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Dave Burstein has edited DSL Prime and written about broadband and Internet TV for a decade. He authored DSL: A Tech Brief (Wiley, 2002, with Jennie Bourne). His work has been cited by nearly every major U.S. newspaper and business magazine. He chaired the Fast Net Futures conference for three years, and two Web Video Summits.
You can follow Dave on Twitter via @davescomm and @huaweireport.
Except where otherwise noted, all postings by Dave Burstein on CircleID are licensed under a Creative Commons License.
A rival tells me how hard it is to compete with Huawei because they manufacture so many products. “We had a good opportunity at one customer. Our software is just right for them. “They wanted to buy a complete system. We bundled our software with $4 million of equipment and bid aggressively at $7 million. Huawei came in with a bid of $4 million for hardware and software combined. They manufacture their own servers at a much lower cost than he could buy servers. more
Huawei's Cloud is growing faster than Amazon, Microsoft, or Google, Iain Morris writes. He cites U.S. Senator Tom Cotton on growth in "Egypt, Indonesia, Malaysia, Mexico, Saudi Arabia, Turkey, and the United Arab Emirates." Cotton further says: "In addition, Huawei's cloud services revenues reportedly rose by almost 170 percent in 2020. This accelerating revenue stream threatens to undermine U.S. efforts to curtail Huawei's power, influence, and financial strength." I think Cotton is a little high on Huawei Cloud growth... more
Most carriers don't order 200,000 5G base stations, so they will pay more, but that's the actual price for the joint procurement of China Telecom and China Unicom. The 200,000-300,000 cells the two jointly are upgrading are probably more than the entire rest of the world will add. The second Chinese network, jointly built by China Mobile and China Broadcast, is growing even faster. more
"2021 will be another challenging year for us, but it's also the year that our future development strategy will begin to take shape," said Eric Xu, Huawei's Rotating Chairman. Huawei generated CNY152.2 billion in revenue, a 16.5% decrease year-on-year. The Network Business continued to grow. It wasn't officially announced1, but consumer products other than phones probably increased sales. The fitness tracker, earbuds, and watches are winning strong reviews. more
China has agreed to buy $16 billion/year of Iranian oil in what amounts to a barter arrangement for Chinese goods. Telecommunications is specifically included, with a $billion or more for an upgraded mobile system. Huawei & ZTE will probably split the contract. Iran's population is 84 million, about the same as Germany or Turkey. That's as much as Ireland, Norway, Finland, Denmark, Switzerland, Austria, Sweden, Belgium, and the Netherlands combined. Nothing's announced, but it will be a big deal. more
The US war on Huawei brought down sales internationally, but China's 700,000 5G cells and explosive cloud growth meant Huawei had an up year. The chip blockade did hurt in Q4 and will continue to hold down sales in 2021. Huawei has sufficient reserves to outlast the United States until China catches up in chip production. Perhaps the most important figure in the financial report was the $55 billion cash. Another $10 billion will come in from the sale of Honor/Glory. more
Marilyn Cade was an exceptionally hardworking, always gracious leader in ICANN and IGF. She was a strong supporter of U.S. interests at ITU and a member of the U.S. delegation at the WCIT. Dozens have spoken of her at a memorial site, including Vint Cerf: "Marilyn was an elemental force in the ICANN, IGF and policy worlds. She was an advocate who could be counted upon to speak passionately for the causes to which she was dedicated..." more
Four Chinese ministries issued the policy document in September, called "Guiding Opinions on Expanding Investment in Strategic Emerging Industries and Cultivating Strengthened New Growth Points and Growth Poles." As you can see below, in this document, 5G was the top recommendation. The National Development and Reform Commission, Ministry of Science and Technology, Ministry of Industry and Information Technology, and the Ministry of Finance came together to suggest priorities for the 14th Five-Year Plan. more
Huawei is the strong favorite of Canadian network builders, for good products and extraordinary support. It displaced the incumbents at Bell Canada years ago and has a joint "Living Lab" in Vancouver with Telus. Huawei had already won the 5G contracts. It has a thousand researchers and spends a quarter billion dollars on Canadian R&D. It was a government decision. more
Only an idiot would believe that the U.S. is blocking TSMC manufacture of Huawei cell phone chips because of security fears. This is a commercial rivalry. The U.S. wants to put China's leading technology company out of business. We will fail, of course, at a price far higher than D.C. understands. The U.S. is ready for China's immediate countermeasures, even if Apple's stock price falls $hundreds of billions. But the long-run price will be devastating. more
5G is growing by millions per month in China, although the exact status is unclear. The telcos are reporting "contracts," which continue to be far higher than the separately reported 5G phone sales. more
The latest report from China's Ministry of Industry and Information Technology (MIIT) shows Huawei at the top of the list of 100 largest software companies in China. On reflection, that's not surprising. Half of Huawei's business is now phones, where chief rival Apple has long considered itself a software company. The great achievement of Huawei's phone division was to pull ahead of everyone in the quality of picture-taking. The hardware can be matched; Huawei's advantage comes from software. more
Ten million Chinese "reserved" 5G phones in the first two weeks of October, a powerful signal of high demand. Huawei thought they could all get phones in October. But the official figures are less than 1M 5G phones in October and ~5M in November. WTF? It could be an ordinary problem of ramping supply of a new product. It could be the official figures on phone sales are lagging reality by several weeks. more
Everyone knows the $100B/year U.S. security apparatus taps almost the entire Internet. Friendly governments help from Australia to Canada to France. Companies like AT&T, Ericsson, Verizon, and Nokia obviously cooperate. The NSA assumes that China is attempting to do the same and that Huawei, as a Chinese company, will provide assistance. The evidence suggests otherwise. Huawei is the primary opponent of U.S. security. more
U.S. companies were selling $11 billion a year of parts to Huawei before the blockade. Losing those sales is just the start of the damage. Every other Chinese and Russian company is making sure to find non-US suppliers. The U.S. has threatened India and Turkey with sanctions as well. As other companies replace U.S. components, the impact will be tens of billions more than the $11 billion of Huawei suppliers. more
Ren Zhengfei tells the Economist and the NY Times he is prepared to give the US essentially everything the President has asked, including the crown jewels: the complete design and source code of Huawei's 5G system. Ren would "license the entire Huawei 5G platform to any American company that wants to manufacture it and install it and operate it, completely independent of Huawei." more
The map below shows countries working with Huawei 5G in red and pink. As can be seen, Huawei is doing very well in 5G, although it's not as dominant as the colors here suggest. Ericsson is actually close to Huawei in 5G revenue, aided by the ban in the US and Australia. Years ago, Huawei was the price leader in order to break into the European market. more
The remarkable take rate in Korea and China is invalidating almost all projections of 5G subscriptions. The 5G promotion has consumers wanting to buy, buy, buy. Huawei Mate 20 5G is selling for only US$30 more than the 4G model. At that price, who would want to buy a 4G phone that could be obsolete in a year or two? In the first two weeks of sale, over a million Chinese bought Huawei's 5G phone. more
There now can be no doubt that fixed wireless, mostly 5G, will be a viable business in the right locations. Today's wireless has enormous capacity, enough to supply the broadband needs of a significant population. It's better than most DSL and a workable alternative to cable in many locations. Traffic demand is falling, with Cisco predicting the U.S. will fall to 31% growth in 2021. more
Outside of China, very few governments would expect a saving in spectrum costs would mostly go to investment. Corporations have other priorities, including advertising and executive salaries. Stockholders come above everything at most companies. Rarely would even 1/3rd of the saving go to capital spending. The U.S. under Trump had a massive tax cut, worth literally billions to Verizon and AT&T. Verizon actually cut investment. AT&T's increase in capex was far lower than the tax saving. more
Bitcoin's unreal hype has obscured that it is mostly used to facilitate drug deals, ransomware, tax evasion, and even the occasional murder for hire. After the 60% price drop, demand for bitcoin mining gear has fallen so much TSMC has to lower sales estimates for 2018... Now, Austrian Ambassador in Tehran Stefan Scholz has suggested it could be a powerful boost to the European intent to bypass the U.S. economic blockade. That could provide demand for $billions of bitcoins. more
In 2018, nothing can get approved in 3GPP that China strongly opposes. In the past, 3GPP often was a battle between a few American giants and their European peers. A Qualcomm or a Nokia will still be heard, but the power has shifted. I haven't seen evidence that the Chinese influence has made for better or worse standards. There are now over a billion 4G subscribers at the big 3 Chinese telcos, by far the largest equipment buyers. Nokia, Ericsson, and the other vendors do not dare oppose their largest customers. more
Around 500M Africans, Indonesians, and Indians are regular Internet users without a landline. Brazil, Indonesia, and Mexico add about 200M more. In total, something like 1B people were wireless-only at the end of Q3 2017. I'm comparing the number of Facebook users (over 250M in India) with the number of landlines (less than 20M in India) for a rough guess at how many are wireless only. In the developed world, 70-90% of all homes have a landline connection... more
About 65% of 1.5B Internet "connections" are in the Global South, led by the BRICS. The actual number of users is probably twice that. Three quarters are not native English speakers. China has three times as many as the United States. India has more Facebook users than the United States. Vietnam has the fastest growth. See some figures below for why I'm confident Indonesia has more than 100M wireless only. more
Something over 55% of landline broadband users are in the "Global South," about 500M. The South is about 65% if you include "wireless-only" many of which are 4G LTE at ten megabits or more. The gap is widening rapidly and will increase by well over 70M in 2018. Six large developing countries are growing 5% or more in the last year, compared to only one in the developed world. China is adding ~30M more each year. Most developed countries are between 75% and 95% connected. That leaves little room for growth. more
Primary suppliers see sales go up. ADTRAN's sales in the most recent nine months were $445M, up from $399M the year before. Calix sold $372M, up from $327M. At analyst meeting this year, both said demand had picked up. Clearfield, a supplier of fiber optic gear, was up 8%. Pai claimed, "the impact has been particularly serious for smaller Internet service providers." It was a primary justification for his Net Neutrality decision. more
Actually practical and not necessarily a problem. The Security Council of the Russian Federation, headed by Vladimir Putin, has ordered the "government to develop an independent internet infrastructure for BRICS nations, which would continue to work in the event of global internet malfunctions." RT believes "this system would be used by countries of the BRICS bloc - Brazil, Russia, India, China and South Africa." Expect dramatic claims about Russia's plan for an alternate root for the BRICs and not under Western control. more
We've all heard too much about NN, which I've been reporting for 20 years. I support it because I don't want Randall Stephenson of AT&T deciding what I should watch on TV. The long-run effect is negative. The claims from some people who agree with me are ridiculous. "According to former FCC commissioner Michael Copps, ending net neutrality will end the Internet as we know it." Michael knows I respect him, but... more
With Trump's "extreme vetting" extending to Pakistan and others, nearly all U.S. institutions with a global reach will be cut off from some members. Internet Society Board Member Walid Al-Saqaf, from Yemen, can't attend the IETF meeting next month in Chicago. Board Member Alice Munyua from Kenya may also have to skip the event. "There is a high threat from terrorism in Kenya," the British government reports. Kenyans likely will require extreme vetting. ICANN board member Kaveh Ranjbar, born in Iran, has also been appointed to the IETF Administrative Oversight Committee. more
Carlos Slim of Telmex tells me the world is about to change. "Two billion more people will connect to the Internet when smartphones cost $50. The phone makers are promising me a $50 phone in 2014." If Spreadtrum and Firefox deliver a $25 smartphone, as promised, that could accelerate takeover. ~310,000,000 Africans will be connected to the Internet in 2017, Arielle Sumits of Cisco predicts... It's inevitable that the U.S. will be dwarfed by the rest of the world. more
With a goal of 270M fixed broadband lines in 2015 and near-universal service by 2020, the new "Broadband China" strategy is extraordinary. OFweek, a valuable site in Chinese, breaks the plan into three phases. The first is a full speed stage, ending in 2013, that deploys basic broadband and 3G widely. The second stage, 2014-2015, is dedicated to a further takeup and wider deployment. That will include 400,000+ LTE cell sites. more
China continues to add broadband subscribers at a rate of about 30M per year. MIIT puts the January growth at 2.5M to a total of 152.5M. Of those, about 1.5M were DSL. They don't release fiber counts, but Jeff Heynen of Infonetics is reporting tens of millions of lines of fiber gear are in the pipeline. China has been consistently at 2-3M net adds per month. Two key policy moves are likely to maintain or even increase the growth rate. more
40%, not 92%-120%. "Data consumption right now is growing 40% a year," John Stankey of AT&T told investors and his CEO Randall Stephenson confirmed on the investor call. That's far less than the 92% predicted by Cisco's VNI model or the FCC's 120% to 2012 and 90% to 2013 figure in the "spectrum crunch" analysis. AT&T is easily a third of the U.S. mobile Internet and growing market share; there's no reason to think the result will be very different when we have data from others. more
Jeff Heynan at Infonetics reported a double-digit drop in DSL equipment sales, inspiring Dan O'Shea at Telephony to headline "Is DSL Finally Dying?" Both note that DSL sales in Q1 were actually ahead of the same quarter last year. Yet Dan writes "Fiber is the future." more
The best engineers on the planet are coming to the same conclusion: a hybrid 4G/WiFi/landline network is the way to meet mobile demand. Folks like John Donovan of AT&T and Masayoshi Son of Softbank in Japan had this vision around 2007-2008. As the iPhone/iPad/Android made the coming demand clear, networks planners around the world evolved similar strategies. more
Australian Minister Stephen Conroy announced the National Broadband Network would offer speeds of 1 gigabit without spending a penny more of capex. Sounds like the usual politician's promise. The NBN is a huge issue in the election in 8 days. The opposition wants to kill the $43B project as too expensive; the government warns that a vote against them will condemn Australians to a second rate Internet for a decade or more. Both are right. more
Craig Moffett sees this as I do: "If LTE networks are going to be usage-capped, then the last pretense that LTE can be positioned as a substitute for terrestrial broadband would seem to be gone." The heart of the U.S. broadband plan is to release more spectrum - enough for 10-20 networks like Verizon's LTE now building - and pray that will be enough competition in five to seven years to check price increases. more
Canada's CRTC isn't as dumb as U.S. regulators who are considering ruling that the law doesn't apply where the telcos oppose it. (Title II deregulation) Canada just decided wireless needs to follow the rules. In turn, the CRTC intends to make sure the rules are reasonable. Rather than saying "never any rules," they instead try to write sensible ones. more
In 2014, Cisco estimates Internet traffic growth in the U.S. will be less than 18%, far less than most previous estimates. Worldwide, they measure the current rate at 42% and expect that to fall to 30% in four years. Actual numbers at Cisco Visual Networking Index (VNI) is the definitive source on Internet traffic today because they have direct relationships with carriers from China Telecom to AT&T. Their future estimates are the most carefully done publicly available. more
Sure the iPhone has problems, but John Stankey of AT&T thinks restoring a $2B capex cut will fix them. It may take a little more money than that, but Glen Campbell of Merrill Lynch has confirmed he's on track. In a 50 page report that's one of the best I've read in years, Merrill destroyed the common belief that wireless has a significant spectrum shortage. more
"Outside applications need to be on an equal footing with our own applications," John Donovan said at a SUPERCOMM keynote here in Chicago. "My jaw dropped," one of his colleagues told me a few minutes later, because this is a reversal of AT&T's long-standing position they needed to be able to favor their own applications. AT&T D.C. needs to listen closely to their own CTO, because they are throwing everything they have in D.C. at preventing "non-discrimination" being included in the FCC Net Neutrality regulations. more
Ivan Seidenberg, Verizon CEO, saying "voice is dying" is a defining moment in telecom history. He didn't use those words, but his comments at Goldman Sachs are clear "we have to pivot and make a shift from the voice business to the data business and eventually to the video business. ... we must really position ourselves to be an extremely potent video-centric asset." more
Jules (Julius Genakowski) may soon have a stark choice: should U.S. wireless prices go up or down? Jules talks a good game about wanting more competition and the evidence is overwhelming that going from 6 to 4 majors resulted in higher prices. Merrill Lynch a while back calculated margins went up $billions each year because of the consolidation. You can hire an economist to say almost anything, and two at the University of Chicago happily stretched the truth on this in the past. But the evidence both academic and common sense is clear. more
Listen for half a minute to a demo of a high-bit-rate codec and you expect they will transform our industry. The difference is like a CD with great headphones versus a little transistor radio. Suddenly, you realize just how awful the sound is on your regular telephone. Who wouldn't want their call to sound dramatically better was my first reaction. When Thomson and some of the cable folks discussed plans, I was enthusiastic. Years later, nearly no one is taking advantage... more
Wuhan in 1911 led the revolt that overthrew the Qing Dynasty and now hopes to dethrone the world's fiber leaders. China this year or next will surpass Japan as world fiber leader, with estimates as high as 30M homes connected. Wuhan's FiberHome is now #2 in the world according to Infonetics, ahead of Alcatel, Motorola, and Tellabs. more
British Telecom (BT) is hurting because the wireline phone business is inevitably declining. Their new hire is one of the world's most interesting thinkers on possible new businesses for telcos. Martin has been part of the Telco 2.0 group at STL Consultancy, the best small group of European analysts... more
North American p2p went from 370 petabytes in 2006 to only 416 petabytes in 2007 according to Cisco's figures. Since U.S. users increased 16% in the same period, that's a drop in p2p per user and a significant drop in p2p as a percentage of all traffic. There's a major margin of error in these figures, so I'm calling it "flat." That's very different from pre 2007 experience, when p2p grew rapidly. It severely contradicts what many in Washington D.C. are saying... more
The London Times article (and a similar one in the Guardian) are based on dangerous misinformation. The net isn't slowing down, and nearly no technical experts believe major "overload" problems likely on the backhaul, core, or decent local loop... Net traffic per user, as documented by Odlyzko and Cisco, has been growing at about 35-40% the last five years, and that growth rate is flat and possibly down the last two years. The net has been able to handle the increase without price increases, much less overload, because the primary and rate limiting equipment (switches, routers, WDM, etc.) have simultaneously been going down at a similar 35-40%. Moore's Law is bringing costs down and capacity up at a remarkable rate. more
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