"Don't Buy From Huawei," The Senator Said

Published: 11 January 2018 11 January 2018

Chinese social media is calling for a boycott of Apple in return.

The AT&T phone cancellation is just the latest unproven security accusation. A decade ago, I brought Huawei in to bid in a modest mobile network I was consulting on. We needed a better price for microwave backhaul gear; to get into the account Huawei came in about 30% lower for comparable equipment. Then the call came in to the company President from a Senator's aide. "Don't buy from Huawei," he said, and reminded the CEO how dependent the company was on government funding. There was no choice.

Since then, Huawei has been allowed to sell phones in the U.S. but not major networking equipment. It's somewhere between very difficult and impossible to use the phones covertly. There are dozens of Huawei phones and other products available at Amazon or Best Buy. Google phones are made by Huawei. There were no security issues raised, until Huawei committed to spending $100M on advertising to back up a large contract with AT&T. The ad at left is from the NY subway.

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300,000 Indian Villages Fibered; 325,000 More Soon Come

Published: 10 January 2018 10 January 2018

After years of delay, >100M Indians are ready to be connected with fiber, Wi-Fi, and LTE.

Phase 1 is finished of India's BharatNet, the most ambitious rural connectivity program in history. The expectation is all 250,000 regional councils and 625,000 villages will be reached by GPON fiber. Minister Manoj Sinha is optimistic they will beat the March 2019 completion target.

Most villages will have local Wi-Fi, sometimes from the local Post Office and often through a program of local businesses. Fiber backhaul is being provided inexpensively to the Indian telcos, who are installing LTE. Reliance Jio, already reaching over 80% of Indians, will presumably use BharatNet backhaul as they extend their LTE network to 95% of Indians.

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Breaking: Goldman $5B Writeoff, Adtran Warning Point to Telco Capex Cut & Highly Distorted Earnings to Come

Published: 29 December 2017 29 December 2017

Goldman Sachs took a $5B writeoff this morning for the new tax law and Bloomberg expects $20B more from Citi. Verizon and AT&T have some of the same issues so may see similar. Do not believe U.S. earnings results in the next year or two because balance sheet adjustments may overwhelm underlying trends. Underneath it all, all these companies are extremely profitable and the tax changes will put them ahead. But the numbers the next 24 months could be highly misleading.

     Verizon has $46B in "deferred long term liabilities" and $38B in poorly defined "other liabilities." Major adjustments - up or down - would surprise no one. Phil Cusick of Morgan did an analysis a while back from which I inferred Verizon would need writedowns. Since he hadn't said that explicitly, he got angry at me and cut me off his distro. (I'd like to be back. His analysis then and other times was on target.) I haven't trusted Verizon's financials for a decade because of unclear items like these liabilities and enormous goodwill. Former CFO Stephenson at AT&T has long been a wizard at delivering the numbers he wants to. 

Suggestion: If you are putting money into this industry, closely follow analysis from John Hodulik and Craig Moffett. They are among the best at finding reality beneath the figures reported.

     Separately, Adtran pre-announced 4Q sales at $125M, $20M less than the last three quarters.

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"A Brain Drain & An Empty Shell," If Broadcom Buys Qualcomm

Published: 12 December 2017 12 December 2017

Will they ever again produce a chip like the new Snapdragon 845? The 835 is the best mobile chip in the world, dominating the market in top end smartphones. The newly announced 845, due in June, is reported to be 25%-30% faster. It will be produced on the same 10 nm process at TSMC. The 845 is "A significant upgrade — to get 25-30 percent performance in the same general process node is huge," analyst Jim McGregor tells Rick Merritt in EE Times. It's designed for speeds into the gigabits and ultra HD. 

Jon Peddie's comment in the headline probably goes too far, but the cutbacks at Broadcom foretell problems ahead.

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Iliad Free Already Bringing Italian Down Prices

Published: 24 November 2017 24 November 2017

Xavier Niel's Free Mobile offers a 100-gigabyte cap on their 20 euro service, which Jennie bought in Paris. For 20 euros, Telecom Italia offers 5-10  gigabytes. With Free soon to turn on Italy's fourth network, competitor Fastweb brought down prices to compete. In Canada, all three carriers brought prices down before the fourth entered so I expect TI and Vodafone to also adjust prices.

Xavi changed the European Internet when he offered triple play in France for 30 euros. Germany's regulator, Mathias Kurth, told me he pressed his companies to come closer to France's price. The lower mobile prices are slowly spreading to other countries. T-Mobile Netherlands recently went "unlimited" although DT hasn't done that in that in Germany, which recently went from 4 to 3 carriers. 

The anecdotal evidence is strong that prices move 10-20% when a market goes from 4-3 or 3-4 primary carriers.

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U,S. Q3: Cable +540K, Telcos -155K. Telcos clobbered across > 1/2 the country

Published: 17 November 2017 17 November 2017

"In the first three quarters of 2017, cable companies added about 2,000,000 broadband subscribers, while Telcos lost about 430,000 subscribers." Bruce Leichtman. Ten years of telco dis-investment across half the United States is allowing cablecos to rise from 55% of the market to 64%. They are pulling further away every quarter. 

AT&T's stock went down $13B on they day they warned about disappointing numbers. If they had spent even a fraction of $13B on investment, their numbers would have been fine. Verizon's investment % has gone down for several years; this quarter, they lost 10,000  broadband customers.

Frontier lost 63,000 subscribers, The stock has gone down 85% this year to a level that implies a serious bankruptcy risk. That is unlikely before 2020 because they don't have large debts coming due. They have been dis-investing for years, with capex less than depreciation. Centurylink lost 101,000 for the same reason. 

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G.fast Reality Check

Published: 27 October 2017 27 October 2017

It works and is deployed in dozens of places, including British Telecom and AT&T. T reports typical speeds of 750 megabits, up and down combined. The highest speeds go less than 150 meters, which is fine for fiber to the basement. In 2018, 212 MHz chips will double that speed. Plans include 10M homes passed by BT and a million at nbn Australia.

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Wireless Network Design: The Troika

Published: 27 October 2017 27 October 2017

More cells, more antennas, more spectrum are the three major tools for adding capacity. To begin:

Adding antennas is usually the cheapest choice in 2018. Nearly every telco is going to four (4x4 MIMO.) Adding spectrum is very attractive when you have some unused but expensive if you have to buy it. Adding cells was the approach before LTE-A in 2014 permitted aggregation. Since then, tower building has almost stopped in the developed world. Any upgrade should include 256 QAM, more bits per Hz.

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