Welcome to episode of 199 of the G2 on 5G. It's the latest insight 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 and joining me again this week is fellow analyst Anshel Sag. But before we get started, Anshel, you and I are approaching a pretty magical number next week, episode 200, and you and I have been talking about what we should do for that episode. I just want to let our viewers and listeners and and and ask, please send us your feedback. Hit Anshel and I up on our Twitter X handles, our LinkedIn handles, our Facebook handles. He and I have some ideas on what we want to do, but we'd love to, to get the viewers and listeners to provide some input there. But with that said, I'm going to jump to the last minute too. Yeah, a little last minute. Maybe we should have done this a couple of weeks ago, but, you and I are just back from a lot of travel and we're getting caught up. I've got 5 client papers in flight. I know you've been, like, publishing research notes and Forbes articles almost daily. And I think we'll get into some of that on the podcast this week, but. Let me get started with my first topic. And so news broke recently about T Mobile and they're going to get serious about fiber. Now they've been in certain regions with fiber, but this is a big deal. The company is investing nearly 5 billion in a new joint venture with KKR. And I believe KKR is a is a private equity firm to purchase Metronet. And what this is going to allow T Mobile to do is obviously build upon its success with 5G fixed wireless access services with new access to fiber. And obviously they're going to monetize that. The details are a little thin right now. But this certainly makes a lot of sense because they have built an incredible franchise. It is the leading 5G FWA service in the United States. And so they want to build upon that momentum. So I think it's super, super smart. Another advantage in doing this is that it's going to provide T Mobile with access to fiber to support backhaul. So as they continue to build out their connectivity footprint in the United States, you've got to have fiber backhaul to those those radio towers to make all of this stuff work. It's a lot of money. It's 5 billion bucks, but I think. The dividends that they could realize long term are huge. So I hope I didn't steal all the thunder there, but I know you've got some opinion and some insight on this one. Sure. So what's interesting is I honestly hadn't heard of Metronet until this acquisition. Admittedly, I'm not a big wireline guy. Yeah. What's interesting is T Mobile is doing this as a JV with KKR, like you said. But T Mobile is actually spending 4. 9 billion. This is a 10 billion JV to acquire Metronet. 10 billion is no joke. I'm really curious about what this means for them. Because, they have 6. 5, they're expected to have 6. 5 million customers by 2030. And what's interesting is that KKR is already a minority investor in Metronet. So they already own a good chunk of them. And I'm just trying to figure out like what the strategy is. But I think the way I look at it, it sounds like it is, maybe one of those things that's like a mimicry of what AT& T is doing with their fiber. Like you said, where they're having a fiber network because that's the best for wireline. But also, it advantages them in their rollout of 5G and helps them with densification. I think my biggest question is like, what are Metronet's coverage areas? And who are their biggest what are their biggest markets? And from what I can tell, it's very Midwest centric. It looked like it was like, Minneapolis, like Chicago, Indiana. So I'm not really sure like how big they are and whether or not they're really worth the acquisition price. But it does seem like they, they are, they're in quote over 250 communities. And it looks like they're already in in Texas as well as through that, through a merger. So it seems like it's very much Midwest and Texas based. So we'll see what happens. Maybe they grow this brand to bigger areas. I personally am a huge believer in fiber. I think AT& T Fiber has really convinced me of that. I've lived in three different places with AT& T Fiber and they've all been fantastic. Over the course of seven years, I've had three hours of downtime, which is a uptime of 99. 999996. So I really do believe in well managed fiber being effective. Yeah, Hey, I'm just going to read, the tea leaves on this 1, but I, metronet is a regional player, but I believe that this gives T Mobile I, and I want to say fairly an economic in. To fiber. 5 billion is a lot of money, but relative to like, when you look at, and we're gonna talk about at and t and their two Q earnings, and, but the investment that the over investment at times that at and t is making in fiber, T-Mobile just doesn't have the same, size bank account as at and t and. Starting with FWA play to T Mobile strengths with their spectrum holdings and that sort of thing and using that spectrum and building that out. And and then, AT& T has been fiber first. And now they've recently launched their Internet air they've had a business service for some time, but they, they've had a consumer to that. Based on each of these companies, strings in their spectrum position, they executed, I think, to the right playbook and I think. This gives T Mobile an opportunity to participate in Fiber. And then I think with Metronet and Metronet's experience and access and work with, all of the different, Fiber solution providers, it's going to provide the structure that's needed to potentially grow Metronet from a regional to more of a national player with this joint venture. But, time will tell. I Yeah, I was going to add, I looked into a little more things. So the guys have seen that they actually get a little more coverage. That Metro nets and 250 communities in 15 states. It's actually pretty broad based. But yeah, what's interesting is most metronet service areas within those states are smaller cities in town, okay? So what that means is? Metronet is actually going to be a rural push. It's yeah, and that fits with T Mobile's focus It's gonna give them the bands that they need to actually build out their cell network in those rural areas So what this really is? Is this is a bandwidth push for rural Internet and if you look at like the cities, like the biggest cities that are covered are Aurora, Illinois, Des Moines, Iowa, Lansing, Michigan, Lexington, Kentucky, Rochester, Minnesota, and Tallahassee, Florida. These are all like tier 2 or smaller cities. They're smaller metros. It's all about serving the smaller metros. I think this is that's really what makes a lot more sense. And now it's 5 billion. They're basically buying a fiber network to build out their rural. And, and that fits with their FWA focus, which has been very rural with, with all the additional programs that they're doing to drive connectivity and bridge digital divide and all that. So interesting. So I think there's a lot there. Hey, let's go to your first topic. And it's our friends at AST space mobile and they announced on the 25th. Some more concrete details around their first commercial deployment. So I'm going to let you take it and then I'm going to jump in. Yeah. We know they're building satellites for communications mostly for 5g and they announced us a completion of the six, a successful completion of its first five commercial satellites called bloopers. Each of the satellite have communication arrays of 693 square feet. And are ready for shipment to Cape Canaveral during the 1st week of August with a 7 day launch window in September. They're shipping, they're completed, and they're shipping them to Cape Canaveral to be sent up to space. And they are going to put these 5 satellites in orbit and they're gonna, have them to create 5, 600 cells in premium low band spectrum with a planned 10 fold increase in processing bandwidth. And I'm just basically quoting the CEO. And they're looking to basically launch these to fill the commitments that they have with their cellular partners. They already have strategic investments from AT& T, Verizon, Google, and Vodafone and also have a new contract award with the U. S. government through a private contractor. The deals are lining up. The satellites are completed. Now it is time to set them into orbit and get them into correct orbit. They've already done this before, so this is not something that they need to figure out how to do. The launch just needs to go smoothly and the. The placement in low earth orbit needs to occur and hopefully it does, and we'll probably have updates when that happens. But this is a big thing. And I think from what I recall, I'm not a big stock follower but I think their stock did pop quite a bit. Looking at it, it's up 14 percent today. And it was up like 20 percent the day before, so it's up 45 percent in the past 5 days, about 16 a share. And if you remember, 19 on it, it was at 2 at its lowest. Yeah, I spent time with the team there in Midland on a couple of occasions. I've actually walked through the clean room. I've seen how these satellites are designed and it's incredible how the arrays fold up and into a container. Yeah, it looks like it fits on a crate, like a, like it's, I know it's not small, but it looks like you just put it on the back of a truck. Yeah, you do. And and it's because that they, the way they've designed the antenna array to fold up, it's very efficient. And last time I was there, I, I walked the clean room with the bell the CEO and what, one of the aspects of the bluebird design is that it is larger that is concerning some people, but because it's larger in the and conversely, the antenna array is larger. It's going to require a space mobile to launch much fewer satellites than Starlink and, Starlink they're estimating that they're going to need 2 to 3000 of their smaller low Earth orbit satellites to complete their constellation. Space mobile is going to need, like a small percentage of that. I think the number. Is 100 or 150. And also what's really impressive, and spending time with the company, I've been able to dig into its patent portfolio and a bell, the CEO actually. Has authored, several of these patents as well. And the company has been working with Nokia with a souped up version of its air scale infrastructure. And, when you put all of that together it makes for a very compelling value proposition. And then you mentioned, all the investment from the companies named. Vodafone hasn't formally announced their commercial deployment plans, but I do expect it to happen after the launch is achieved in September. One of the big challenges and I know you follow SpaceX as well, they had an incident where they had a malfunction and so that's put a crimp in the schedule. It's probably gonna back a lot of things out because. They lost, I think, 20 or so Starlink satellites in this incident. And so hopefully that launch window in September will not move out. And our viewers and listeners should understand that a lot of this is dependent on. The fact that they're using space X to launch these these space, mobile production bluebirds into space. Now, I think there are plans in the future for to move away from Sterling because. Obviously, there's competition there, but but, yeah, it's exciting. It's exciting for the company. I think it's exciting for in general, because having more competitors involved is a good thing. It's going to raise the water level. It's going to drive innovation and, you've got Amazon that's also focused on this as well. We're truly in the space race and so it's exciting. Congratulations to the space mobile team. For this important milestone when reading the press release they caveat the fact that this is also based on whether cooperating. So you've got a factor. There are a lot of factors that are going on for them to, get these 5 production satellites into space in September. But. It is super exciting, but hey, with that, let's let's go to my 2nd topic. And I want to talk about CrowdStrike and the big outage that occurred last Friday. And I did publish a Forbes article on this and obviously CrowdStrike is a security company and just to give everyone the Reader's Digest version on what happened. There is a flood update. Unfortunately, it was a bootstart driver, which did not allow the remote reset or a patch to be pushed through because all of this that CrowdStrike delivers is is obviously sass and it's cloud based. What that did is it really impacted a lot of businesses. That don't have necessarily savvy it people to be able to address the situation delta was grounded for a number of days airports around the country experienced outages. I think you even reported Starbucks was having issues, right? So that. That this was pretty wide ranging and there is actually a congressional hearing that's occurring today with the CEO by the way, CrowdStrike is headquartered in Austin, Texas, where I'm I'm based as well, but, it got me thinking as I published the Forbes article, and by the way, for viewers and listeners, go hit my X handle, go hit my LinkedIn handle. If you want to read the article. I go into a lot of depth there, but it, it provides a learning experience for DevOps and how you manage updates. And it just got me thinking, is there a learning opportunity here for M and O's because a lot of what they do on the network side of things is software defined and, 1 error and you can bring down an entire network. I think it's a learning opportunity for the cyber security industry, but I think it's a broader learning opportunity from a developer operations perspective. And certainly, I think can learn from this example as well. I'd love to ask your opinion. Like, where do you see telcos? Maybe learning something from this massive outage. I think there's a lot of things to learn. It seems like Microsoft has started to talk about revoking kernel level access to prevent something from this ever happening. I think they will be able to convince the European regulators that they should be able to do this. Because they claim that the European regulators are the reason why they couldn't. It's actually technically, Anshel, as I dug into this, it's not specifically kernel level access, but it's pipeline level access, which is, you're probably splitting hairs on that, but it was a very tight integration. And this is something that, that companies like CrowdStrike do. So it's, the access is still, it's not like they're directly free. Affecting the kernel, but they're able to, they're at kernel level in terms of how they're able to affect the operating system through the pipeline. And there, as a result of that, it causes a blue screen. That's. Basically requires physical intervention, right? And by the way, up to 15 boots for many of these companies that experience that particular issue of crowd. Yeah. And the other thing is that, microsoft had to deploy like Microsoft deployed a fix with a USB drive that you could plug in. But that requires physical level access. And so many of these systems, are not their remote systems or, their laptops. So like people had to go in and physically, stack laptops over the weekend and, work on thousands of PCs some of the 10, 000, tens of thousands of PCs. It was a nightmare for a lot of companies. But I think ultimately what this boils down to is there's a, there's something structurally broken in my opinion with CrowdStrike's implementation. And sounds like they didn't really have the right processes in place, which is insane to me. I tweeted something out over the weekend about the CEO having, been a part of McAfee's yeah, that happened a decade ago and by the way, I mentioned my Forbes article. So I gave you some props I'm, not even the one who found that I just saw it and I was like, oh look at his linkedin. And yeah He was not with the company for much longer after that, but he was the cto at McAfee as I dug into that Yes cto and he was gone, you know within six months. Yeah But yeah, I just think that there's a lot of weird things that happen that shouldn't have happened You and I think CrowdStrike is going to lose a lot of customers. I think the whole 10 Uber eats gift card was a really dumb idea, but they pulled it back. Dude, the fact that they pulled it, it's even worse. It's just eat it at this point. Not, I'm not being, punny, but like the cost at that point, but it just, it just shows you like CrowdStrike. Executive leadership is not strongest. No, it's not. But I do think it's a learning opportunity for industries, beyond cyber security. And certainly for the mobile network operators, because again, so much of what is done, especially in a 5G world is software defined. I think there's an opportunity and it could lead to tighter rigor to your point. And ensuring, improved resilience on, on mobile networks that we all rely on, and I rely on for the broadband that's supporting this video chat. I use T Mobile's 5G FWA service here in Bastrop. But hey, let's move to your second topic and you want to talk about Apple and a rumor that they may be ditching Qualcomm 5G modems next year. Yes. This is a rumor that refuses to die. This was reported by none other than Ming Chi Kuo. He is a known leaker of Apple news. Also a recent follower of me on Twitter, which I I've been following the guy for years and out of the blue he followed me after the CrowdStrike thing happened. I thought it was funny, but yeah, he basically saying that they're going to move away from using Qualcomm's modems next year. They're going to start in the iPhone SE. And then move on to the iPhone 17 slim. So what it sounds like is if they're going to do this, they're going to be doing it in the non flagship devices, the lower volume products which, if there are problems that will reduce the impact on a company, but it allows them to, for the most part, trial it out. And I think that's a good move. The reality is that does have some impact on Qualcomm's business, but it will not be a complete transition. It will be a partial transition, which has always been what was expected of Apple. Qualcomm was actually already expecting that Apple would have moved away from them this year, but they had to delay that move. And the reality is Apple's not, transitioning entirely. So they're going to have to continue to buy Qualcomm modems and continue to have to license Qualcomm IP. But I do think this will potentially, if it happens, be the final end of the relationship between Qualcomm and Apple. I also think that Apple will most likely not support millimeter wave which is a downside for Verizon customers. But maybe they will in the, down the road. I just think that's an added cost that Apple doesn't think they probably need to bear. And it does, complicate the modem and make it more expensive. RF more expensive. We'll see if they actually add a millimeter wave just for Verizon because that's really the only carrier that cares about it now. I do think in the long term millimeter wave will actually be necessary in highly dense areas, but, until then I think that millimeter wave is going to be a premium, ultra premium feature mostly for Verizon customers. And Apple obviously does want to keep Verizon but they also, Verizon does let OEMs ship with our millimeter wave now. An interesting rumor. It's been reported multiple times and failed to be true. I will say that we'll, I will see it when I believe it. And we'll see if it actually happens this time. So I know, this off the top of your head. So if they do start moving away from Qualcomm next year, it's 2025. How many years have transpired since. They acquired that Intel business and started trying to work on their own modems. Has it been three years? Five years. Five years. Yeah I originally said it will probably take them anywhere from four to five years to make the transition, but it looks like it will have been six years by the time they actually do it. That is a flippin eternity in the tech industry. It's three full smartphone generations. If you count a generation being, two years, but, refresh cycles, yeah. And over half a G because these G transitions are about a decade in length. Wow, crazy, that guy seems pretty reputable. I, I hit his his ex handle and saw the number of followers. Yeah, it's it's super interesting, but Hey, man, let's leave my 3rd and final topic. And I want to talk about T Mobile and just for a little bit of context. I have served as a judge for the T Mobile for business unconventional awards. This will be the 3rd year that I'm doing it. And it's a fantastic opportunity to highlight companies that are using 5G in very innovative ways. And and obviously this is T Mobile for business, so they're very focused on their enterprise customers, but they're also focused on their education customers and their their government customers. And as a judge. We last year, we we awarded 1st place prizes to companies that included the Walt Disney Studios, emphasis Boston Children's Hospital in the city of Bellevue, Washington. And so the categories are the same this year. There are 3 areas there's innovation and customer experience, innovation and employee enablement and innovation and industry. And then for government and education, there's a 4th category that focuses on innovation and community. Now, the new wrinkle this year is that last year, we actually had Malcolm Gladwell, and I'm sure a lot of people know who Malcolm Gladwell is. He's a pretty famous author. His 1st book was the tipping point. He writes about a lot of interesting angles with business and society and that sort of thing. He's also going to be our master of ceremonies this year, and there's going to be a new category called the tipping point designation. And this is really highlighting and awarding the company that did the most to challenge the status quo and spark transformative change. This has been a lot of fun for me. This will be the 3rd year. It's at Mobile World Congress, Las Vegas. And I think this event has allowed T Mobile for Business to really find an event and really become a headliner and and provide visibility for the growth and what they've done with T Mobile for Business because It's under Callie Field. It's been a methodical build adding services that can better compete with the likes of Verizon and AT& T. But but I have a lot of fun with this. One of the judges is the the leadership for the customer service organization for TFB. And then there are two Brits that have been judges. 1 Philippa works for the Wall Street Journal trust, which is their sponsored content side of their house. And then Matt Griffin, who is a futurist, and I like to call him my cheeky British friend. So we're getting the band back together for a 3rd year. You'll be hearing more for me about this. I did publish a research note recently on the more insights and strategy website. So if you want to learn more go check that out. If you are a T Mobile for business customer and you're interested in entering, you still have time entries are being accepted through the end of July. And if you have any questions, feel free to hit me on my, my LinkedIn or my Twitter handles, and I'll provide more information. But you may not have a whole lot to add there, but what do you think about all that? No, I think it's good. I think it's good that they're continuing to do it and continuing to involve you mobile industry expert in their awards. Yeah thank you, my friend. Hey, let's go hit our final topic. We're running a little bit long, but we've had some great discussion on T Mobile and CrowdStrike and AST, but you want to talk about AT& T earnings, so I'm going to let you take it away and I'll add some color. Yeah AT& T reported earnings earlier this week. And they basically had a pretty strong earnings. The interesting thing is that they reported that their post paid net ads are 419, 000 and phone churn was 0. 7%. Yeah, which is the 2nd lowest recorded total for a 2nd quarter. And basically what they're saying is that their business, their core business is strong. They had a 29Billion dollars in revenue, which is actually down from a year earlier. Slightly, not so slightly. And that mobility revenue was 20 billion which is just, again, just below the expected 20 billion figure. And that wireless wireless service revenue was in line at 16 billion. So basically they, they just nailed or just slightly missed most of our targets, but The important things were that net additions were up and that they're actually 40 percent of their fiber customers are also mobility customers. They're doing a lot of really good things. And I think that's why, if you look at the stock, it went up on these, on the earnings, even though they missed. Once again, earnings is not everything. But it's quite clear that, AT& T is in a good place. And they're obviously going to have to work to eek out more margin out of these revenues. But ultimately, their stock was up 3% on the news. And it's because, their net ads are up and AT& T is doing their core business right. And, I'm a huge proponent of them focusing on that business. Because ever since they, got rid of their entertainment business, they've been doing really well. Yeah, they've been focusing on what they're good at, and I think, there are a couple other things to point out here for why, they saw their stock price bump a little bit free cash flow improved nearly half a billion over last year. And when you look at their fiber net ads that rang at 239, 000. And so that marks. 8 or 9 consecutive quarters of over 200, 000 net fiber ads. On a rolling basis, and so that really points to the strength of fiber that sort of underlies the mobility services for obvious reasons. And I think when you look at all of that, and what you pointed out, and then. You look at what they're doing with Internet air and growing their fixed wireless access footprint for consumer and business. I think the latter gives them some nice upside as well. To your point, great execution, flat in some areas, but continued growth and fiber, which really points to the quality of what they're doing and fiber. And, you just spoke to it, you've had 3 experiences in 3 different places you've lived in, and it's been fantastic. I had a TNT fiber and Austin when I was living there, fantastic, had very few issues with it. Performance up and down was great. And yeah, so it's great to see them executing on that. It is a mobile network operator earning season. So I'm expecting that on a future podcast. We'll be talking about, others as well, like T Mobile and Verizon. But with that, my friend, we ran a little bit long, but we had a lot of great conversation wanting to 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 On Shell SOG. We hope you have a great weekend and please tune in again next week and don't forget to rate us and subscribe.