Telefonica Blanco 8 4 layers 230Enrique Blanco of Telefonica is collapsing his transport network from 8 to 4 layers. Lee Hicks of Verizon is "Ripping out 200,000 pieces of equipment as part of Verizon One Fiber." He is replacing them with one-tenth as many boxes. Cost and simplicity are the main goals, but latency is being dramatically improved as well.

I've recently discovered that the latency of the radios for the last 200 metres (the 5G NR) often is less important than the performance on the backbone. From the radio to the Internet typically takes 15 ms to 50 ms and more. 5G to the radio is now typically 10 ms, compared to 20 ms on LTE. That saves about 10 ms. 

A better backbone (or an Edge Cloud) can reduce latency by 10-30 ms. Today's routers are much more powerful and much faster. Like most incumbent telcos, Verizon's network was loaded with out of date equipment, some 20 years old. Most carriers are slowly replacing older gear. Verizon One Fiber is replacing almost everything.   Lee Hicks of Verizon is rebuilding that network with a goal of 5-15 ms.

(That number is mine. Neither Lee nor anyone else at Verizon has discussed a figure. I'm inferring it from the capabilities of the equipment.) That will generally save 10-30 ms, more than the improvement with 5G radios.  "At the end of the day, I'm going to have about a 90% reduction in routers in the network. I'm going to be left with a dramatically smaller amount of equipment. I'm going to have about 10% of what I have today by the time we're done." (Over the years, Verizon built separate networks for wireline, wireless, corporate data, ...)  One Verizon is delivering results. The new equipment "saves half" just in the first year. Overall, Verizon is reducing cost per bit by about 40% per year. As traffic growth slows towards 30%, margins are likely to expand.  The rebuild is producing an enormous impact on latency, although Verizon has never discussed the details. In addition, Verizon is deploying servers strategically throughout the network, often at aggregation points. They are using  Calix 40 gigabit NG-PON2 for backhaul with the EXOS operating system, about which I hear good things. I call Verizon's network the most advanced in the world because they are one of the few with much mmWave and are also rebuilding the backbone.

 p.s. New equipment from Ericsson & Huawei brings LTE very close to the speeds of 5G.

dave askOn Oct 1, Verizon turned on the first $20B 5G mmWave network. It will soon offer a gigabit or close to 30M homes. Thousands of sites are live in Korea; AT&T is going live with mobile, even lacking phones. The hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 4X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.

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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.