Today's big news from the FCC is that it will open up 6 GHz to Wi-Fi and other unlicensed uses. The FCC authorizes "1,200 megahertz of spectrum in the 6 GHz band (5.925–7.125 GHz) available for unlicensed use," and further explains that it authorizes "standard-power devices in 850 megahertz in the 6 GHz band. An automated frequency coordination system will prevent standard power access points from operating where they could cause interference to incumbent services." We see that this vote is very beneficial to Wi-Fi chip and systems companies that serve both consumer and enterprise markets. We also expect that outdoor systems that take advantage of this new spectrum may benefit wireless ISPs (WISPs) and their equipment suppliers. And, also, the FCC's statement that an automated frequency coordination (AFC) system will be used to prevent interference from existing microwave transmission systems. With that background, we have compiled a list of companies that will benefit from the FCC's vote.
WLAN Semiconductor companies Broadcom, Qualcomm, ON Semi, Celeno, and Intel. In our research of the WLAN Infrastructure semiconductor market, these are the vendors we expect to sell Wi-Fi radio chips to devices such as Access Points, Broadband Customer Premises Equipment (CPE) with WLAN, and Consumer Routers. A new class of Wi-Fi that takes advantage of 6 GHz is now called Wi-Fi 6E. Broadcom and Qualcomm have already made statements about Wi-Fi 6E in the past month or two, and others somewhat more recently. Historically, Broadcom and Qualcomm have enjoyed significant market shares of the enterprise WLAN Access Point market, while players in the consumer AP/router/CPE have included a wider list of players including Broadcom, Qualcomm, ON Semi (formerly Quantenna), Celeno, Intel, Realtek, Mediatek and others.
Enterprise WLAN companies Cisco, HPE Aruba, Commscope, Extreme Networks and Juniper. While each of these companies has launched Wi-Fi 6 products over the past couple of years that operate in 2.4 GHz and 5 GHz, we expect this group of companies to release Wi-Fi 6E products that connect over 6 GHz over the next year. We expect initially that 6E enterprise products will sit at the high end of product portfolios, selling at higher prices than 5 GHz and lower products. The FCC commented in today's press release that "The notice also seeks comment on increasing the power at which low-power indoor access points may operate," which means that there is still some work to do in figuring out whether these Wi-Fi 6E devices can operate at powers levels more common in enterprises without needing to connect to an AFC. We are sure there is more to come on this topic.
Consumer WLAN Infrastructure companies NETGEAR, Commscope, Technicolor, Amazon and Google. We expect NETGEAR to be an aggressive player in Wi-Fi 6E, just as it released super high-end Wi-Fi 6 products in its Nighthawk product line. We expect Broadband CPE vendors such as Commscope (through its Arris brand), Technicolor and others to benefit as they seek to capitalize on the new spectrum, which should allow the delivery of Wi-Fi at higher speeds and to more devices in the home. We wouldn't be surprised to see consumer mesh vendors such as Amazon (through its eero acquisition) and Google to offer Wi-Fi 6E products, but these probably come a bit later than traditional router and Broadband CPE devices.
Wireless ISPs such as Etheric Networks and Common Networks (both located near the 650 area code that we used to name our company, 650 Group) will likely benefit as they will be able to offer new WISP services over the new 6 GHz spectrum. Since the spectrum is new, essentially unused and there's lots of it, we expect that these, and other WISPs in the US market, can benefit by expanding beyond the current unlicensed spectrums commonly used today, such as 60 GHz, 5 GHz, 2.4 GHz and 900 MHz spectrums. We think it might take a year or two before the WISPs can capitalize on these spectrums, but we see it as a windfall.
WISP suppliers such as Ubiquiti Networks, Cambium Networks, Airspan, and others will be likely beneficiaries. These suppliers sell to WISPs and other operators to enable "last mile" services that compete with fixed-line broadband services such as cable modem, DSL and PON. As we alluded to above, the 5 GHz spectrum is quite crowded, and thus, as 6 GHz becomes available for outdoor use, we expect that a new class of equipment will take advantage of this ample spectrum to deliver broadband to a more significant number of business and consumers. The FCC has a "goal of making broadband connectivity available to all Americans, especially those in rural and underserved areas," according to its 6 GHz press release today, and we see WISPs as one of the main constituents of serving this goal.
Mobile network operators AT&T, Verizon, T-Mobile, and US Cellular. Similar to WISPs, we expect that mobile operators will eventually leverage 6 GHz to deliver Fixed Wireless Access (FWA) services (and potentially mobile services) to consumers and businesses. In suburban and rural areas, we have already seen some operators, notably Verizon, deploy FWA in licensed mmWave spectrum (in 20 GHz and 40 GHz ranges) - we have seen operators pare back on plans to deliver services, though they haven't stopped deployments or anything. But, we see 6 GHz could puff some new life into FWA plans because this is a lot of new frequency and since it is lower frequency than mmWave, does not suffer as much from immovable obstacles such as tree leaves, windows and precipitation. Additionally, we see mobile services could benefit as well, as we have already seen operators such as AT&T leverage 5 GHz unlicensed spectrum in delivering mobile service on its small cells in locations such as New York City, so we would expect mobile operators to eventually take advantage of 6 GHz in a similar fashion. But, incumbent services (point to point microwave systems) are more likely to interfere with mobile operators' plans in urban areas, where paradoxically, there is more need for this extra bandwidth, so we think operators will take some time to sort this interference out.
AFC services operators such as Federated Wireless. Given that the FCC announced a specific need for AFC services in its media blitz today (see above), we point out that Federated Wireless has already announced an AFC service. Just as Federated has competition in its CBRS SAS service from players such as Commscope, we would not be surprised to see new competition in AFC services.
Federated Wireless, a pioneer in the CBRS SAS market, just announced its plans for an AFC for the upcoming 6 GHz spectrum in the US market. The company expects that 6 GHz products and its AFC to be commercially available sometime in 2021, and potentially as early as late 2020. For those who are unfamiliar with what is behind this announcement, let us explain. Citizens Band Radio Service (CBRS) is a 150 Mhz wide broadcast band from 3.55 GHz to 3.7 Ghz in the US market, and Federated Wireless is one of main companies offering SAS, which enables multiple spectrum-users to share the 3.5 GHz spectrum. So, now that the US FCC is planning to open up the 6 GHz spectrum as unlicensed, allowing Wi-Fi 6E and 4G/5G cellular (or other systems) to operate, there’s an emerging need to coordinate what exact frequency bands in the 6 GHz range should be allowed on a per device basis; this service is called an AFC (automated frequency coordinator).
We think the timing for Federated Wireless’ AFC announcement is good. There is considerable excitement about Wi-Fi 6E (the version of Wi-Fi 6 that will operate in this new 6 GHz spectrum). Consider that two significant Wi-Fi infrastructure chip companies, Broadcom (on January 7, 2020), Qualcomm (February 25, 2020), announced products that operator in this 6 GHz spectrum.
There is some controversy as to whether the AFC service will be needed for some or all of the working device types, installation locations (indoor or outdoor) and device power output levels. There are two camps, which can be summarized as “what the Wi-Fi companies want,” and “what the incumbents want.” The Wi-Fi companies have repeatedly explained that requiring an AFC for very-low power or low-power 6 GHz use in the US will slow down the market (VK Jones, VP Technology of Qualcomm Atheros said so last August, 2019, for instance). However, Federated Wireless has studied multiple major cities in the US and found that there are some cases where, in populous areas, the new 6 GHz devices could interfere with incumbent services like microwave links of mobile operators, public safety, utilities and transportation. We understand the FCC is reviewing this information and may communicate with the public as soon as April 2020. We expect the various parties (Wi-Fi players, incumbents, FCC, AFC players) to make some concessions in the coming months.
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.
We attended the Qualcomm Wi-Fi 6 event held in San Francisco today. Representatives from partner companies who attended included HPE Aruba, Cisco, Commscope, Boingo, Netgear, Rivet Networks, AMD, and Microsoft. The principal announcement at the event was that Qualcomm announced its Networking Pro Series Platforms which are focused on Wi-Fi 6 capabilities, semiconductor systems which are in initial stages of availability and expected to be available on systems in coming months and quarters. The new Networking Pro Series chip systems hit four price points generally segmented by the number of antennas (more at the higher end) and are primarily targeted to the enterprise market, though we learned that some of the high-end consumer ("prosumer") vendors plan to use these chips as well. The new Networking Pro products have unique features compared to previous Wi-Fi 6 chips introduced from Qualcomm, including upstream MU-MIMO and upstream OFDMA and the design claim is that these can support 1,500 simultaneous users both upstream and downstream.
In the past, it could be said that Wi-Fi and cellular compete in some markets. We found it interesting that Qualcomm said that it expects that Wi-Fi 6 mesh products will be the way to get 5G millimeter-wave signals indoors. Several Qualcomm executives echoed the message that Wi-Fi and cellular are complementary, even though many Qualcomm service provider and cellular equipment partners do not subscribe to this point of view.
Qualcomm shared some impressive numbers. It ships approximately 1B Wi-Fi device chips per year at a run-rate; it has shipped over 4B Wi-Fi chips since 2015; and by comparison, had shipped 1/2B chips by 2010. It has shipped Wi-Fi chips with MU-MIMO capabilities to a total of 0.75B client devices. Qualcomm claims it has found that Target Wait Time (TWT) can improve cell phone battery life by as much as 60%.
HPE Aruba President, Keerti Melkote, presented and shared with the audience that it had won the Wi-Fi project to the nearby Chase Center, where the NBA's Warriors play and that it should operating soon. Additionally, Melkote emphasized that Aruba had recently begun shipping its price-competitive Instant ON product and the take-up has been strong. Cisco SVP Engineering, Anand Oswal, primarily discussed Cisco's Open Roaming initiative that focuses on seamless and secure public Wi-Fi onboarding. It was interesting that Cisco did not focus its comments on Wi-Fi 6. Morgan Kurk, CTO Commscope and acting President of Ruckus Networks spoke about the benefits of Wi-Fi 6 to venues, primary and secondary educational institutions, including AR & VR, 1:1 and online assessment use cases. Derek Peterson, CTO Boingo, a Wi-Fi/cellular venue services provider shared that it is now serving 1B consumers per year. Its goal is to get 100 MHz to each user, and that it will reach this goal by using all available spectrum, licensed and unlicensed. Peterson also shared its observations of the benefits from using Wi-Fi 6 at its trial that began in April of 2019 at the John Wayne Airport in Irvine, CA. Morgan Teachworth, Head of Hardware Platforms of Cisco Meraki, shared observations of several events it has been involved with, including the US Open Pebble Beach 2019 event, where, to its surprise, upload traffic exceeded downlink traffic. David Henry, SVP Connected Home Products from Netgear, hinted that it plans to introduce its Wi-Fi 6 mesh product, saying wait for details next week. We also learned that Netgear would leverage the highest end Qualcomm Network Pro chips intended for enterprise-class devices.
VK Jones, VP of Technology, Qualcomm Atheros, spoke about future products and standards work. He said by 2020, we should expect 6 GHz, and, by 2022, 802.11ax Release 2 features including scheduling and spatial re-use to improve old device capabilities. 6 GHz requires a third-party service provider to coordinate what frequencies each access point uses.
Huawei hosted 700 analysts and media participants in Shenzhen China last week to attend its annual analyst summit, nick-named HAS2019. The company's high-level message was simple - the company is an innovator and is moving down the stack into semiconductors and is partnering with and funding university projects to develop basic research. This year’s message was different from than the prior-year meeting, but several transformative events have occurred between this meeting and the prior year's, most notably the 2Q18 shipment ban on ZTE, the US / China trade dispute and US efforts to thwart Huawei’s participation in the 5G infrastructure of its allies. Interestingly, during HAS2019, the Apple and Qualcomm announced their chip-supply and patent settlement, Samsung announced its foldable phone (which has been met with criticism), and Ericsson & Swisscom announced that the operator went live with its 5G network. All three of non-Huawei events highlighted the importance of Huawei’s chips and innovation announcements.
The company made announcements in its main keynote presentations on day one about seven different chip projects delivered recently or planned shortly. Chip-level is unusual for what are typically high-level presentations from a keynote-level presentation. These chips (seen in accompanying pictures) are:
The company shared more details about other chips in breakout sessions on the second and third days of the conference, as well. The point we are making, though, is that upper-level management provided significant detail about semiconductor developments at Huawei. Another relevant semiconductor-related point to make is that the company is de-emphasizing its reliance on Intel-based architecture and instead is focusing on devices such as ARM-based processors, as well as GPU, FPGA and NPU semiconductors.
We would be remiss if we did not mention some of the system-level announcements and observations related to 5G that were made at the HAS2019 conference, which include:
even more follow on
H3C and Qualcomm announced the planned availability of the WA6628 802.11ax Wireless LAN Access Point; it is slated for September 2018 shipments. This new Access Point uses the Qualcomm IPQ8078 part number - we checked the Qualcomm website and we cannot find this part on the website. So, we assume that this is a future product.
While the H3C press release is not the first 802.11ax Access Point get announced (Huawei, for instance, announced its own .11ax product in early 2017), this is important because this press announcement has a specific shipment date - September 2018.
Additionally, it is generally expected that another set of announcements are imminent from vendors using Broadcom chips. Looks like Qualcomm and H3C wanted to get ahead of those announcements.