$60, there could be $2.4 billion in annual revenue,” they wrote.
Amazon and Verizon have previously teamed up to serve customers across many industries, including integrating Verizon’s 5G Edge MEC platform with AWS Wavelength and forming the Voice Interoperability Initiative. This collaboration builds on the relationship between the two companies, and lays the groundwork for Amazon and Verizon to serve additional consumer and global enterprise customers around the world.
Executives from Verizon and Amazon hinted that backhaul is only the start of the companies’ new partnership. They noted that Verizon’s plan to use Amazon’s LEO satellites is just the latest in a long line of pairings between the companies stretching from edge computing to private wireless networks.
“We’ve worked with Verizon on many complex projects over the years,” Amazon SVP David Limp said during a keynote presentation at MWC LA. Limp said Amazon continues to design and build its LEO satellites at the company’s Redmond, Washington, offices.
Verizon’s Chief Strategy Officer Rima Qureshi suggested Amazon and Verizon would explore other offerings beyond cell-site backhaul in the future. She said the companies would pursue “joint solutions” for large enterprise customers in industries stretching from agriculture to energy to education. She also said Verizon and Amazon would look for opportunities both domestically and internationally.
Qureshi noted Verizon’s deal with Nokia to deploy a private 5G network for Southampton in the UK – the largest of the 21 Associated British Ports. She suggested an Amazon-powered satellite component to that offering could extend connectivity beyond the port and into the ocean.
A spokesman for Verizon told Bloomberg it’s a global partnership with Amazon and it’s open to exploring similar deals with other companies, but declined to comment on the finances of the deal.
5G wireless telco’s deals with LEO satellite companies:
This new alliance between Verizon and Project Kuiper comes six weeks after AT&T made a similar deal with LEO satellite operator OneWeb. Just like Verizon, AT&T said it would use that agreement LEO (OneWeb) satellites to extend its connectivity reach to hard-to-serve areas that fall outside of AT&T’s fiber footprint or are beyond the reach of AT&T’s cell towers. AT&T said it would use LEO technology to enhance connectivity when connecting to its enterprise, small and medium-sized business and government customers as well as hard-to-reach cell towers.
In January, KDDI in Japan said it would use Starlink – the LEO offering from Elon Musk’s SpaceX – to connect 1,200 of its remote cell towers with backhaul. KDDI said it would begin offering services under that new teaming as soon as next year.
However, Project Kuiper is way behind both Starlink and OneWeb in terms of satellite deployments. As noted by GeekWire, Starlink already counts 1,650 satellites in orbit (and around 100,000 users), while OneWeb’s constellation is now up to around 358 satellites. Amazon, meantime, has received FCC approvals for the operation of more than 3,000 LEO satellites but has yet to launch any of them. Amazon has committed $10 billion toward the construction of its Kuiper LEO satellite network.
References:
https://www.verizon.com/about/news/5g-leo-verizon-project-kuiper-team
https://www.bloomberg.com/news/articles/2021-10-26/amazon-signs-satellite-pact-with-verizon-in-challenge-to-musk
To learn more about partnering with Amazon and the Project Kuiper team, email [email protected]
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Related Articles:
https://news.kddi.com/kddi/corporate/english/newsrelease/2021/09/13/5400.html
Verizon starts private 5G mobile edge services with Microsoft Azure cloud
Verizon announced the availability of an on-premises, private edge compute service with Microsoft Azure, building on their collaboration formed last year. Verizon 5G Edge with Microsoft Azure Stack Edge is a cloud computing platform that brings compute and storage services to the edge of the network at the customer premises. This should provide enterprises with increased efficiencies, higher levels of security, and the low lag and high bandwidth needed for applications involving computer vision, augmented and virtual reality, and machine learning, Verizon said. Here are the highlights:
- Through its relationship with Microsoft, Verizon is now offering businesses an on-premises, private edge compute solution that enables the ultra-low latency needed to deploy real-time enterprise applications.
- Solution leverages Verizon 5G Edge with Microsoft Azure Stack Edge to bring compute and storage services to the edge of the network at the customer premises, providing increased efficiencies, higher levels of security, and the low lag and high bandwidth needed for applications involving computer vision, augmented and virtual reality, and machine learning.
- Ice Mobility has used Verizon 5G Edge with Microsoft Azure to help with computer vision-assisted product packing to improve on-site quality assurance. The company is now exploring additional 5G Edge applications that provide tangible, material automation enhancements to its business, such as near real-time activity-based costing.
Some of the applications possible with the on-site 5G and edge computing include in-shop information processing in near real time to help retailers manage inventory, or factory data processing and analytics to minimize downtime and gain visibility across manufacturing processes.
Logistics company Ice Mobility has used Verizon 5G Edge with Azure Stack Edge to help with computer vision-assisted product packing to improve on-site quality assurance. The company is exploring additional 5G applications that leverage initial computer vision and 5G edge investments to provide automation enhancements, such as near real-time activity-based costing. This would allow the company to assign overhead and indirect costs to specific customer accounts, pick and pack lines, and warehouse activities to enhance efficiencies and improve competitiveness.
“This announcement aligns with IDC’s view that an on-premises, private 5G edge compute deployment model will spur the growth of compelling 4th generation industrial use cases,” said Ghassan Abdo, Research VP at IDC. “This partnership is a positive development as it leverages the technology and communications leadership of both companies.”
“Our partnership with Microsoft brings 5G Edge to enterprises, dropping latency at the edge, helping critical, performance-impacting applications respond more quickly and efficiently,” said Sampath Sowmyanarayan, Chief Revenue Officer of Verizon Business. “5G is ushering in next-generation business applications, from core connectivity to real-time edge compute and new applications and solutions that take advantage of AI transforming nearly every industry.”
“Business innovation demands powerful technology solutions and central to this is the intersection between the network and edge” said Yousef Khalidi, corporate vice president Azure for Operators at Microsoft. “Through our partnership with Verizon, we are providing customers with powerful compute and storage service capabilities at the edge of customers’ networks, enabling robust application experiences with increased security.”
Verizon offers a similar service with Amazon Web Services (AWS which provides private multi-access edge computing (Private MEC) for enterprises. Private MEC integrates edge computing infrastructure with private networks deployed on or near the customer’s premises.
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References:
https://www.verizon.com/about/node/921923
Watch this video to learn more about how Ice Mobility is using Verizon 5G Edge. Learn more information about Verizon 5G Edge and Verizon’s 5G technology
Amazon AWS and Verizon Business Expand 5G Collaboration with Private MEC Solution
UPDATED: Mid-band Spectrum for 5G: FCC C-Band Auction at $80.9B Shattering Records
The FCC’s latest auction has raised more than $69.8 billion after three weeks of bidding, a record sum that could alter cellphone carriers’ prospects for 5G and the next decade. The C-band auction, offering 280-megahertz of spectrum, started on December 8th. Just within two weeks, it’s by far the biggest U.S. spectrum auction ever. The auction will now pause for the Christmas holidays until Jan. 4th , when total bids could move even higher.
The radio frequencies being offered range between 3.7 GHz and 4 GHz, a middle-of-the-road range considered well-suited for 5G service. New 5G smartphones can already connect to those frequencies in other countries that have licensed equivalent mid-band spectrum. The U.S. is also selling big chunks of spectrum all at once, enhancing its value.
The high offers benefit the U.S. Treasury, which will collect a windfall after the winners pay for their licenses. The victors will also need to spend at least $13 billion more to help modify equipment for a group of satellite companies that already use the frequencies. The satellite operators agreed to an FCC plan that shifts their TV transmissions to a narrower portion of the radio spectrum.
The current auction proceeds have already topped the $44.9 billion in provisional bids in a 2015 FCC sale of mid-band spectrum licenses, which U.S. cellphone carriers used at the time to enhance their 4G LTE service. Those telcos are now investing billions of dollars in 5G coverage. Some higher-end estimates for the auction had ranged from $35.2 to $51 billion.
After 45 rounds, the average nationwide price per MHz PoP price for licenses was of $0.81. That rises to $0.96 across categories when factoring in accelerated clearing payments and relocation costs to move satellite operators out of the band band, estimated at $9.7 billion and $3.3 billion respectively.
Editors Notes: The B block consists of 100 megahertz (five 20-megahertz sub-blocks) from 3.8-3.9 GHz) and the C block makes up the final 80 megahertz with four 20-megahertz sub-blocks; there are 406 available Partial Economic Areas (PEAs) across the United States. 406 available Partial Economic Areas across the United States.
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Analysts had estimated C-band licenses would be between $0.20-$0.50 per MHz PoP (Point of Presence). The nationwide price for A block licenses per MHz Pop was $1.21 as of Wednesday, while BC prices were $1.11 per MHz PoP according to tracking by BitPath COO Sasha Javid.
Demand for most of the category A blocks (which includes the first 100-megahertz tranche of spectrum in 46 of the top 50 markets that has a clearing schedule of December 2021) has evened out. In the top 20 PEAs at the end of round 43 there were still 12 markets that had competition, mostly for BC blocks, but also a few category A, including PEAs of Miami, Phoenix, and Minneapolis-St.Paul.
PHOTO: ADREES LATIF/REUTERS
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The recent bids have blown past Wall Street’s highest forecasts, suggesting that several companies are fighting over the most valuable wireless rights.
There are 57 participants in the clock phase of this auction, but each bid is cloaked in secrecy until the auction process ends. Industry analysts expect mega telcos like AT&T and Verizon Communications to obtain a large share of the licenses to match the trove of 2.5 GHz assets that rival T-Mobile US acquired from Sprint.
Wall Street analyst firms like Wells Fargo, believe Verizon will spend the most, previously estimating around $22 billion in gross proceeds to acquire 120 MHz of mid-band spectrum. AT&T could spend anywhere from $4.3 billion to $20 billion for the C-band.
All three major U.S. wireless carriers have rolled out nationwide 5G either using low-band spectrum or dynamic spectrum sharing (DSS) technology, but performance hasn’t proved better than 4G LTE. Verizon has deployed 5G with high-band millimeter wave in parts of 60 cities, and AT&T has a few mmWave markets, but mid-band is seen as the sweet spot in delivering both capacity and coverage.
Meanwhile, T-Mobile says its 2.5 GHz can deliver 300 Mbps and peak speeds up to 1 Gbps.
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“Mid-band spectrum will be where 5G lives,” said Walt Piecyk, a telecom analyst for research firm LightShed Partners. He added that T-Mobile’s merger with Sprint “clearly put pressure on Verizon and AT&T” to match their rival’s war chest. “When the numbers get this big, you have to assume that everybody’s getting more aggressive,” Mr. Piecyk said.
“Gross proceeds have been driven by surprisingly robust and persistent demand,” wrote Javid in an analysis Tuesday morning. “In Round 36, I suspect that a large bidder pulled back significantly in the largest markets given that all the top 10 markets experienced a drop in demand.”
Mobile service providers are also bidding against investment firms and new market entrants. Satellite provider Dish Network Corp. won many of the licenses sold in the 2015 auction. The company this month raised more cash through a $2 billion convertible-note offering to help fund more network investments. Dish is building its own 5G network after buying spectrum assets and about 8 million customers from Sprint.
Cable internet providers (MSOs) could also influence the auction’s outcome after years of experimentation with wireless services. Comcast Corp. and Charter Communications Inc. teamed up to bid in the current auction after they spent nearly $1 billion on a smaller license sale earlier this year.
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Cellphone carriers can afford to commit to big payments given their low borrowing costs and relatively stable service revenue (AT&T is an exception due to its high debt), said Raymond James analyst Frank Louthan. “Investors see these companies as some of the most secure around,” Mr. Louthan said. “I don’t think a slight change in a debt ratio would make much of a difference. Time to market matters. We generally see prices get high when you can deploy spectrum quickly.”
The FCC won’t reveal the auction’s winners for several days after the auction ends, meaning the broader telecom industry could remain in suspense until February. Federal rules against coordinated bidding also limit what the auction participants can say about the process, restricting their ability to raise capital or discuss major deals involving spectrum.
The auction is a first step in a multiyear process. Wireless customers might not see the full band cleared for cellphone service until late 2023, though there is an early tranche slated to move by late 2021. Auction winners with no time to spare could also pay the incumbent satellite users larger fees to quicken their relocation. That would allow some companies to repurpose spectrum in base stations and related cell-tower equipment that is already transmitting data on other frequencies–just not the bands in question. The change could result in faster and more reliable 5G service.
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This author is astonished there has been no concern expressed regarding C-Band Auction’s Threat to Aviation. Viodi View principal Ken Pyle wrote:
The RTCA is recommending that the mobile wireless and aviation industries work with their respective regulators to take appropriate steps to mitigate the risk associated with the deployment of 5G in the C-Band. The question is what impact will this interference risk have on the rollout of 5G in the C-band?
It will be interesting to see how the potential interference risks raised by RTCA impact the rollout of 5G in the C-Band.
On December 7th, Reuters reported that House Committee on Transportation and Infrastructure Chair Peter DeFazio urged a delay in the FCC auction of C-Band spectrum over concerns it could jeopardize aviation safety. He cited a six-month review of 5G network emissions with safety-critical radio altimeter performance by the Radio Technical Commission for Aeronautics (RTCA) that found serious risks of harmful interference on all types of aircraft.
Caveat Emptor!
References:
https://www.wsj.com/articles/5g-auction-shatters-record-as-bidding-tops-66-billion-11608731335 (on-line subscription required)
https://www.fiercewireless.com/5g/c-band-nears-70b-rockets-above-prior-us-spectrum-auctions
https://www.rcrwireless.com/20201223/spectrum/fccs-auction-holiday-haul-closing-in-on-70-billion
https://viodi.com/2020/11/30/c-band-5gs-threat-to-aviation/
https://www.wsj.com/articles/everything-you-need-to-know-about-5g-11605024717
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January 18, 2021 Update:
The Federal Communications Commission has completed the first round of the auction of the 3.7-3.98 GHz band, raising the most ever in a spectrum auction in the US. All 5,684 blocks on offer were acquired, with total bids of USD 80.9 billion, nearly twice the previous record for a FCC auction.
Samsung introduces 5G mmWave small cell for indoor use with Verizon as 1st customer
Samsung Electronics unveiled a new integrated 5G mmWave small cell for indoor use as part of the company’s full suite of 5G in-building products, Samsung Link. Samsung said its new 5G indoor small cell dubbed “Link Cell” will help provide enhanced 5G experiences to users in indoor environments. It provides 5G-powered applications within enterprises, including manufacturing or distribution facilities, corporate offices, and entertainment or public venues (such as shopping centres, stadiums or hotels). Link Cell is among the first commercial products available globally that provides wireless operators with a mmWave indoor small cell. It includes the Qualcomm 5G RAN platform, which builds on the collaboration between Qualcomm Technologies and Samsung.
Durga Malladi, Senior Vice President and General Manager, 4G/5G, Qualcomm Technologies said:
“Small cells are an excellent vehicle to deliver the incredible speed, capacity and low latency benefits of 5G mmWave to indoor locations. We are very pleased to continue our long standing relationship with Samsung to support development of high-performance 5G small cell infrastructure that addresses the challenging power and size requirements for enterprise deployments, using Qualcomm Technologies’ 5G RAN Modem-RF technology.”
Link Cell gives wireless network operators a way to extend 5G service into businesses and venues. It’s also a critical component for future private 5G networks in enterprises, such as manufacturing, healthcare, retail and warehouse facilities. That’s a market segment AT&T wants to penetrate for its 5G services, including extending their 5G network indoors.
Photo Credit: Samsung Electronics
Verizon will be the first U.S. wireless network operator to commercially deploy Samsung’s Link Cell, which the wireless provider will use to extend the footprint of its 5G Ultra Wideband network. This marks a new phase in delivering enterprise private 5G networks, and advancing next generation mobile technology use cases and applications. Verizon recently said lab trials were underway with Samsung to test the product, along with field tests of an in-building 5G cell site from Corning.
The first version of Samsung’s Link Cell will support 28GHz and has the functionality to combine four 100MHz bandwidth of frequencies, offering high capacity and ultra-fast download speeds. Moreover, it brings together a radio, antenna and digital unit into one compact box, and is less than 4 liters in volume, one of the smallest in the industry.
Link Cell offers fast and easy indoor installation; it can be discretely placed on walls or ceilings, similar to a Wi-Fi access point, while minimising noise through fanless convection cooling. Designed to self-organise, Link Cell will adjust for optimal RF performance, allowing mobile applications to operate within a facility or—as applications transition from a macro 5G network outside to the in-building network—maintain high-quality communications continuity. Link Cell is available now for wireless operators to purchase for use in commercial rollouts.
Commenting on the Link Cell, Jaeho Jeon, Executive Vice President and Head of R&D, Networks Business at Samsung Electronics, said:
“Today, we are excited to unveil Samsung Link for wireless operators to expand the capabilities of 5G networks and seamlessly link together outdoor and indoor 5G experiences. As one of the first commercial 5G mmWave indoor small cells, Link Cell will enable wireless operators and enterprises to bring 5G services to various offices, facilities and venue locations.”
“Verizon continues to rapidly advance our 5G deployment, and the addition of indoor cell sites will extend the availability of the fastest 5G service in the U.S. This is a key step in providing industry-changing, scalable, latency-sensitive, robust 5G solutions for enterprises,” said Adam Koeppe, senior vice president of Technology Planning and Development at Verizon, in a statement. “The addition of indoor cell sites will extend the availability of the fastest 5G service in the U.S,” he added.
Verizon was the first to deploy Samsung’s 5G NR integrated mmWave access unit, which helped hit 4.2 Gbps speeds during a live network demo in February. Samsung is also working with Verizon on network virtualization, providing its commercial 5G vRAN solution. That might be part of the $6.65B contract Samsung recently was awarded by Verizon.
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The new Samsung Link portfolio features several products to help businesses address indoor 5G service needs. In addition to Link Cell, Samsung will deliver products supporting other indoor needs and spectrums. Link Hub and Link HubPro provide low and mid-band support to operators and enterprises.
Link Hub is designed for venues with existing Distributed Antenna Systems (DAS), providing low and mid-band 5G service across an existing in-building infrastructure. Link HubPro is an active antenna system, which includes a hub and indoor radios for mid-to-large enterprises with support for various spectrum options. Link Hub and Link HubPro are expected to begin commercial rollouts beginning 1Q 2021.
References:
https://news.samsung.com/us/5g-indoor-mmwave-small-cell/
https://www.neowin.net/news/samsung-reveals-its-indoor-5g-small-cell-solution/
https://www.fiercewireless.com/tech/samsung-debuts-indoor-5g-mmwave-small-cell
FCC: Verizon, T-Mobile, and US Cellular exaggerated 4G-LTE coverage maps + 5G Fund for Rural America
FCC Investigation finds that three wireless network operators exaggerated coverage maps for rural areas:
In its MOBILITY FUND PHASE II -COVERAGE MAPS INVESTIGATION report, the FCC concluded that: “that 4G-LTE coverage maps submitted by Verizon, U.S. Cellular and T-Mobile overstated their coverage and thus were not accurate reflections of actual coverage.”
As part of the Mobility Fund Phase II, mobile network providers were given U.S. federal support for deploying 4G-LTE services to rural and underserved areas. That initiative was supposed to bridge the digital divide between the served and underserved U.S. population. As part of the agreement, the mobile providers were obliged to provide accurate coverage maps to ensure the federal government cash they were receiving was being spent to provide better coverage to their under-served and unserved customers.
The FCC said that U.S. mobile network providers are responsible for submitting accurate coverage maps in accordance with the Commission’s rules and orders. In response to these concerns and based upon a preliminary FCC staff review of the challenger data, the Commission launched an investigation into whether one or more major mobile network providers violated the requirements of the one-time collection of coverage data.
The investigation was led by the Rural Broadband Auctions Task Force in coordination with the Office of Economics and Analytics, Enforcement Bureau, Wireless Telecommunications Bureau, Wireline Competition Bureau, and the Office of Engineering and Technology. FCC staff initially requested information directly from several providers in order to understand providers’ mapping processes, and later issued subpoenas to Verizon and U.S. Cellular.
This FCC investigation discovered that the MF-II coverage maps submitted by Verizon, U.S. Cellular, and T-Mobile likely overstated each provider’s actual coverage and did not reflect on-the-ground performance in many instances.
Only 62.3% of staff drive tests achieved at least the minimum download speed predicted by the coverage maps—with U.S. Cellular achieving that speed in only 45.0% of such tests, T-Mobile in 63.2% of tests, and Verizon in 64.3% of tests. Similarly, staff stationary tests showed that each provider achieved sufficient download speeds meeting the minimum cell edge probability in fewer than half of all test locations (20 of 42).
In addition, FCC staff was unable to obtain any 4G LTE signal for 38% of drive tests on U.S. Cellular’s network, 21.3% of drive tests on T-Mobile’s network, and 16.2% of drive tests on Verizon’s network, despite each provider reporting coverage in the relevant area.
In other words, these three mobile network operators were not spending federal money as promised. Worse, is that they were effectively lying to the FCC and their subscribers (or potential subscribers) in the geographical areas with inaccurate coverage maps.
Astonishingly, the FCC does not currently have any plans to punish (via fine or reduce future subsidies) these three mobile operators. Yet the FCC said that “inaccurate data jeopardize the ability of the Commission to focus our limited universal service funds on the unserved areas that need the most support.”
Instead of punishment, the FCC Rural Broadband Auctions Task Force made the following recommendations:
First, the Commission should terminate the MF-II Challenge Process. The MF-II coverage maps submitted by several providers are not a sufficiently reliable or accurate basis upon which to complete the challenge process as it was designed. The MF-II Challenge Process was designed to resolve coverage disputes regarding generally reliable maps; it was not designed to correct generally overstated coverage maps. 7.
Second, the Commission should release an Enforcement Advisory on broadband deployment data submissions, including a detailing of the penalties associated with filings that violate federal law, both for the continuing FCC Form 477 filings and the new Digital Opportunity Data Collection.
Editor’s Note: The Commission relies upon coverage maps submitted by providers in accordance with data collection rules and specifications adopted through notice and comment rulemakings. For almost two decades, the Commission has relied on FCC Form 477 to collect data on mobile services.
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Overstating mobile broadband coverage misleads the public and can misallocate our limited universal service funds, and thus it must be met with meaningful consequences.
Third, the Commission should analyze and verify the technical mapping data submitted in the most recent Form 477 filings of Verizon, U.S. Cellular, and T-Mobile to determine whether they meet the Form 477 requirements.
Fourth, the Commission should adopt policies, procedures, and standards in the Digital Opportunity Data Collection rulemaking and elsewhere that allow for submission, verification, and timely publication of mobile broadband coverage data. Mobile broadband coverage data specifications should include, among other parameters, minimum reference signal received power (RSRP) and/or minimum downlink and uplink speeds, standard cell loading factors and cell edge coverage probabilities, maximum terrain and clutter bin sizes, and standard fading statistics. Providers should be required to submit actual on-the-ground evidence of network performance (e.g., speed test measurement samplings, including targeted drive test and stationary test data) that validate the propagation model used to generate the coverage maps. The Commission should consider requiring that providers assume the minimum values for any additional parameters that would be necessary to accurately determine the area where a handset should achieve download and upload speeds no less than the minimum throughput requirement for any modeling that includes such a requirement.
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In a call with reporters, a senior FCC official said that commission staff was unable to determine whether the carriers’ exaggerations were deliberate. The official said that the investigation did not establish a clear violation of a specific rule. The FCC official said that maps submitted by carriers were based on industry-standard propagation models and that the FCC’s own tests made it clear that those industry models do not reflect on-the-ground experience.
U.S. Cellular said it had warned that the FCC’s directions for the coverage maps would result in overstated coverage, and said the staff report comes as “no surprise.”
The company “faithfully implemented” the FCC’s requirements for the coverage maps it submitted but recognizes “better and more accurate maps are necessary,” said Grant Spellmeyer, vice president of federal affairs and public policy for the carrier.
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FCC to Launch $9 billion 5G Fund for Rural America:
In a related press release, the FCC will create a new fund which will make $9 billion available to ensure 5G connectivity reaches underserved areas that have been largely neglected by the large nationwide U.S. wireless operators.
“5G has the potential to bring many benefits to American consumers and businesses, including wireless networks that are more responsive, more secure, and up to 100 times faster than today’s 4G LTE networks,” said Chairman Pai in the aforementioned press release. He added:
“We want to make sure that rural Americans enjoy these benefits, just as residents of large urban areas will. In order to do that, the Universal Service Fund must be forward-looking and support the networks of tomorrow. Moreover, America’s farms and ranches have unique wireless connectivity needs, as I’ve seen across the country. That’s why I will move forward as quickly as possible to establish a 5G Fund that would bring next-generation 5G services to rural areas and would reserve some of that funding for 5G networks that promote precision agriculture. We must ensure that 5G narrows rather than widens the digital divide and that rural Americans receive the benefits that come from wireless innovation.”
The new 5G Fund would replace the planned Mobility Fund Phase II, which would have provided federal support for 4G LTE service in unserved areas. Pursuant to the Mobility Fund Phase II rules, wireless providers were required to submit 4G LTE coverage data in order to help the Commission target federal subsidies to unserved parts of the country.
Editor’s Note:
The smaller, rural wireless network providers (some of whom use Huawei gear) have long complained the nationwide, larger wireless operators were exaggerating coverage maps. These coverage maps helped the FCC determine who should get a slice of the $4.5 billion reserved for the Mobility Fund Phase II fund.
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Questions to Ponder:
What is being done to make sure the same abuses do not reoccur in the new 5G Fund for Rural America?
Can these three telco exaggerators be trusted to appropriately spend their allocation of the $9 billion moving forward?
Is FCC enforcement a thing of the past, now that net neutrality is gone?
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Closing Quote:
Michael Copps, Former FCC Commissioner and Common Cause Special Adviser had this to say:
“With its latest announcement to deploy 5G in rural America, the FCC continues its smoke and mirrors show to cover up the poor state of broadband deployment in the nation.
“First, many parts of the country – both urban and rural – lack 4G or any type of wireless connectivity at all. The FCC has systematically failed to address the wireless broadband needs of many communities but chooses to put the cart before the horse with another announcement on 5G.
“Second, the FCC buries the real story in its announcement – wireless carriers have greatly exaggerated their coverage maps, helping paint an inaccurate picture of who has access to broadband. The FCC has known the maps have been bad for quite some time but chose to do nothing. Even with its latest findings that carriers lied about coverage maps, the FCC has not leveled any fines or held the companies accountable in any way. This points to a larger problem regarding the FCC’s failure to provide the public with granular and accurate broadband maps. If we can’t even determine who does and does not have access to broadband, we can’t sufficiently close the digital divide.
Third, the agency is seemingly not providing any new funding to deploy 5G. Rather, it is terminating the current funding mechanism to deploy 4G only to open a new one for 5G. Moving a pot of money around shows that the FCC lacks a clear strategy and vision to deploy 5G nationwide. It is these kinds of zig-zags and diversions on broadband that make our country such an outlier when it comes to broadband penetration.”
References:
https://docs.fcc.gov/public/attachments/DOC-361165A1.pdf
Verizon CEO Hans Vestberg CES Keynote: a Magic Show of 5G Hype
At yesterday’s long winded CES keynote, Verizon CEO Hans Vestberg promised that 5G technology will dramatically impact all aspects of the economy. As others before him have said, “5G will usher in a 4th industrial revolution.” It will also be “a quantum leap compared to 4G” and “5G changes everything,” he said.
Yet none of those claims can be proven, because standardized 5G (based on IMT 2020) won’t be deployed till late 2020 or early 2021. Verizon’s version of 5G is based on the carrier’s proprietary V5GTF spec. Moreover, residential fixed wireless broadband (which Verizon has deployed in several U.S. cities with many more coming in 2019) isn’t even a use case for IMT 2020!
During the keynote, Vestberg introduced the eight “currencies” of 5G that will unleash highly connective technologies and blend physical and digital realms like never before – from AR and VR to IoT, AI, autonomous vehicles, advanced robotics, 3D printing, wearable tech and more.
The eight currencies are:
- Speed and Throughput: Peak data rates of 10 gigabits per second and mobile data volumes of 10 terabits per second per square kilometer
- Mobility, Connected Devices and Internet of Things: Mobile devices traveling at up to 500 kilometers per hour can potentially stay connected on a 5G network, and up to one million devices can be supported by 5G in a square kilometer
- Energy Efficiency and Service Deployment: 5G network equipment and devices will consume only 10% of the energy consumed by 4G network equipment and devices, and specialized services that will operate on the 5G network will take much less time to implement
- Latency and Reliability: Five millisecond end-to-end travel time of data from the mobile device to the edge of the 5G network – faster than the blink of an eye, and 5G will be more than 99.999% reliable
Vestberg added that Verizon’s ability to deliver all eight currencies of 5G is dependent on its fiber, spectrum, network density, and real estate – and that companies lacking these assets are underestimating what it will take to provide true 5G service. “Anyone who thinks 5G is just for the mobile handset is thinking too small.”
Verizon CEO Hans Vestberg discusses 5G at the 2019 CES. Image Credit: Jeremy Horwitz/VentureBeat
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To add credibility to his claims, Vestberg shared the CES stage with a diverse set of industry partners, including the New York Times, Walt Disney Studios, a doctor from the medical technology company Medivis and Verizon-owned drone operation company Skyward. There was also a carnival style basket shoot by a member of the L.A. Lakers using Virtual Reality goggles with the image provided by Verizon’s version of 5G.
Each partner spoke of how 5G will transform their business. For instance, the New York Times is opening a “5G journalism lab” with Verizon. NY Times CEO Mark Thompson (a Brit) expects that it will transform the way the publication’s journalists gather news, as well as how it distributes the news — notably including more VR and AR content.
Verizon is separately partnering with Walt Disney’s StudioLab to explore how next-generation connectivity can improve Disney’s content production and transmission. Walt Disney Studios CTO Jamie Voris took the stage to say that his company will be working with Verizon to give Marvel, Pixar, Disney, and LucasArts filmmakers early access to 5G innovations. Six months ago, Disney’s StudioLab was created in Burbank to figure out how to do things like improve rendering speeds for digital effects and use drones to advance cinematography. Now Verizon has joined StudioLab as a core innovation partner and will help Disney work on 5G cloud-based production workflows, 5G-connected movie standees and posters, and volumetric performance capture.
Skyward President Mariah Scott said that Verizon is committed to being the first to connect 1 million drone flights on its 5G network. Vestberg used a tablet in the keynote venue at the Venetian to pilot a drone in Los Angeles through a 5G connection. Ms. Scott mentioned the promise of using 5G-powered drones for industrial uses. “The ability to gather data and analyze it in real time is what will change things,” Scott said.
Dr. Christopher Morley (MD) of Medivis spoke about the impact of 5G on medical science, including how 5G could help the medical community rethink the connections between patients and caregivers — bringing people together and changing the way doctors provide care. He also offered a powerful tangible example of how 5G and AR will work together in medical procedures. However, there was no mention of 5G being able to deliver the low latency and high quality imaging that AR requires.
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To expand its network of partners, Vestberg announced Verizon is launching a 5G innovation challenge, offering up to $1 million in seed money for the best applications of the technology. It’s called the Verizon “5G Challenge.”
Verizon last October said it launched “the world’s first commercial 5G service” with 5G Home, a fixed wireless service for residential customers. It offers theoretical peak throughput speeds of 1Gbps. During the keynote, Vestberg made a video call to Clayton Harris of Houston, Texas, the first 5G Home customer. Harris ran a speed test from his home, reaching 690 Mbps. He said he normally sees between 600 Mbps and 1 Gbps, with speeds at times reaching as high as 1.3 Gbps.
Vestberg said he ultimately wants to see an easier installation process for its 5G Home service– one that you can install yourself. That will be a very difficult endeavor indeed. For example, there is an outdoor antenna (RF transmitter/receiver) that has to be mounted outside, possibly run wires through walls, floors or ceilings, configure 5G router settings, and (if needed) Wi-Fi extenders will be installed in the home, at no charge, to ensure adequate Wi-Fi coverage for the entire house. Here’s the complete 5G Home installation procedure:
The Asurion technician will complete the following installation process for your 5G Home service and connect your devices:
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- Verify and explain the areas in your home where the 5G signal is received.
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- Conduct a test to determine whether the 5G receiver can be installed inside or outside your home. The strength of the 5G signal can vary inside and outside your home.
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- Conduct a test of the Wi-Fi signal strength of each device throughout the house that is connected to the 5G Home Router. A Wi-Fi extender may also be installed at no charge to strengthen the Wi-Fi signal throughout your house or for devices that have a weak Wi-Fi signal.
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- Install the receiver, with your approval, either inside or outside on the side of your house.
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- Depending on the locations of the receiver and the router, the technician may need to run wires through walls, floors or ceilings.
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- Ensure that all your previously Wi-Fi connected devices are now connected to your Verizon 5G Home Router.
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- Demonstrate how you can use the My Verizon app to manage your router, such as how to restart it when you are away from home, and check the signal strength of the devices connected to the router.
–>Do you really think a non technical person can do such a self install?
SCWS Americas: Verizon and AT&T 5G Roadmaps Differ on FWA vs mobile “5G”
Verizon has no plans for linear or on-demand (or any other form) of pay TV for its “5G” FWA (Fixed Wireless Access) based residential/Verizon Home broadband service, according to Bill Stone, the company”s VP of technology development and planning. Stone stated that in a question from this author (during the Q&A session after his second presentation) at the excellent SCWS Americas conference in Santa Clara, CA on December 5, 2018. Instead, Verizon has a partnership with YouTube TV (first three months free) to provide OTT video to its FWA customers. Verizon Home customers get a free Apple TV 4K or Google Chromecast Ultra (Internet TV adapters with HDMI connection to the customer’s TV) when they sign up for 5G Home service.
Stone also said that Verizon’s FiOS will continue to offer higher speeds than its 5G Home service, which will transition from its proprietary “5G TF” spec to 3GPP release 15 5G NR NSA (non stand alone) in the near future. He told me privately that any wireless base station vendor that supports 5G NR would be able to interoperate on the carrier’s 5G FWA network (we don’t think so for many reasons). Verizon’s 5G Home service is currently available in Houston, Indianapolis, Los Angeles and Sacramento.
Stone noted with pride that the mega carrier continues to bolster its 4G LTE network with new technologies. “LTE has a lot of runway left,” Bill said to the audience.
Verizon currently says that customers of its 5G Home service will receive download speeds of at least 300 Mbps. A video was shown of satisfied customers who all got download speeds of 800 Mbps or higher. The mega carrier said that speeds can range up to 1 Gbps depending on customers’ location in relation to the towers for the service.
Verizon currently charges new customers $70 per month for 5G Home service, but only $50 per month for existing customers (with 1st three months free) who also subscribe to the carrier’s $30/month mobile data plan. Voice is offered along with high speed Internet access, but no pay TV is available as with FiOS.
“The peak data rates here in millimeter-wave will definitely increase,” Stone told the audience. Verizon currently runs its 5G Home service in its 28 GHz licensed spectrum in 400 MHz channels. But he said the carrier has the ability to increase that spectrum allotment to 600 MHz and 800 MHz channels (Verizon owns huge amounts of millimeter-wave spectrum via its purchases of XO and Straight Path). Stone explained that expanding the service’s spectrum channels would both increase user speeds and increase Verizon’s network capacity. Verizon will move from 400 MHz to 800 MHz, and that will result in the speeds and capacity available would double as a result.
Currently, the antennas and receivers for Verizon’s Home broadband service are installed by “white glove” professional technicians. In the future, the carrier is planning to offer a self-installation option for its 5G Home service. “Over time the goal is to introduce the ability to drop ship equipment that the customer can install on their own,”
Stone said, without providing a timeline for such a move. tone touched on several other data points for its FWA home broadband service:
- 50% of Verizon’s 5G Home customers do not subscribe to the operator’s mobile service.
- The service can transmit 1 Gbps downstream up to 3,000 feet.
- The millimeter-wave service works in conditions including rain, snow and non-line-of-sight scenarios. Indeed, Stone said some transmissions work better in non-line-of-sight scenarios than when customers are within sight of the tower, due to the fact that millimeter-wave transmissions can reflect off various objects in order to reach their intended destination.
- Verizon’s 5G Home customers are switching to the carrier from a variety of other service providers, though no details were provided.
- Verizon ultimately expects to expand 5G Home to 30 million households at some unspecified time in the future, though Dunne said the carrier may revisit that figure as the company’s rollout progresses.
- Verizon won’t build any more locations with its 5GTF equipment, and will instead wait for 3GPP release 15 5G NR equipment to become available before expanding to additional neighborhoods and cities. However, the implementation of 5G NR by vendors will initially be non stand alone (NSA), which means its dependent on a LTE core network and LTE signaling. That may differ amongst wireless base station vendors as will the frequencies used for different 5G NR carrier networks.
- Verizon is making significant progress toward implementing vRAN technology on its 5G network, working with its vendors—including Ericsson, Samsung and Nokia—to virtualize the lower layers of its network in addition to the upper layers. The process of virtualizing the baseband functions in the RAN is part of a broader trend in the wireless and wider telecom industry in which operators are increasingly looking to move away from expensive, dedicated hardware from traditional suppliers and toward general-purpose compute servers running (mostly) open source software.
- Verizon remains interested in providing edge computing services, services he said the operator could sell to companies looking to provide offerings ranging from drones to autonomous vehicles. Verizon’s efforts in edge computing stem from the carrier’s moves to densify its network and to virtualize parts of its network functions. Those efforts, Stone said, would create a foundation for Verizon to eventually run edge computing sevices for third parties.
5G Home is one of many services Verizon plans to offer via 5G network technology with mobile 5G (again, based on 3GPP release 15 “5G NR”o NSA) being the next “5G” offering. When mobile “5G” is deployed in the 11st half of 2019, the Motorola moto z3 smartphone, paired with the 5G moto mod and a Samsung 5G smartphone will be available. So will an Inseego 5G hotspot that can access Verizon’s mobile network.
Addendum: 5G is one network, multiple use cases, Verizon CEO says
Last week at the UBS Global Media and Communications Conference, Verizon CEO Hans Vestberg touted the carrier’s 5G home residential broadband service as complementing its wired Fios offering while extending the ability to provide a wireless alternative to home connectivity. While the fixed wireless access service is only available in four markets, the carrier said half of the customers are new to the company.
In a discussion with John Hodulik of UBS Investment Bank and HSBC analyst Sunil Rajgopal, Vestberg said 5G Home comes with a guaranteed 300 Mbps but its millimeter wave spectrum can support up to 800 Mbps or 900 Mbps.
“It’s a totally different way to doing broadband, meaning, instead of having a cord into the house, you have a wireless wave into the house, but the experience is the same in the house. And I think that’s a big opportunity for us. We have one footprint of Home, and that’s the Northeast where we have our Fios footprint. For the rest of the country, we don’t have it. So of course, we see that as an opportunity.”
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In a SCWS Americas keynote speech, title “Building our 5G network,” Al Burke, AT&T Assistant Vice President – RAN Hardware and Software Development, described the progress the carrier has made in upgrading its network for 5G. The key points he made were:
- 5G will facilitate and support new applications such as VR/AR, remote surgery (Bill said he doesn’t want to be one of the first patients), connected cars, etc.
- Small cells will be an integral part of 5G networks and “bring them to fruition”
- By the ned of 2017, 55% of AT&Ts network functions were virtualized (I take that to mean they were implemented as software running on commodity compute servers)
- There have been huge shifts in AT&Ts network in the last few years:
1. From hardware to software implementations (e.g SDN, NFV);
2. From centralized to decentralized control (e.g. EDGE computing)
3. From observation (of network events, alerts, alarms) to insight via AI/ML (e.g.AT&T’s INDIGO)
- Open RAN (ORAN) is the way to move forward. Via disaggregation of RAN functions with well defined interfaces, ORAN is “open, modular, enables automation, and is lower cost. ORAN results in interchangeable network modules (from different vendors) vs vendor proprietary equipment.
AT&T’s 5G Roadmap (only mobile 5G was shown on Al Burke’s slide – nothing on fixed 5G):
- 2019: 5G NR access with LTE Core network and LTE Access (=signaling?). The spectrum for AT&Ts initial mobile 5G rollout was not disclosed, but many believe it will be mmWave.
- 2020-2022+: 5G NR access with 5G Core network (3GPP Release 16 SA or IMT 2020?); also LTE Core with LTE Access
- 2019-2022+: mmWave NR : Evolution to Ultra High Speed and lower latency
- End of 2019-2022+: (unspecified time frame?), AT&T will provide sub 6 GHz 5G coverage in the U.S. speed and latency; dedicated & shared spectrum (LTE-NR-Coexistence)
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When AT&T introduces its “5G” FWA residential service it will be based on LTE, according to Mr. Burke. In answer to a question from this author during the Q&A session, he said it would start as LTE but then transition to 5G NR based FWA. The spectrum to be used was not revealed, but you can assume it will be mmWave (like Verizon’s 5G Home).
Author’s Closing Comments:
A claim we’ve heard before (by Ericsson and Vodafone), but don’t believe: LTE network and terminal equipment will upgrade to 5G NR via “only a software upgrade.”As noted many times by this author and others,
AT&T has repeatedly stated they would roll out “standards based 5G” in 12 cities by the end of 2018 (they have only 3 weeks to fulfill that promise) and 19 cities in 2019. Some of the cities identified by AT&T for the 2018 launch include Houston TX, Dallas TX, Atlanta TX, Waco TX, Charlotte NC, Raleigh NC, Oklahoma City OK, Jacksonville FL, Louisville, KY, New Orleans LA, Indianapolis IN, and San Antonio TX.
How long can AT&T claim their “5G” network is standards based when they only support 3GPP release 15 “5G NR” NSA access with a LTE core network and LTE signaling? The ONLY 5G RAN/RIT standard is IMT 2020 which won’t be completed till the end of 2020.
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Fierce Wireless writes about what to expect from AT&T’s 5G mobile service. We’d like to know How much will it cost? And who will subscribe when only a WiFi hotspot with 5G backhaul is offered?