The FCC granted 5,676 licenses today for wireless operations in mid-band radio-frequency spectrum, also known as C-band spectrum in the range from 3.7 GHz to 3.98 GHz. The licenses went to high bidders in the FCC Auction 107 that concluded on Feb. 17. Twenty-one bidders spent about $81 billion for the licenses. “Today’s action keeps the transition of this band to flexible use on track, paving the way for carriers to use this spectrum to provide 5G and other advanced wireless services,” a statement from the FCC reads.
The FCC’s acting chairwoman, Jessica Rosenworcel, said, “These mid-band licenses are the sweet spot for 5G deployment. That’s because they have the right mix of capacity and propagation that will help us reach more people in more places faster. With these licenses in hand, more carriers can deploy mid-band 5G, which means faster speeds over much wider coverage areas and more robust competition.”
Among the bidders, Verizon Wireless, under its business name of Cellco Partnership, spent $45.5 billion for 3,511 licenses. AT&T spent $23.5 billion for 1,621 licenses. T-Mobile spent $9 billion for 142 licenses. U.S. Cellular spent $1.3 billion for 254 licenses. NewLevel II, a bidding entity for Grain Capital, spent $1.2 billion for 10 licenses. Canopy Spectrum, a joint venture of Jennifer Fritzsche and Ed Moise, spent $197 milllion for 84 licenses.
The initial authorizations have a term not to exceed 15 years from the date of initial issuance or renewal, the FCC said. The FCC imposed lengthy, detailed construction requirements upon the license-holders in an effort to see to it that they build facilities to put the spectrum to use.
Satellite operators Intelsat, SES, Telesat, Eutelsat and Star One are working to clear the portion of the C-band that was auctioned, according to a story in Via Satellite. “The operators have agreed to clear the spectrum in exchange for relocation costs and incentive payments for clearing the spectrum on an accelerated timeline,” the story reads. “The FCC decided on $9.7 billion of accelerated relocation payments, most of which will go to Intelsat ($4.87 billion) and SES ($3.97 billion). The operators must first clear 120 megahertz of spectrum in 46 partial economic areas by Dec. 5, 2021. In a second phase, they must clear the lower 120 megahertz in the remaining areas, plus an additional 180 megahertz nationwide, by Dec. 5, 2023.”
Don Bishop is executive editor and associate publisher of AGL Magazine.
What can wireless infrastructure vendors expect from Verizon Wireless for the rest of the year?
Verizon confirmed in its 3Q16 earnings call on October 20 that its overall capital expenditures (capex) for the year will come in at the low end of its original guidance range of $17.2 to $17.7 billion.
What does that mean for wireless equipment vendors and contractors? Consider where Verizon has invested in its capital through 3Q16.
To date, the company has spent a total of $11.4 billion or 66 percent of the projected $17.2 billion. Of that total, $7.8 billion or roughly 68 percent has been applied to its wireless network, $2.9 billion or 25 percent has gone into its wireline network with the 7 percent balance applied towards corporate and other capital investments.
If these proportions hold through year-end, as we might expect, then this means that Verizon will invest about $11.7 billion in wireless, roughly flat on a year-to-year (YtY) basis with the $11.7 billion spent in 2015.
In quarter-to-quarter (QtQ) spending, Verizon Wireless’ capex through the first nine months has been running 5 to 10 percent below the comparable levels in 2015. By the end of 3Q16, Verizon Wireless spent 66 percent of its full-year wireless capex projection compared to 72 percent over the same period in 2015.
To close the gap and meet its projected 2016 budget, we estimate that Verizon Wireless will invest about $3.92 billion in 4Q16, up 41 percent QtQ from $2.77 billion in 3Q16, and up 20 percent over the $3.26 billion spent in 4Q15.
Where is the money going?
Small cells and DAS account for the largest portion, an estimated 46 percent, of Verizon Wireless’ full-year capex. The company is using small cells and DAS to implement an ambitious network densification program that extends its 3G and 4G LTE coverage and capacity closer to customers for high-speed mobile data applications. Crown Castle, as Verizon Wireless’ main contractor for small cell deployments, is realizing the benefits of this high-level activity. Crown Castle reported gains in its own 3Q16 earnings call on October 21 and signaled a very positive outlook.
The small cell/DAS capex portion includes all products and capitalized services involved in designing and building a new site: surveys, site acquisition, permitting and licensing, site engineering, infrastructure equipment (antennas, radios cable, power, cabinet, mounts), backhaul equipment (fiber cable or microwave radio), installation, testing and commissioning.
To a lesser degree, the company is still adding to its macro network, albeit mainly for site modifications and upgrades that make up 29 percent of the wireless capex. Few new macrocell sites are being added in 2016. Even with site mods, there is still a lot of equipment (antennas, cables, radios, mounts, power, backhaul) that must be engineered, installed and tested.
The remaining 25 percent is applied to the core of the network. This involves deploying enhanced packet core (EPC) with heavy-duty switches and routers that replace legacy circuit switches, software platforms for network function virtualization (NFV) and software-defined network (SDN) operations along with updated customer billing systems.
Fourth quarter capex ramp-ups are not unusual among public wireline and wireless carriers alike. For 2016, Verizon Wireless is back-end loading its network investments and will spend an estimated 34 percent of its full-year guidance in 4Q alone.
It’s been a mediocre year for wireless infrastructure equipment vendors so the 4Q boost in capital spending is a nice year-end bonus.
John Celentano is a technology marketing consultant and a wireless infrastructure expert.
Tier 1 wireless carriers’ 2Q16 financial results showed aggregate capital expenditures (capex) growing 11 percent sequentially from 1Q16 but at lower levels, down 14 percent, compared to spending in 2Q15.
The good news is that the Tier 1s maintained their guidance for full-year capex. AT&T was the outlier suggesting its 2016e capex is trending towards the “low end of the range” without specifying a number.
The Tier 1s, collectively, are planning network investments totaling $26.9 billion in 2016e. That figure is down 11 percent from the $30.2 billion these national carriers spent in 2015. The Tier 1 carriers account for an estimated 96 percent to the total public wireless carrier capex in the United States.
Yet capital spending remains heavily concentrated. Verizon leads the pack with $11 billion or 41 percent of the Tier 1s’ total. Followed by AT&T at 31 percent of the total.
The lion’s share of the investment, more than 60 percent, is applied to radio access network (RAN) infrastructure – macrocells, small cells and DAS. All carriers still are spending on macrocell upgrades and expansions to 4G LTE coverage and capacity in multiple frequency bands. Network densification is accelerating, however, with a shift in spending toward indoor and outdoor small cells, and in-building DAS deployments.
The Tier 1s spent $12.9 billion or 48 percent of their aggregate 2016e budget through mid-year. The $6.8 billion in 2Q16 was up 11 percent sequentially from $6.1 billion in 1Q16 but down 14 percent compared to $7.9 billion in 2Q15.
Capex among Tier 1s should ramp steadily through the balance of the year, even at reduced levels from 2015. We expect 3Q16 spending to stay flat with 2Q, then uptick by 8 percent to $7.2 billion in 4Q16 as the Tier 1s round out their full-year budgets.
The lower but steady spending is little conciliation for wireless equipment vendors and professional service providers for the current year, at least. Nonetheless, accelerated infrastructure spending through year-end, mainly to meet unrelenting mobile data demand, bodes well for continued network expansion into 2017 and beyond.
John Celentano is a principal in Skyline Marketing Group, which provides technology marketing & sales strategy advisory in advanced communications services, and wireless, telecom, data networking infrastructure markets. Additionally, support is provided for internal positions in market analysis, business development, strategic planning, strategic marketing, product management, product marketing, sales operations.
For more information, go to https://www.linkedin.com/in/john-celentano-4822692
July 12, 2016 — In advance of the first 3GPP work on the 5G standard, Verizon announced this week that it has completed its 5G radio specification in collaboration with the Verizon 5G Technology Forum, which includes Cisco, Ericsson, Nokia, Qualcomm and Samsung.
“The completion of the 5G radio specification is a key milestone toward the development of a complete 5G specification,” said Adam Koeppe, Verizon vice president network technology planning, who is leading the 5G trial efforts.
While there is much work to be done in the 5G standards process, Verizon’s effort will assist the international standards body 3GPP. Release-15 of the 3GPP’s 5G specifications will begin in September 2016 and end mid-2018. In March 2017, the RAN Working Group’s work will begin on specification for the 5G radio.
“The level of collaboration that we are seeing exceeds what we saw during 4G. This agile way of developing the specification and working with the ecosystem will enable us to get to market rapidly,” Koeppe added.
The specification provides guidelines to test and validate crucial 5G technical components, which allow chipset vendors, network vendors and carriers to develop interoperable solutions and contribute to pre-standard testing.
Carrier Looks to Accelerate 5G Innovation in Pre-commercial trials
Verizon has entered pre-commercial 5G testing in New Jersey, Massachusetts and Texas. Its goal is to accelerate the pace of innovation in wireless as well as in how the industry can deliver benefits of fiber functionality wirelessly to customers, according to a prepared release.
During the testing process, numerous 5G technology enablers have been validated, including bandwidth of several hundred megahertz in size, multiple antenna array processing and carrier aggregation.
Propagation and penetration testing across residential single and multi-dwelling units built in field locations has validated the feasibility of millimeter wave systems. Tests include throughput analysis with customer premises equipment at various locations inside the home to facilitate the study of line-of-sight and non-line-of-sight performance, and propagation modeling using barriers such as structures and foliage, all based on real-world fixed wireless applications.
3GPP Cements 5G Timeline
3GPP Technical Specifications Group RAN further agreed that the target NR scope for Release 15 includes support of the following:
During the discussion at TSG#72 the importance of forward compatibility – in both radio and protocol design – was stressed, as this will be key for phasing-in the necessary features, enabling all identified usecases, in subsequent releases of the 5G specification, according to the organization.
By J. Sharpe Smith, Senior Editor, AGL eDigest