Market Studies

Investing in 5G – A US Investment Guide and Marketing / Technical Report

Published: May 2022

Overview | TOC | TOF

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Overview:

This report is unique among 5G reports – it is specifically focused on the investor and/or the investor advisor. Questions like the following are answered:
  • I don’t understand 5G; can you explain it to me?
  • How is 5G different from what we now have? Why change?
  • How do I invest in 5G services?
  • What companies are involved?
  • Do I want to invest in 5G?
  • Are some companies better targets than others?
  • What is different about 5G anyway?
  • Why are the carriers all pushing 5G so hard?
  • Who is going to benefit from 5G?

These questions and others concerning the technical and marketing aspects of 5G services are answered in this report. Some of the questions about investment have to be answered in the context of particular investor’s circumstances, but this report will provide the data to intelligently make those decisions. In addition, all of the normally expected technical/marketing information points (architecture, forecasts, deployment scenarios, etc.) are included in this massive (nearly 100 figures and well over 130 pages) report.

The entire first section of the report (nearly half of the report) is devoted to questions of investment. The following companies are profiled with 5G activities, financials, and 5G positioning in the investment sections:

T-Mobile, AT&T, Verizon, US Cellular, Dish Network, Apple, Samsung, Huawei, Xiaomi, BBK Electronics, OPPO, Vivo, Motorola/Lenovo, Qualcomm, Ericsson, Nokia, ZTE, and Intel.

So what can you get for the substantial investment you made in this report? First, it will outline where you can invest in the services and structure based on 5G standards. It will detail the companies involved, their financials, and their roles. It will next outline the carrier’s plans for capital expenditures for 5G. In addition, it will provide extensive forecasts to illustrate the potential growth in 5G services from several angles.

Also, it will provide you with a solid fundamental understanding of the technologies involved in 5G; it will familiarize you with all of the terminology involved; it will describe the current state of development and actual deployment in the US of 5G services. Also, perhaps most importantly, the report will provide you forecasts (from the author, who was involved in cellular mobile almost since its inception in the United States) as to the direction of services based on 5G. This information should allow a potential investor to frame 5G against the other investment choices and thus make reasoned judgments about investing in the various aspects of 5G services.

The technology/marketing sections detail the architecture on several different levels to make the information usable for anyone from an investor adviser to a highly trained engineer. Forecasts are provided for capital expenditures, traffic growth deployment rates and several other items of interest.

The author of this report (Clifford Holliday) has been involved in the cell phone business almost since its beginning in the USA. He provided engineering assistance to the first deployments of GTE Mobile in the early 1980’s and has been involved ever since. This is the latest of several reports he has prepared on 5G. It is also the latest report he has prepared for IGI, after a string of over 50 major IGI reports going back to the late 1990’s.

Table of Contents

1.    INVESTING IN 5G – AN INVESTMENT GUIDE AND MARKETING / TECHNICAL REPORT 2
2.    TABLE OF CONTENTS 3
3.    TABLE OF FIGURES 8
4.    5G – IS IT AN INVESTMENT OPPORTUNITY? 11
    4.1.  Introduction 11
        4.1.1. 5G Situation Today - Chaotic 11
        4.1.2. So, What’s Really Going on? 12
    4.2.  What Is 5G? 13
    4.3.  The History of Mobile Service and the Generations (G’s) 13
        4.3.1. 1st Generation (1G) 15
        4.3.2. 2st Generation (2G) 15
        4.3.3. 3st Generation (3G) 16
        4.3.4. 4st Generation (4G) 16
             4.3.4.1. LTE Advanced (4G LTE) 16
        4.3.5. 5st Generation (5G) 16
    4.4. Nature of 5G 16
        4.4.1. 5G Frequency Plans 18
        4.4.2. Importance of Frequency Differences 19
        4.4.3. Types of 5G 20
           4.4.3.1. Millimeter-wave 5G 21
           4.4.3.2. Mid-band 5G 21
           4.4.3.3. Low-band 5G 21
        4.4.4. Carriers' Implementations 21
           4.4.4.1. T-Mobile Implementation 21
           4.4.4.2. AT&T Implementation 22
           4.4.4.3. Verizon Implementation 22
        4.4.5. The Rationale for 5G 22


5.    INVESTMENT OPPORTUNITIES IN 5G BASED SERVICES 24
    5.1.  5G – Major Carriers- Investment Opportunities 24
        5.1.1.      T-Mobile 25
            5.1.1.1. T-Mobile US 5G Deployment Status as of 1-2022 26
        5.1.2.      Verizon 27
            5.1.2.1. Verizon 5G Deployment Status 28
        5.1.3.      AT&T 31
            5.1.3.1. AT&T 5G Deployment Status 32
        5.1.4.      Carrier Capital Requirements for 5G 36
            5.1.4.1. What Investments Are Involved in Infrastructure? 37
               5.1.4.1.1. Spectrum 37
               5.1.4.1.2. Cell Site Work and Additions 37
               5.1.4.1.3. Transmission 37
               5.1.4.1.4. Network Core 37
               5.1.4.1.5. Support Systems 38
    5.2.  How Much Capital Will be Required for 5G? 38
        5.2.1.      Background 38
        5.2.2.      Recent Past Capital Expenditures 39
        5.2.3.      Current and Future Plans for 5G Capital Budgets 40
    5.3.  The 5G Major Carrier Market for Investments - Comments 41
    5.4.  Smaller Carriers Investment Possibilities 41
        5.4.1.      US Cellular 41
        5.4.2.      Dish Network 42
    5.5.  Phone Manufacturer Investment Opportunities 44
        5.5.1.      Top Individual Phone Manufactures Investment Opportunities 48
            5.5.1.1. Apple 48
               5.5.1.1.1. Apple Financials of Interest 50
            5.5.1.2. Samsung 50
            5.5.1.3. Huawei 52
            5.5.1.4. Xiaomi 53
            5.5.1.5. BBK Electronics/OPPO/Vivo 54
               5.5.1.5.1. OPPO 55
               5.5.1.5.2. Vivo 55
            5.5.1.6. Motorola/Lenovo 55
        5.5.2.      Operating Systems 56
            5.5.2.1. iOS 56
            5.5.2.2. Android 57
        5.5.3.      Smartphone Modems 57
            5.5.3.1. Qualcomm Snapdragon 57
               5.5.3.1.1. Qualcomm Financials 57
        5.5.4.      Apple iPhone Modem 57
        5.5.5.      Huawei Balong 5G01 58
    5.6.  The 5G Phone Manufacturer Market for Investments – Comments 58
    5.7.  5G Network Equipment Manufactures – Investment Opportunities 58
        5.7.1.      Huawei 58
        5.7.2.      Ericsson 59
        5.7.3.      Nokia 60
        5.7.4.      ZTE 61
        5.7.5.      Samsung 62
    5.8.  Chip Set Vendors Investment Opportunities 62
        5.8.1.      Intel 62
        5.8.2.      Qualcomm 63
        5.8.3.      Samsung 65
        5.8.4.      Apple 65
        5.8.5.      Huawei 65
    5.9.  5G Network Equipment Manufactures Investments – Comments 65
6.    5G FORECASTS 67
    6.1.  Forecast Deployment Scenario 67
        6.1.1.      2019 68
        6.1.2.      2020 68
        6.1.3.      2021 68
        6.1.4.      2022 and Later 68
    6.2.  Timeline 69
    6.3.  Capital Forecast for 5G 69
    6.4.  Individual Area Forecasts 71
        6.4.1.      Mobile Traffic Forecast 71
        6.4.2.      US Mobile Carriers Forecast 73
        6.4.3.      5G Penetration Forecast – US 75
        6.4.4.      Smartphone Growth Forecast for 5G - the US 77
        6.4.5.      5G Phone Introduction Plans 78
        6.4.6.      5G US Penetration Forecast - Phones 79
        6.4.7.      Major Use Cases of 5G – Penetration Forecast 79
        6.4.8.      IoT – Internet of Things – 5G Penetration Forecast 79
        6.4.9.      Autonomous Vehicles – 5G Penetration Forecast 80
        6.4.10.    Combined Numerical Forecast Network Impact of Autonomous Vehicles and IoT 81
        6.4.11.      Over-Build Forecast 81
    6.5.  Forecasts Summary 82
        6.5.1.      Traffic 82
        6.5.2.      US Mobile Carriers 82
        6.5.3.      Phones 82
        6.5.4.      5G Penetration 82
            6.5.4.1. IoT 82
            6.5.4.2. Autonomous Vehicles 83
            6.5.4.3. Overbuild/ Cross-Boundary 83
7.    THE ARCHITECTURE OF 5G 84
    7.1.  Basic Architecture 84
    7.2.  5G Infrastructure Components 85
        7.2.1.      Phones 85
        7.2.2.      Antenna and Towers 86
            7.2.2.1. Small Cell Antennas 86
            7.2.2.2. MIMO 87
            7.2.2.3. MIMO and 5G 88
            7.2.2.4. Massive MIMO Spectrum Multiplying Advantage 89
        7.2.3.      5G Radios 90
        7.2.4.      Fiber and Back-haul 91
            7.2.4.1. Verizon Fiber Plan for 5G 92
        7.2.5.      5G Network Cooperation 92
    7.3.  Location Types of 5G 93
        7.3.1.      Stationary 93
        7.3.2.      Mobile 94
8.    WHAT ARE THE CHARACTERISTICS OF 5G SERVICES? 95
    8.1.  Higher Capacity 95
    8.2.  Higher Data Rate – 95
    8.3.  Lower Latency – 97
    8.4.  Massive Device Connectivity – 98
    8.5.  Reduced Costs - 99
    8.6.  Consistent Quality of Experience Provisioning - 99
    8.7.  Developmental Needs 99
        8.7.1.      Interior Penetration of mmWave 99
        8.7.2.      Infrastructure Deployment Aids 99
        8.7.3.      Support Systems 100
9.    APPENDIX I - HISTORY OF GENERATIONS OF CELLULAR PHONES IN THE USA 101
    9.1.  HISTORY OF CELLULAR PHONES IN THE US 101
    9.2.  What are the Generations – Details? 101
        9.2.1.      1st Generation 102
            9.2.1.1. 1G Standards 102
        9.2.2.      2nd Generation 102
            9.2.2.1. 2G Standards 103
        9.2.3.      3rd Generation 103
            9.2.3.1. High-Speed Downlink Packet Access - 104
            9.2.3.2. 3GPP Long Term Evolution, the Precursor of LTE Advanced – 104
            9.2.3.3. Evolved HSPA 104
            9.2.3.4. 3G Standards 104
        9.2.4.     4th Generation 105
            9.2.4.1. LTE Advanced – 105
            9.2.4.2. MIMO 105
            9.2.4.3. 4G Standards 105
        9.2.5.     5th Generation 106
            9.2.5.1. 5G Standards 106
10.    APPENDIX II. MAJOR USE CASES FOR 5G: IOT, AUTONOMOUS VEHICLES, OVERBUILD 108
    10.1.  IoT - The Internet of Things 108
    10.2.  Availability of a Network for Connection – a Major Problem with IoT 109
        10.2.1.      Cellular IoT Connections Explained: NB-IoT vs. LTE-M vs. 5G and More 109
        10.2.2.      How did Cellular IoT come to Be? 110
        10.2.3.      Cellular IoT is meant to meet the requirements of low-power, long-range applications. 110
            10.2.3.1. Cat-1 110
            10.2.3.2. Cat-0 110
            10.2.3.3. Cat-M1/Cat-M/LTE-M 110
            10.2.3.4. NB-IoT/Cat-M2 111
            10.2.3.5. EC-GSM (formerly EC-EGPRS) 111
        10.2.4.      5G as an IoT Connection Solution 111
        10.2.5.      How Does 5G Enable IoT? 111
    10.3.  Autonomous Vehicles 112
        10.3.1.      Autonomous Vehicles Benefits 112
        10.3.2.      Current Versions of Autonomy 112
        10.3.3.      Issues with Autonomous Development 113
            10.3.3.1. Safety 114
            10.3.3.2. Business Case 114
            10.3.3.3. Availability of a Network for Interconnection 115
    10.4.  Overbuild - 5G as a Major Competitive Tool 116
        10.4.1.      Overbuilding 116
        10.4.2.      Cross-Boundary Service 116
        10.4.3.      Competitive Implications 118
11.    APPENDIX III - LIST OF US CELLULAR CARRIERS 121
    11.1.  Contiguous US and Hawaii 121
    11.2.  Alaska 122
12.    APPENDIX IV - TRAFFIC STATISTICS RELATIONSHIPS 123
    12.1.  SONET/SDH Data Rates 126
13.    APPENDIX V DATA TRAFFIC FUNDAMENTALS 127
    13.1.  Internet Traffic Calculations 127
        13.1.1.      Bits and Bytes 127
        13.1.2.      Transfer Rate 127
        13.1.3.      Busy Hour Traffic 128
        13.1.4.      Protocol Efficiencies 129
        13.1.5.      Statistical Multiplexing 129
        13.1.6.      Peaking 129
14.    APPENDIX VI - THE LIGHTWAVE NETWORK SERIES OF REPORTS 132 132
    14.1.  The Lightwave Network 132
    14.2.  The Lightwave Series of Reports 133
        14.2.1.      General Reports on the Network 134
        14.2.2.      General Market Reports 134
        14.2.3.      Specific Systems Reports 137


Table of Figures
Figure 1, Radio Frequency Spectrum 17
Figure 2, 5G Frequency Utilization in the US 18
Figure 3, 5G Frequency Allocation – US 18
Figure 4, 5G Download Speeds 23
Figure 5, US Wireless Providers Prior to Sprint/T-Mobile Merger 24
Figure 6, Wireless Subscribers by Company after Sprint/T-Mobile Merger 25
Figure 7, Financial Data for T-Mobile 25
Figure 8, T-Mobile Coverage Map 26
Figure 9, Verizon Financial Data 27
Figure 10, Verizon Coverage Map 28
Figure 11, Cities with Verizon Ultra Wideband 5G service as of end of 2021 29
Figure 12, AT&T Data 32
Figure 13, AT&T Coverage Map 32
Figure 14, AT&T 5G+ mmWave Coverage Cities 34
Figure 15, Major Telco Capital Expenditures 2013-2018 39
Figure 16, Carrier's Capital Expenditures 2019-2022 40
Figure 17, Carrier's Expenditure for Spectrum (FCC Auctions) 40
Figure 18, US Cellular Coverage Map 42
Figure 19, US Cellular Financial Data 42
Figure 20, Total Cell Phone Shipments – Worldwide 2016-2021 44
Figure 21, Smartphone Growth in US 45
Figure 22, US Adoption of Technology 45
Figure 23, Selected Countries Population Vs Smartphones 46
Figure 24, US Smartphone Ownership by Brand -Mid 2021 46
Figure 25, Cell Phone Shipments Worldwide by Manufacturer 47
Figure 26, Apple Income Contribution by Product Area 49
Figure 27, iPhones in Production 2022 49
Figure 28, Apple Share Prices 50
Figure 29, Apple Sales by Category 50
Figure 30, Apple Sales by Country 50
Figure 31, Samsung Revenue Total (USD 1000's) 51
Figure 32, Samsung Segment Revenue (KRW millions) 51
Figure 33, Samsung Financials 2018-2020 51
Figure 34, Huawei Financials 52
Figure 35, Smart phone Shipment 2nd Qtr 2021 54
Figure 36, Xiaomi Financials 2016-2020 54
Figure 37, Xiaomi Stock Prices 54
Figure 38, Lenovo Financials 56
Figure 39, Qualcomm Revenues, 2020, 2021 57
Figure 40, Ericsson Net Sales Geographic Split 60
Figure 41, Ericsson Financials 60
Figure 42, Nokia Financials 61
Figure 43, Intel Financials 2021, 2020 63
Figure 44, Qualcomm Financials 65
Figure 45, 5G Forecast Timeline 69
Figure 46, Capital Expenditure Forecast 70
Figure 47, 5G Capx Compared to Total CapX - Major Carriers 71
Figure 48, Major Data Traffic Sources 72
Figure 49, US Mobile Phone Data Traffic 73
Figure 50, US Major Mobile Carriers Subscriber Forecast 74
Figure 51, Forecast of Subscribers - Major Carriers 75
Figure 52, 5G Penetration - One Forecast 75
Figure 53, 5G Penetration Forecast by Major Application 76
Figure 54, Smartphones as a Proportion of Total US Mobile Phones (all types) 77
Figure 55, Landlines are a Dying Bread 77
Figure 56, US Smartphone Shipments per Year 78
Figure 57, Smartphone Penetration Forecast 79
Figure 58, IoT Sense Point Forecast 79
Figure 59, IoT Penetration Forecast 80
Figure 60, Autonomous Vehicles Forecast of Impact on 5G 80
Figure 61, Network Impact of Autonomous Vehicles and IoT 81
Figure 62, Overbuild Forecast 82
Figure 63, 5G Basic Architecture 84
Figure 64, 5G Overall Layout 85
Figure 65, Sketch of 5G phone 86
Figure 66, Different Types of Antennas to be Used with 5G 87
Figure 67, MIMO Multipath Propagation Increases Thru-Put 88
Figure 68, Depiction of Massive MIMO 89
Figure 69, Example of MIMO Antenna 90
Figure 70, 5G Layout Showing Fiber Connections 91
Figure 71, Graphical Illustration of Fiber's Place in a 5G Network 92
Figure 72, Cell/Technology Cooperation 93
Figure 73, Fixed Wireless 5G 94
Figure 74, 5G Capacity Capabilities 95
Figure 75, Theoretical 5G Speed 96
Figure 76, Standards Evolution from 4G to 5G 96
Figure 77, Lower Latency Triangle - 5G 97
Figure 78, IoT Sensing Points Explosion 98
Figure 79, 5G Connection Capabilities 98
Figure 80, Wireless Penetration by Generation and Forecast 102
Figure 81, Network Generations Timeline 107
Figure 82, Conceptual Drawing - Internet of Things (IoT) 108
Figure 83, Cellular Approaches to IoT Connections 109
Figure 84, Goals of 5G 111
Figure 85, Some Current Partially Autonomous Versions 113
Figure 86, Verizon's NOOF FiOS Service 117
Figure 87, 5G Cross Boundary Service Example 118
Figure 88, Fixed Broadband Service Providers - US 119
Figure 89, Fixed Wireless Depiction 120
Figure 90, Traffic/Speed Relationships 123
Figure 91, Example of Various Traffic Sizes 124
Figure 92, Multiples of Byte 125
Figure 93, Wavelength to Frequency Conversion Chart 125
Figure 94, Sonet/SDH Conversions 126
Figure 95, New Transfer Rate Forecast 128
Figure 96, Summary of Concepts 131
Figure 97, Lightwave Network 133