Japan is finally moving, with NTT setting a goal of 2.5 million within a year. Japan: Soon Millions of 5G Users Rakuten’s software-based network isn’t working yet for 5G; when it does, expect rapid growth. KDDI made a point of charging the same price for 5G as for 4G. Almost no carrier is finding demand for 5G at higher prices, except maybe in Korea.
U.S. 3.4 million 5G phones sold in Q1. That’s a remarkable figure, because none of the U.S. 5G networks except Sprint were any good.
Buyers of $1,000+ S20 phones are thinking ahead. 93% of 3.4 million 5G phones sold in the first three months were Samsung S20’s, the first three bars in the illustration. Other phones were only 7%. T-Mobile is now offering an OnePlus and an LG for $700, so will not continue that dominant. Apple 5G won’t be out until late fall.
I’m guessing that Verizon pushed premium buyers to the Samsung 5G and they were willing to spend the extra. One reason my estimate for 5G in 2020 is probably the highest in the world is I believe that many will choose 5G phones as the price gap narrows.
Phones: In Europe, 5G phone prices are down to 400 euros. In China, many are under US$300 and falling. The difference between 4G and 5G phones may be as little as $50-75. 90% of Korea is covered with 5G. 50% of China will be covered yearend and most of the U.S. and probably Japan in 2021. In those countries, 5G phones are or soon will be the right choice for all but the poor. Most people keep phones 3-5 years.
The market isn’t large enough to support the first ten vendors but Meizu, Sony, and Lenovo are jumping in. Despite low prices, phone sales are continuing to fall even after reopening. China’s April sales were encouraging, however.
India: Bharti and Vodafone are using politics to hold off 5G, although Jio is ready to go and scale massively. Phone prices are already low enough for many Indians to choose 5G phones. Because of the 1.4 billion Indians, the 5G numbers in India will rapidly pass most other countries as deployment widens.
China: The government has confirmed 5G as a major part of the massive “New Infrastructure” spending. The goal of 500,000 cells upgraded in 2020 is likely to be exceeded. 10,000 5G cells are added every week. China is on track for 500,000 5G base station yearend, covering about half the country. 200,000 have already been deployed, despite COVID-19.
150 million and possibly 200 million 5G “contracts” will be sold this year. However, China Mobile’s announcement of “50 million contracts” in Q1 is deceptive. That’s more than the total of 5G phones sold. I assume what’s happening is that people with 4G phones are renewing at the 5G level because the price is the same.
Korea is behind target, as the carriers heavily reduced subsidies. The 1.08 million new 5G subscribers in the first quarter
Europe is so far behind that no carrier is willing to release customer figures. Xavier Niel’s Eir has covered 25% of Ireland. No other company has reported even 10% coverage, except for the second-rate “low-band” 5G. Xavi is ready to go with 5G in France but Martin Bouygues is begging ARCEP to continue delaying.
Telefonica had been intending to use mmWave to grow fixed wireless in Germany. They aren’t going forward yet, possibly because the deal to share Vodafone’s cable network is cheaper.
Telefonica and Vodafone, challengers to the incumbents, had a natural business strategy of moving aggressively with mmWave and coverage. The technical people were strongly in favor. Management has refused, presumably because they fear the incumbent Empires will strike back. Both are also keeping capex down to keep the stock price and their bonuses up.
Monthly prices: KDDI and others are finding customers are resisting higher prices for 5G. Even proud Verizon is not collecting a premium, as T-Mobile continues to win customers. Korea’s government is pressuring the telcos to bring down prices.
5G capex and cost is about the same as 4G and capacity is much greater. In a competitive market, price per bit would be falling rapidly.
IoT: 5G was never going to be important for IoT because it has few improvements over 4G IoT. 5G can support a million IoT connections per cell but so far no applications have needed more than 4G can support. 90%+ of IoT will continue Wi-Fi and Bluetooth, including our 11 devices.
Cellular IoT has an advantage where the receivers are widely dispersed (meter reading) or outside (cars.) Enrique Blanco, Telefonica CTO, points out that all current IoT requirements can be met with 4G and the NSA core. (He’s optimistic about demand for the SA core in a few years.)
Autonomous cars: Although extraordinarily exciting. autonomous cars will not be an important market for 5G for at least 5-10 years. All cars will be connected, for Waze-like apps and much more. The traffic could be substantial but not more than 4G can handle.
5G SA core: Suddenly, telcos are moving to the 5G SA core. It could be they think there’s a strong market for QoS/network slicing. National security agencies are interested, but few others seem close to orders. (Think real-time facial recognition on a crowd the size of New Year’s in Times Square.) More likely, the CTOs have become converts to the cloud-native, microservice designs possible in the 5G core. That significantly eases the transition to network functions virtualization. Rakuten’s early success with a software-defined, fully cloud-native system is convincing evidence the new software architecture can work.
Ericsson is delivering a US$400 million SA core to China Mobile, as are Huawei and ZTE. It’s expected by year-end.
“Fake 5G”: Ericsson and Nokia are demoing software to use small amounts of low-band 4G spectrum for 5G NR. The performance is nearly identical to 4G. Although the companies at 3GPP agreed to call anything with NR software “5G,” I consider it faking. Verizon, Swisscom, and now Deutsche Telekom are advertising 5G coverage in areas they can only deliver 4G speeds.