Huawei 5G Rig at Elisa 230Pal Zarandy, an always interesting analyst, tested Elisa's "world's first" 5G network from inside his office and outside with line of sight. The results were as expected: 5G at 3.5 GHz and Massive MIMO performs about the same as a good 4G network. "Gigabit LTE" - with tested speeds in the low or mid hundreds of megabits - has been shipping since 2016. Adding a minor software tweak, NR, and calling it "5G" did little to improve performance. (The battle to limit the term "5G" to true high-speed millimeter waves has been lost, unfortunately.) This is the dirty secret of "5G." Almost all the claimed new uses can be met with 4G. Anyone who doesn't know that should ask an engineer.

The Elisa results are important because they confirm that Massive MIMO makes 3.5 GHz spectrum practical to use. Pal writes:

"I think this is the key: 'Compared to gigabit LTE, the game changer features of the 3.5 GHz band won’t be single user speeds but instead the aggregate mobile data network capacity. This we couldn’t (and were not planning to) test, but Elisa’s network experts confirmed our views.'

Using 64 transmit antennas, Elisa in 3.5 GHz spectrum is getting throughput in a range similar to 8 antennas in 1.8 GHz. Without far more data, I can't be more specific than that. It may turn out that 100 Mhz in 3.5 GHz delivers about the same capacity as 60 MHz in lower bands. Because higher frequency antennas are smaller, even 128 antennas can be a reasonable size and not prohibitively expensive. 

Between 3.5 GHz and 4.2 GHz is enough spectrum to roughly double the capacity of today's networks.

Most of that spectrum is very lightly used. With political will, it could be made quickly available.

Less than half the capacity is being used at Verizon, AT&T, Sprint, and probably most other networks around the world (except India.) Verizon hasn't implemented 4x4 MIMO across most of the network yet and is only using 50-60% of their spectrum. Add a modest number of small cells to fill in where needed, Bring in 3.5-4.2 GHz.

The increase in capacity could be 5-10X with about today's level of capex or lower and without much mmWave. Traffic growth in the U,S. in 2017 was only 15% according to the telcos at CTIA, but I think that's an anomaly. A more realistic assumption for surprise-free demand is growth about 30%/year. Put another way, most telcos could meet the demand they expect until 2025 or 2030 without going to millimeter wave. That's why very few, including almost no one in Europe, intends large mmWave builds at this time. 

Surprises happen, of course. Hans Vestberg at Verizon is determined to use the capacity of his mmWave network to knock down the competition. That would blow any current projections.

 

dave askOn Oct 1, Verizon will turn on the first $20B 5G mmWave network, soon offering a gigabit or close to 30M homes. The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while keeping capex at around 15%.

The Koreans, Chinese, and almost all Europeans are not doing mmWave in favor of mid-band "5G," with 4G-like performance. Massive MIMO in either 4G or "5G" can increase capacity 4X to 10X, including putting 2.3 GHz to 4.2 GHz to use. Cisco & others see traffic growth slowing to 30%/year or less. Verizon sees cost/bit dropping 40% per year. I infer overcapacity almost everywhere.  

The predicted massive small cell builds are a pipe dream for vendors for at least five years. Verizon expects to reach a quarter of the U.S. without adding additional small cells. 

In the works: Enrique Blanco and Telefonica's possible mmWave disruption of Germany; Believe it or don't: 5G is cheap because 65% of most cities can be covered by upgrading existing cells; Verizon is ripping out and replacing 200,000 pieces of gear expecting to save half. 

-------------------

 5G Why Verizon thinks differently and what to do about it is a new report I wrote for STL Partners and their clients.

STL Partners, a British consulting outfit I respect, commissioned me to ask why. That report is now out. If you're a client, download it here. If not, and corporate priced research is interesting to you, ask me to introduce you to one of the principals.

It was fascinating work because the answers aren't obvious. Lowell McAdam's company is spending $20B to cover 30M+ homes in the first stage. The progress in low & mid-band, both "4G" and "5G," has been remarkable. In most territories, millimeter wave will not be necessary to meet expected demand.

McAdam sees a little further. mmWave has 3-4X the capacity of low and mid-band. He sees an enormous marketing advantage: unlimited services, even less congestion, reputation as the best network. Verizon testing found mmWave rate/reach was twice what had been estimated. All prior cost estimates need revision.

My take: even if mmWave doesn't fit in your current budget, telcos should expand trials and training to be ready as things change. The new cost estimates may be low enough to change your mind.