Welcome to episode  197 of the G2 on 5G. It's the latest inside scoop on everything 5G. We cover 6 topics in about 20 minutes, and it's brought to you by more insights and strategy. I'm Will Townsend. Joining me again this week is fellow analyst Anshul Sag. Let's get started with my 1st topic and sorry, I'm.

All of a sudden, I'm getting allergies. So  the heat is on and in the state of Texas, but I want to talk about Nokia and they recently announced their intention to acquire Infineera and Infineera is an optical company that I'm probably mispronouncing. This is a pretty big acquisition for Nokia over 2 billion dollars in what it hopes to do is strengthen its optical networking business and optical component business.

And. I've talked about Nokia in the past. They have a very strong portfolio, probably only rivaling that of Cisco and Huawei. And what this deal does, if it's approved, is it gives them  additional access to the North American market. And. About 60 percent of the business that the company that they're acquiring generates is in North America.

And there's also an opportunity for Nokia to enter the data center with this as well. And why I think it's relative to 5G is, obviously optical transport networks support the backbone of mobile networks and. From my perspective, this is a smart move on Nokia. So they're definitely down in an area that they're already strong.

And they're also divesting a submarine cable business unit. And it's actually going to be sold to the French government is my understanding. So that should generate some additional cash for them as well. But on the surface, this looks really strong. And I know we were just talking before we got started, you caught the news on this as well.

What are your thoughts? 

I actually had a question for you cause I didn't. Really look into it as deeply as I assume you have. Was that sale in France required for them to do to get this acquisition to go through, or was it separate?  

It's separate there was no requirement for them to do that.

And I'm assuming it's to allow them to  generate some additional cash flow here. The 1 thing I will mention before you jump in with your thoughts is that this also makes a lot of sense when you look at generative AI. for your time. And that opportunity within data centers with, connectivity to large language models in the cloud, as well as eventually local and for scene and training on a I.

P. C. S. But what do you think?  

I do think it's an interesting choice for Nokia. I think if you look at there are other businesses I've been working is probably their strongest growth opportunity. Maybe. And I think that, these kinds of more wireline businesses they're a little bit less sexy, but I think they're a lot more stable.

And I think Nokia definitely needs more stability in their business, especially when you look at how things like 5G have been going for them outside of private. So I think it's a net positive from them for a long term perspective. But I would say that. It doesn't really feel like it will probably add much in terms of growth percent.

It will probably increase total revenue, but I don't think it will, this will necessarily rapidly expand growth, but I also think it, what it says is that. Nokia believes that fiber is going to continue to be a growth opportunity  and stay stable for them.  

Yeah, I think also, going back to my point on a I, every company needs to have a strategy articulated around what they're doing with gen a.

Because it's a. It's definitely a a stock I don't want to call it a stock pumper, but it's it's positively affecting stock values. And that's been proven when you look at NVIDIA and how they're leading the charge with Gen AI. And what happens with other companies that they strategically partner with, like Dell technologies and.

HP discover, I published, by the way, a research note recently on my thoughts around how I believe HP can lean into networking as a competitive advantage within. So I think you're right.  It's meat and potatoes from an infrastructure perspective. And it may take some time for them, to realize, the incremental revenue and top line revenue.

But again, I think it plays, to one of their strengths and you're absolutely right identifying the fact that private continues to be a strength for them as well. But hey man, let's go to your first topic. And you want to talk about release 18 and what 3GPP is finalizing to set the stage for 5G advanced. 

Yeah. I think it was actually this week. The 3GPP organization standards body, whatever you want to call it. They finally locked in and have shipped the release 18 standards. So now what we'll probably see is a lot of chip vendors saying, Hey, remember our release 18 ready chips. They're release 18 now I think Qualcomm and MediaTek will be probably among the first to say that and release 18 is,  it is the 5G advanced era, so what that is, is that's the half step, right?

We have this half step every generation. And it's like the next phase of the standard. I would say that considering where we are with standalone today it still may be a bit premature. But what I actually think will happen is we'll probably get a lot of carriers deploying 17 and 18 in concert together.

And they will do that once they have standalone in place because, All of the features in 17 and 18 that I'm aware of require standalone. So 18's  release, I believe is an increased. Motivation, I think it will promote more carriers to transition to stand alone as they should have  incentive is just there more now.

And I, I think because of that we're going to see a lot more interesting applications.  A lot more XR stuff and a lot of AI and ML implementation. I'm very excited about it because I cover a lot of XR stuff and a lot in the release 18 standard that's XR focused. Which I think will be good  for AR applications, not necessarily VR, because people aren't walking around with VR helmets in public.

They are with the Vision Pro, but it's actually a mixed reality headset, which is trying to be AR. Different discussion, don't want to waste everybody's time on that, but it's very exciting. And there's going to be lots of improvements to MIMO,  Improved energy consumption. So there's going to be a lot of things that will come with 5g advanced and it's its own episode, I believe.

So I think what we'll probably do is. You and I will have to record a separate episode, just talking about release 18. Yeah,  

I agree. And, anything that drives the operators to move to stand alone is a good thing. And in my mind that's great. Yeah, I didn't I hadn't caught that news, but but let me go to my 2nd topic.

I want to talk about AT& T. This is a soft launch. I did get the news from AT& T earlier in the week, but they are now claiming that they're the 1st carrier in the United States to launch 5G red cap. And we've been talking about red cap for a while. I'm not going to, I'm not going to go through what red cap is, but it's a soft launch because the service was officially commercially launched according to AT& T.

In select areas of the Dallas metropolitan area on June 14th, and certainly that's where their headquarters are. And so I was just going to say, I wonder 

why Dallas. Yeah, 

And they were soft on announcing the rollout timeline and nationwide availability and other markets, but. It's an important 1st step and  reading through just the information that the company had sent me.

They're very bullish on it. Certainly there are a lot of applications that are associated with red cap. And, I've talked about that before. And is very focused on they have a focus, a vertical. Market focus when you look at what they're doing and financial services and healthcare and retail and that sort of thing.

So it fits very well with their overall strategy. And they're obviously in collaboration and they have a lot of partnerships with infrastructure providers like Nokia, Samsung networks, et cetera. Yeah I think this is good news. The signals the start of red cap and honestly.

The iot applications are really gonna be interesting, but I bet you're geeking out on the opportunities around consumer, right? 

Yeah I think when I look at REDCap I actually look more towards what media tech is doing. , because they're building a complete system on a chip or whatever you wanna call it, but basically.

They're integrating the modem with all the compute and all the networking and into a single chip yeah, and that's going to be how a lot of things will connect To the internet and it's going to be super low power  And I think you know being able to get 5g connectivity at higher speeds than 4g and lower power.

I think that's really huge and I think that will enable some applications that just weren't possible before You And then when you add the low latency of 5g and the ability to do network slicing and have, real solid QoS I think it's going to be very interesting. I just, I think that the consumer applications will be limited.

I think it will mostly be IOT and enterprise stuff, but I think it will broaden the applications of 5g in ways that I think we've hoped and dreamed of, but  power and physical space limited. Okay. 

It might be interesting if Redcap ends up being the second killer app for 5G, right? We've talked often about how that's really been fixed wireless access and what companies like T Mobile and Verizon and others around the world, but I think it's exciting.

It provides a level of flexibility to your point,  provides improved performance, lower latency, Then 4G with very compelling power savings and advantages. It'll be interesting once, developers and designers start, building on that. And certainly it's chicken and egg, right?

So you gotta have, a mobile network operator deploy it before you start seeing the ecosystem follow. But I think it could be pretty exciting stuff. I think this will be a subject that, I'll be talking about for the foreseeable future. But with that, let's go to your 2nd topic.

And I did catch this news as well. And I think it's interesting, but it seems like the FCC wants to mandate, unlocking phones after 60 days, and that sort of flies in the convention of the whole model with, with these very expensive smartphones, right? And having, these these mobile network operators recoup equipment costs, but.

I'll let you weigh in on that.  

Yeah the FCC announced another. Set of proposed rulemaking. And in this case, they announced it on Thursday. And they basically want to require mobile providers to unlock consumers phones within 60 days of activation. And under current regulations,  people who want to free up their phones, they are still basically Required to make sure their account is in good standing with their provider, which means the phone has to be paid off. 

Or they'll have to be paying an early termination fee.  And then this really varies differently from 1 carrier to another.  But I think. This doesn't really make sense if we're talking about the US market, specifically when it talks to post paid  and people who are on these. Three year plans or even on these, get a new phone every year plan to think that this might be more applicable for prepaid customers because those devices are a lot cheaper and there's a lot less of a risk.

for the consumer. I actually believe that the right move would be to force all prepaid phones to be unlocked. Not even 60 days and for post paid to be unlocked. If the device is paid off, I think that's the right compromise. Cause I just, it just feels weird for a device that's technically not owned by the customer to be unlocked. It just sounds like that creates a lot of potential financial problems and losses for the carriers. Obviously it would be bad credit for the people who do it, but. I just think the right move is free people on prepaid, make sure no prepaid phones are locked to the carrier, or at least maybe the 60 day unlock.

And then for postpaid, like it is already, which is if your phone's on, paid off, then they should be able to unlock it. 

Yeah, I agree. It does expose the network operators to financial risk in doing that. And. There are a lot of prepaid phones that are, they're quite inexpensive and even, they're very basic smartphones, but, you're typically required to pay, 100 dollars or 200 dollars for that device.

You activate it, you own it. But when you look, and this right, because you're our firm's expert on end devices these higher end, premium phones, like iPhones and whatnot, you're looking 12 to 1500 us, right? And, that's huge. And even if you were to institute an early termination fee, typically, those fees or maybe 150, 200.

and so if someone hasn't paid, but a couple of months against their phone, that's a huge financial risk to the operator. So I tend to agree with you on that point. And again, this isn't necessarily a mandate, right? This is what their current recommendations. 

Yeah, this is the proposed rulemaking.

So it's not something that would actually be put in place yet.  Yeah, it's a 1 pager, but I have a feeling that they put this out there  in their open meeting. And they will, I think they will vote on it in July. So I think they're waiting for the carriers and everybody else was involved to. Provide comments.

And we'll see what happens. But I'm always on the side of the consumer when it comes to most things, but I also want things to be reasonable and rational, and I don't really quite see the rationale or having somebody who's on a postpaid device that they don't technically own. Now that said, if I were to go buy a device outright, And I own that device because I paid for it entirely.

Then give me that unlock day zero, that unlock should be  easy. And I think what really the problem is, and I think what this might be trying to push is making unlocking easier and a smoother process because. Unlocking on a lot of carriers is not an easy process or a smooth one. So it should be like a button click.

It should be like I'm paid off. Can you verify?  

Yeah, no, I agree. I think that's a better, that's a better scenario because it is very difficult to unlock a phone. I've done it a couple of times and you've got to jump through 30 different hoops  to get it done after you on the device. So interesting, man.

Hey, let's go to my third and final work. We're flying through this given the holidays are upon us, but I want to talk about India and we've talked about India in the past. They recently conducted a 5g spectrum auction and it was pretty lackluster compared to the one that was held two years ago.

So in 2022 the 3 big mobile network operators combined spent roughly 18Billion US dollars on spectrum. And so the most recent spectrum auction that just ended only netted 1. 3Billion and it wasn't because of just, a select amount of spectrum. This was 800 megahertz, 900, 2. 1 gigahertz, 3. 3 and even.

Millimeter wave at 26 gigahertz. And Barty air towel was the top bidder. They spent, I think roughly they, they bought about half of what was finally settled here. And then the others, followed suit. And there's a lot of discussion around why this happened.

And there's a lot of speculation from the analyst community. One of the speculations is around the fact that, a lot of these mobile network operators, given the tranche from 2 years ago, hasn't equated to the monetization that they would have expected, right? And it does take a while to get these networks built out with spectrum.

So that's interesting, but I think there's another dynamic going on here.  There's been a hesitancy to democratize access to license spectrum for things like private networking. And it seems to me that the mobile network operators have a strong lobby influence on the Indian government. It's just my hypothesis and just, based on what I've read and the research that I've done here.

And so that in my mind, because if you look at the Indian economy right now, it is on fire. A good friend of mine just got back and he works for Freescale and, private networking, especially 5G can unlock a lot of efficiencies and manufacturing automation,  warehousing, logistics, whatnot to support the Indian economy.

And the, the Indian government is also investing in a lot of infrastructures  in the power grid, which has been very unreliable. So that's obviously necessary. As well as, just roadways, now a friend of mine said, it'd been, a few years since he'd been to India and it was, and it's just transformed as far as the ability to be able to move from 1 major city to another within India.

I've never been, I'm hoping 1 of these days, I am able to go and survey all this for myself, but I think there are a lot of things that are in play here that affected  this latest auction.  Yeah, it's clear to me something's going on. And, I'd love to hear your thoughts on what you think might be going on too.

I think what it is that a lot of the carriers haven't fully deployed the spectrum that they do have yet. And considering the rules in India for spectrum that you haven't deployed I feel if they're not, if they haven't fully deployed the spectrum that they already have, Acquiring more spectrum would just put them at more risk of paying for spectrum.

They'll never use and actually getting penalized for it on top of that. So I think that's really 4 of what's happening is there's just. The roll outs are not happening fast enough.  And I think maybe the carriers are trying to. Get the government to give them funds to accelerate their deployments so that they can then acquire more spectrum and continue to roll things out.

I think, in my mind that's part of what it could be. But I think unless we, if we are carrier, I don't know, we would really know what the actual situation is.  

Yeah. It's interesting, so there's a lot of spectrum left on the table. Why wouldn't the Indian government, come up with some sort of like  plan to democratize access to that and allow enterprises access to it.

And I don't know it's quite interesting. It'll be interesting to continue to watch that part of the world and see what happens. But it just seems like there's, there's some hesitancy there, with private networking and certainly to your point. I don't think because India has been so late with its auctions and its deployment of 5G.

They're not at a point where they're at standalone, where they can start doing things like slicing public networks to.  Guarantee, SLAs and that sort of thing for private networking and for enterprise, but that's going to have to change if India wants to remain competitive on the world scene. 

And there's also a lot of semiconductor capacity being built out there because obviously there's concerns around China with Taiwan.  And India has been a very friendly partner of the United States for many years, so it's all very interesting stuff. But hey, with that, let's go to your 3rd and final topic.

And you want to talk about Verizon and their concern around allowing spectrum to be given to AT& T for 1st net. 

Yeah, so this is a 50 megahertz block in the 4. 9 gigahertz spectrum. Which I actually don't think is great spectrum to be honest with you. I think Verizon is claiming that this spectrum is worth up to 14 billion. Because it's a nationwide band but I will say that 4. 9 gigahertz is very close to 5 gigahertz, which is an open band, an 

unlicensed, and, 

That is not a great place to be, because it's a very noisy band of spectrum. First and foremost, I don't think it's a great band. I think it will mostly be good for outdoor use, but even then, if you get too close to buildings, there's probably a lot of radiation from five gigahertz.

So that's my, my, my thought on this. So basically what it is the there's talk about the FCC giving this 4. 9 gigahertz spectrum to someone to manage. At 4. 9 gigahertz you're not getting much range.  It's not a very great band for long distance macro cells. So that's already like a sign, like I wouldn't want this spectrum if you paid me to if you could use it for small cells, I think it'd be great.

Cause I'm just thinking like wifi kind of range effectively. Yeah. So And in that light I do think it's interesting that Verizon is opposed to AT& T getting this for FirstNet because the idea is that FirstNet would be the administrator, which means that AT& T would get the spectrum to deploy it.

And I actually think it would be a good thing. I don't think that this spectrum is really good enough. For it to really give 18T much of an upper hand over Verizon or T Mobile. I do think it's interesting that Verizon is the most vocal in opposing this. But in general, I actually think that this would be a good band for small cell deployments.

And filling some spectrum gaps. 50 megahertz is not that much, but it's also not nothing. So I think it could actually be beneficial in some places, but in general I'm not really sure I agree with Verizon's assessments in terms of value or concerns that this would, impede their competitiveness.

And, they say that they have Verizon frontline, which is, a competitor to FirstNet. And I'm not really,  if this was a lower band, I think there'd be more justification here, but 4. 9 gigahertz is just not going to propagate very well. And it's going to be need to have to be very densified, which is expensive to deploy.

And I just think that when I'm looking at this, like I'm just thinking, okay, this is just going to be deployed in places where it's needed most. Even though it is a nationwide band.  I just, I don't see it being really that great for 5G Cellular. 

Yeah,  I agree. I agree. And I also agree with you on Verizon's misvaluation, it's certainly not worth 14 billion if it was, in the threes.

I could see the concern, but and I agree with you as well. It's probably a gap fill yeah, it'll be interesting to see how that turns out. But hey, man, before we, we close the podcast out this week, we've got the 4th of July coming up next week. Do you have any fun plans?

Nope, but, I have enough travel that I just would. I'm chill with just being home. I don't need. I don't even know when you were doing anything 4th of July. 

It's been crazy, right? Yeah, no, it's been crazy because I know you were in Taiwan for like almost 2 weeks with your family and I just concluded a 5 week.

It was it was yeah, 5 week travel stretch. I was in Vegas 4 times in 5 weeks.  And. The last event was HPE Discover. And again, I wrote a research net. So for our viewers and listeners, if you're interested in learning more about that go hit our website, moreinsightsinstrategy. com. But I am headed to Florida to my place in Isla Morada with my wife and my sister.

So we're looking  forward to doing that next week and then have a cousin flying in from California after they head back home. So I'm going to spend a two week stretch. Not going to try to work next week, going to try to take time off because like you, it's been, it's been a crazy June travel, but then I'm back at it in August.

I'll be at black hat back in Las Vegas, Nevada. But do you have anything in August that that'll be coming up for you? 

I have traveling, I have travel in July. Actually we'll be traveling  immediately after the 4th of July holiday to New York. For galaxy Unpacked and that's right.

And for an HP AI event, okay. I am I'm back on the road and then in September I'll be I'll be at EFA and there's some Oh, 

cool. Yeah, I've thought about attending efa, so that, that'll be interesting. We should do a podcast when you're there and have you share sort of your thoughts and your impressions while you're there.

It's in Berlin, right? Yep. Cool, man. All right. Hey, buddy, it's been another great podcast. I know for our viewers and listeners were a little bit late because again, I think we just provided all that context, but we're going to get this 1 posted. We're going to take a break next week and we'll be back the following week.

But  why don't you take us home? 

Absolutely. We hope our viewers and listeners found this week's topics interesting. If anyone out there would like to provide insights on a specific 5G topic for a future podcast, please reach out to us on social media. Will's at Willtown Tech and I'm at optional SOG. We hope you have a great weekend and please tune in again next week.

And don't forget to rate us and subscribe and have a happy 4th of July week.  

Happy 4th of July.