Jean Paul Sartre by GrayJean-Paul Sartre died in 1980. There were fewer than a thousand cellphones in the world. The World Wide Web was a decade away. He's the most prominent existentialist philosopher. There's no obvious connection between his work and this analysis of the impact of Wi-Fi on telephone companies.

As I write in August, 2015, it's not clear whether the panic telcos are demonstrating about Wi-Fi is justified. Verizon is running scared about the risk they face from Wi-Fi offload. That's the most powerful signal that WiFi is a real threat. On the other hand, Cisco and AT&T continue to project 40%-50% growth in data demand for four or five years at least. I haven't seen any convincing data to the contrary.

They've turned around on the importance of telco small cells in high frequencies, presumably as part of a campaign to limit Wi-Fi. 

In the summer of 2014, Verizon was answering my questions about small cells in 3.5 GHz with a "probably not interested." CFO Shammo and others have made clear they have all the spectrum they need for the next few years' plans. A few months later, they emerged as the principal of a multi-million dollar campaign to enclose as much as half the Wi-Fi spectrum for telco use, LTE-U/LAA.

In particular, Verizon insists on deploying almost immediately, even before the standard is ready. Verizon and other Western telcos rarely use pre-standard gear unless they face an emergency. There's no emergency on spectrum, so I infer this is a political move. They are trying to create "facts on the ground" before policy people understand the threat to Wi-Fi and shut off the whole effort.

Cellular growth is falling in half, from 100%/year to 50%/year but the industry knew that was coming. The earlier high growth rates were an artifact of people getting their first smartphones. Cisco and especially AT&T have been predicting the fall-off in growth for two or three years. 

Bottoms-up, Wi-Fi First is clearly the most efficient way to build wireless networks. The lower cost of a network sending most of the traffic through existing home gateways changes all the economics. Iliad/Free in France is making a profit offering 20 gigabytes + unlimited text and sms for $20-25/month. Towers won't disappear because Wi-Fi is shortrange and can't reach everywhere.  Free has launched towers to 80% of France and is heading to 95% shortly. Coverage requires towers. But with most traffic going through gateways the cost per gigabyte plummets.

Interesting times.

 

 

dave askOn Oct 1, Verizon turned on the first $20B 5G mmWave network with extraordinary hopes. The actual results the first four months have been dismal. Good engineers tell me that will change. Meanwhile, 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, millimetre wave will not be necessary to meet expected demand.