​We attended the operator and vendor consortium of 5G Americas.  The themes of the show were: 5G, spectrum, cell siting, Asia-Pacific operator progress.  For the second time in the past couple weeks, we saw FCC Commissioner Michael O'Reilly present, and his key messages were similar both times, focusing on CBRS, C-Band and 6 GHz.  In attendance from the North American service provider side were AT&T, T-Mobile US, Shaw, and Sprint (we focused on NA operators mainly in this write-up).  Notable vendors included Cisco, Commscope, Ericsson, Intel, Kathrein, Mavenir, Nokia, Qualcomm, and Samsung.  We would say the most important theme from the show is the surge in interest in unlicensed spectrum, both for the use of mobile operators, as well as competing carriers, as well as by enterprises both for indoor and outdoor applications.  For this write-up, we are focusing primarily on comments made by some of the leading operators who attended the conference.

AT&T discussed mmWave, future 3GPP releases, 5G phones, Mobile Edge Computing and indoor cellular, mid-band spectrum strategies, 5 GHz spectrum usage, Mobile Edge Computing (MEC), StandAlone (SA), among other topics.  AT&T views mmWave as just a tool in the toolkit, so to speak, and not the only spectrum that is useful in 5G.  It considers mmWave to be most helpful in urban and potentially indoor settings.  Representatives said that future 5G-oriented Releases 16 & 17 are expected to be software upgrades to existing hardware and won't require new equipment to incorporate these new capabilities which will include network slicing.  AT&T is making a big deal about its Mobile Edge Computing (MEC) initiative.  At the conference, it emphasized MEC as having two main parts: a) expansion to about 100 edge sites (mostly Central Offices) from about 20 central locations in the LTE era and initially supporting packet core, and b) Microsoft Azure services managed end-to-end by AT&t.  The company also emphasized that it plans to pursue some indoor cellular opportunities, some that currently leverage 5 GHz using LAA technology, some that will leverage CBRS and some that will leverage mmWave.  We get the impression from AT&T that it is open in how it pursues future mid-band spectrum strategies.  Its strategy could change based on: a) the timing of the CBRS PAL licenses (currently slated for June 25, 2020), b) the potential for C-Band  private auctions (potentially in the mid 2020 timeframe), c) the potential for some or all of the 6 GHz spectrum availability (where Wi-Fi 6 would co-occupy), as well as other factors.  We learned that, at least in certain regions, the company is making very ample use of 5 GHz spectrum using LAA techniques.  AT&T seeing its picocells (small cells) get around 100 Mbps from LAA out of a total 130 Mbps inclusive of around three other licensed spectrums.  We were surprised the company makes such ample use of unlicensed spectrum where Wi-Fi currently exists.  The 5 GHz experience of AT&T leads us to think that 6 GHz, which promises to offer far more spectrum that the 5 GHz swath presently available, could be very beneficial to mobile operators and their consumers, as well as the Wi-Fi industry, and its consumers.  AT&T expects that by this time next year, it will be "pushing" 5G to all its customers, part as a result of handsets adopting 5G capabilities, part the result of its network seeing nationwide coverage.  Of the services that AT&T operates, it is installing mainly Packet Core in its MEC systems.  AT&T is also planning to run Microsoft Azure services in its MEC locations.   It expects that both Packet Core and Azure will see a 10-20 ms latency reduction by being located in MEC locations.  AT&T says that StandAlone (SA) is "just new software," and downplayed the significance of the upgrade from EPC/NonStandAlone (NSA) to SA.

Sprint "is all-in on 2.5 GHz mid-band deployments for 5G services."  Given the company's potential merger with T-Mobile USA, we view its network-build-out choices as being somewhat limited.  It has limited options because it increases its near-term value to its acquirer, T-Mobile, if it deploys 5G in 2.5 GHz.  Likewise, it is doesn't implement in mmWave, this reduces overlap with T-Mobile, who is deploying there.  The company reiterated that it had launched 5G in 9 markets.  It is seeing its peak speeds on 5G (aided by the fact that it has simultaneously upgraded hardware to Massive MIMO) be about 3-5 times that of its 8T8R LTE systems.  It currently covers 11M POPs and 2,100 square miles with 5G.  Sprint also shared that it sees RFPs from customers to replace Wi-Fi with 5G, though it didn't share more about this topic.  The company's experience is that in upgrading its macro base stations to Massive MIMO 64T64R capabilities, it is getting 3-4x faster throughput than its 8T8R systems, though in the field these measurements vary widely.  Additionally, Sprint said that its Massive MIMO systems relative to earlier systems show "generally the same coverage," with 1-2 dB better sometimes.  Sprint is exploring ORAN and vRAN but "not adopting near term."

Shaw (Canada) presented its mobile LTE and 5G efforts and plans.  Shaws plans are interesting because the company has significant cable services deployed in Canada.  The company said nearly all the mobile technology it has installed in the past three years are "5G-ready."  It will use 5G first in 600 MHz, then in mid-band (probably in 3.5 GHz) and the last in mmWave. Shaw expects that low-band 5G handsets will be available in 2020, and, similar to what AT&T said, it expects that is when 5G mobile will start in earnest in Canada.  Shaw admitted that it is behind where the US operators are in deploying 5G, but offered no apologies, as it felt it is where it needs to be from a competitive standpoint in Canada.  Almost laughing, Shaw explained that it would never consider deploying mmWave along highways, and that only high-density locations would get mmWave coverage.  Shaw's view that mmWave is for high-density locations was shared universally by other operators in attendance, including AT&T, Sprint and T-Mobile US.

T-Mobile US spokespersons explained that mmWave has seen some challenges, relative to initial expectations and that while it does get mmWave to operate beyond near-line-of-sight, the view of T-Mobile is that mmWave is "just part of 5G."  T-Mobile expects 3GPP Release 16 to be completed in 2020, but that it will be 2021 before it deploys Release 16, which won't require "a massive hardware refresh" and which will incorporate industrial and connected vehicles features.  T-Mobile views 5G as being appropriate for indoor installations because while mmWave has challenges penetrating glass and concrete, but when 5G operates in low and mid-band spectrums, the "issue goes away."  By 2020, T-Mobile expects StandAlone packet core to be ready, but since its current EPC/NonStandAlone (NSA) systems are already virtualized, the upgrade to SA is "not a forklift" upgrade.  T-Mobile says virtual RAN (vRAN) "will take time," and that it will "need accelerators," which we take to mean FPGA-based Network Interface Cards (NICs) or the like to allow servers to operate faster than just x86 processors will allow.

​The main theme of the the Huawei HAS 2018 meeting keynotes was Artificial Intelligence and, secondarily, nearly ubiquitous networks connections across the world.  Huawei expects 86% of enterprises to have experimented with AI by 2025 (<5% in 2018).  It is leveraging AI across nearly all its products and will offer a full stack AI solution to all Huawei partners at its @Huawei Connect 2018 conference (Oct 10, 2018).

More specifcially, Huawei is using AI to elevate products & solutions to new levels: cloud, networks, devices, EI, SoftCOM AI, and Intelligent phones.  The company's strategy has changed over time and is now AI-focused:

2006-2011: Single strategy: All IP
2012-2017: SoftCOM: All Cloud
2017+:     All Intelligence: SoftCom AI (autonomous networks / services 2.0) - this reduces operating and maintence costs

The company expects that networks will be 10x more efficient in the operation of equipment as a result of AI.  

By 2025, Huawei expects 440M AR/VR users, 40% of cars to be 'connected," 80% of users with access to mobile broadband, usage of 1 Gbps / user / day (versus .03 in 2018) and 20B connected devices worldwide.


Connected Devices Forecast (Huawei) by 2025: 40B sensors and 100B connections.  This thinking is based on data including that there are: 

• 4B livestock in the world
• 300m streetlights
• 1.8B utility meters
• numerous bike programs in major cities
• numerous greenhouses

The company's product lines are very diverse; to wit, the company introduced a helmet for the blind, which will be available soon.  

Huawei expects NB-IoT (LTE-based IoT capability) to reach almost full coverage in China in 2018.  Additionally, the company expects NB-IoT to reach 100 networks by the end of 2018 (versus 39 in 2017) and to be available on 1.2M base stations (from 0.5M in 2017) and to be connected to 150M connections (versus 10M in 2017).  

The company boasted about several developments:

1. Chipsets for cloud data center systems.  The company highlighted its internally developed Atlas (intelligent cloud hardware).
2. The company expects its cloud services will become one of major 5 clouds.  Uses smart NICs for CPU optimization and is 'open.'
3. The cloud service from Huawei will be low cost because Huawei makes all the equipment necessary to build this cloud
4. Internet of Vehicles system was was built for Group PSA (French auto company known for the Peugot brand)
5. 5-An example of the company's "Intent-Driven Network" was its AI-based premium home broadband for a better user experience on Chinese based PON systems in use today.  Real time data collections allows 40% reduction on door-to-door service and fault prediction of 85% of Wi-Fi faults and 30% of all network faults.
6. AI-enabled, software-defined cameras are now available that perform low-light feature extraction (e.g. facial detection/comparison) over 85% of the time.  And, using the Huawei AI chip, it can outperform CPUs by 25X and GPUs by over 6x.
7. VR/AR will create a $2.7 trillion ecosystem in the future.  The company reminds the audience that it demonstrated teh first CloudVR Proof of Concept at the March 2018 MWC conference.

Q&A after keynote:
Mr. Eric Xu, Rotating Deputy Chairman of Huawei dodged several important questions relating to trade tariffs, cloud business unit revenue targets, growth rates of each major business units, specifics about AI full-stack claims made during the keynote, and instead focused generally on the AI theme.  Xu did, however, however, answer a handful of questions that were quite interesting:  Huawei won't acquire DRAM, Flash companies; and that 5G is not so revolutionary - it is just an evolution following LTE. Additionally, Xu mentioned that in 2H18, Huawei will launch end to end 5G solutions  and by 3Q19, it will launch 5G capable phones.  Xu said Huawei will continue to work with Intel on x86 for the foreseeable future.

More Q&A specifics:
Trade Tariffs and ZTE.  (In a moment of levity, however, Eric Xu smiled when the words ZTE were mentioned - recall that a day earlier, ZTE was penalized by the US).  We will focus on our customers and will ultimately survive. 

Cloud 1.5B by 2020, will you hit the target?  Will offer cloud services to telco service providers.  Huawei smartphones will leverage the Huawei cloud.  Enterprise customers will consume cloud services such as video, computing.  In future, trend will be enterprises will move to hybrid cloud and public cloud will take a major share.  Huawei cloud provides compute/storage/networking to enterprises and government.  200K x86 servers in Huawei cloud.  Revenue with external customers - won't share it with you - maybe .  

AI chipset question:  We don't position chipset as a standalone business - won't sell to external customers.  Will be used to differentiate Huawei products.  Smartphone - we use multi-vendor strategy always; in other worlds; have multiple Qualcomm, NTK and others.  Remain committed to multi-vendor strategy.  Don't want vendor lock-in, however.  If we only have one vendor, what might happen to our smartphone business, Xu asked.  

Enteprise business growth? Declined to comment on specifics, but said he encourages each to grow rapidly.  

How do customers get to 86% AI usage (the question was asked by an audience member by incorrectly referring to the statistic that was made during the keynote - specifically, Huawei said AI experimentation will be 86%, not AI usage)?  Will give clearer answer at Huawei Connect 2018.  For now, can share that we will use AI on ourselves first, then help customers on various functions such as finance, human resources, networks, etc.  

Supply chain - will you acqire your suppliers?  We do joint innovation with suppliers to meet Huawei's needs; push multi-source strategy, however.  Will not invest in DRAM, display, flash.

5G wasn't mentioned much in the presentation, why?  We don't have as high expectations as some others; 5G is just one of many products we offer and is just a natural evolution from 4G.  You don't have a fundamental difference between 4G and 5G - consumers just see faster speed and lower latency.  LTE already support autonomous driving.  Past couple years, governments have regarded 5G as too important.  June 2018, will only address eMBB - faster speeds.  2019 - will have fully 5G compliant system that does low latency.  4G is pretty robust; we don't see 5G as a national coverage network - it'll just focus on city centers.  However, once one carrier announces 5G, then all others must.  50% of Chinese have wireless connection capable of 4K but there are still no 4K stations.

2H18, end to end 5G solutions available.  3Q19, will launch 5G capable phones.

Share trends for Huawei at operators.  Revenue growth of telecom services is a challenging topic.  This revenue growth topic is why titan operators express concern about moving to 5G; instead, Huawei thinks moving to improved intelligence will assist operators.  Video will become more and more important as telcos become media companies too.  

Will AI become a privacy concern?  Any technology has double-sided effects.  With AI, some believe it can be dangerous.  Xu believes in the wisdom of man.  Look back to history of mankind, and our humanity can do same for mankind.

Will Huawei find alternate suppliers for data center products?  (Xu also smiled about this question before answering).  Today, Intel is dominant player.  Our point of view, we look forward to more diversified landscape; but we work with Intel mainly now.