Tag Archives: Nokia

The Explosion of Machine-to-Machine Traffic

Fierce Networks recently reported that on the earnings call for the first quarter of this year, CEO Justin Hotard of Nokia said that machine-to-machine (M2M) Internet traffic will explode, and in a few years will become the largest source of data transmitted across the Internet. He said that about 20% of all network traffic today, about 80 exabytes, comes from machine-to-machine traffic, and that alone is big news. Nokia is betting its future growth will come from meeting this growing demand.

I went back and looked at older blogs, and in 2020, there were estimates that between 3% and 5% of Internet traffic came from machine-to-machine traffic. In 2020, it was estimated that video streaming accounted for 80% of the traffic on the Internet. I remember a lot of discussion around the industry at that time asking why we were spending so much money to expand broadband networks to support entertainment.

How did M2M traffic grow to be such a big part of the Internet today? There are a lot of different sources of M2M traffic, a few that should be familiar to most of us, but some that are not obvious:

  • Software Driven Usage. Compared to 2020, much of the software we use in homes and businesses has moved to the cloud. It’s not M2M traffic when you save a Word file in the cloud, but it is M2M traffic when the software you use communicates with the cloud behind the scenes.
  • Internet of Things. Consumer Affairs recently estimated that the average U.S. home now has 21 connected devices. That’s double the number of average devices from 2020. A large percentage of these devices transmit data to the cloud without the homeowner’s knowledge.
  • Industrial IoT. Businesses are a big source of M2M traffic. This includes video surveillance cameras and burglar alarms. It includes sensors of many kinds. Industrial IoT includes traffic involved with reading RFID tags, barcodes, and robotic scanners to track inventory and materials.
  • Automative. I think most people would be amazed at the large amounts of data transmitted from your vehicle if you have it connected to your home WiFi. This includes monitoring the sensors in the car as well as transmitting performance statistics every time you drive the car.
  • Healthcare Monitoring. There is a growing use of health monitors that track devices like pacemakers and glucose monitors. Patients are routinely being monitored after having medical procedures.

While the traffic from all of these sources is growing, the huge M2M growth predicted by Nokia will largely be driven by the use of AI. AI is currently driving a huge amount of new traffic. A lot of it is coming from AI datacenters that communicate with each other. There is also huge traffic growth coming on the edge from uses like AI-driven factories and other industrial uses that are using software to replace people.

Nokia sees its own growth coming from supplying the gear needed to provide faster transmission speeds on long-haul fiber and keeping up with the growth to power the growing number of long-haul fiber routes being built. Nokia also expects to see growth at the edge as the need to be able to process huge amounts of M2M traffic keeps increasing.

Interestingly, there is a big push among the companies that operate data centers to create a parallel long-haul network that segregates AI traffic from everything else. This is being done to improve latency by eliminating contention with other traffic and by eliminating intermediate traffic switching points. Data centers also want to use fiber routes with the fastest speeds and largest capacity.

Winning the 6G Race

In December, the White House issued a short Presidential Memorandum titled “Winning the 6G Race”. The document states that 6G technology will be “foundational to the national security, foreign policy, and economic prosperity of the United States. 6G will play a “pivotal role in the development and adoption of emerging technologies like artificial intelligence, robotics, and implantable technologies. 6G will also provide faster, more resilient, and more secure communication networks that can be utilized for national security and public safety purposes.”

The report begins with an interesting statement, “It is the policy of the United States to lead the world in 6G development.” This memorandum suggests that the path for the U.S. to achieve this goal is to play a significant role in the development of international standards and to identify a significant volume of spectrum that can be harmonized for 6G networks internationally.

The memorandum goes on to direct several federal agencies to make sure the U.S. gets involved in the development of standards. This is something that U.S. scientists and engineers routinely participate in. Congress already ordered the FCC to begin looking for 800 MHz of midrange spectrum to put to auction. This is the sweet spot for cellular traffic, and it seems likely that cellular companies will buy most of any such spectrum that hits an auction.

What I find most interesting about the memorandum is the use of the phrase ‘6G Race’. This brings back memories of the same rhetoric being used to tout the introduction of 5G. In looking back, I see that the term 5G race entered the vernacular in 2018. It was a phrase introduced by the big cellular carriers as part of a massive lobbying campaign to get the FCC to hold auctions for cellular spectrum. The 5G race was supposedly between the U.S. and China to become the leader in 5G technology.

The lobbying effort was intense, and you couldn’t go to any sizable industry event without being bombarded by discussions about the U.S. winning the 5G race. I wrote several blogs on the topic at the time, and there were articles in the industry press about the 5G race on a weekly basis. This reached such a fever pitch that by 2020, there was talk of the U.S. government buying either Nokia or Ericsson so that the U.S. would own a 5G company.

What’s funny is that there was no 5G race then, and there is no 6G race now. That’s not how technology advances. For both 5G and 6G, scientists and engineers from around the world first create the standards for a new technology. Once those standards are published, vendors begin seriously developing marketable technologies to sell.

Every vendor strives to make technology that meets the standards so that it can be used worldwide. Vendors like Huawei from China and Nokia from Finland want the cellular technology they develop to be able to communicate with cellphones manufactured around the world. While there are differences between vendors, the differences are fairly minor, and over time, any development touted by any one vendor will be picked up by the other vendors. The whole purpose of standards is to make sure that a new technology is compatible around the world.

What’s particularly funny is that the U.S. is a minor player in the development of cellular technologies. The vendors ultimately decide which features of a new technology get stressed and developed first. If there were a 5G or 6G race, it would be between China and Europe – but I’ve never seen competition between the vendors referred to as a race.

I think the term 6G race is just more rhetoric from the marketing folks at the big U.S. cellular carriers. While they already won half of the battle by getting Congress to require that the FCC find more cellular spectrum, the lobbying effort is to make sure that happens in a timely manner before Congress or the FCC has a change of heart.

So, in case you are late to the game, welcome to the 6G race. It’s a drama-free race, and there is no finish line. But if the cellular companies get what they are asking for, the phrase will disappear as quickly as it appeared.

Broadband Technology Improving

As has happened continuously since the introduction of DSL and 1 Mbps cable modems, the major broadband technologies continue to evolve and get faster.

Cable HFC technology is getting faster. Harmonic, one of the makers of core cable broadband technology, recently announced that the company had achieved a 14 Gbps speed with DOCSIS 4.0. The test was achieved during a CableLabs interoperability event. The speed was achieved in a mock-up that included achieving the faster speed using technology provided by multiple other vendors.

The test was achieved with an updated CMTS (which is the main hub router in a cable modem network). The speed beats the old record of 10 Gbps, also achieved by Harmonic. It’s unlikely that any cable companies will try to achieve that speed since it would mean sacrificing some upload speeds with current DOCSIS 4.0 technology. But a faster CMTS would allow a cable company to offer a true 10 Gbps download product. These kinds of breakthroughs are also important since they are the first step towards developing the next generation of electronics.

Faster home broadband service from fiber is also improving. Earlier this year, Nokia announced the availability of two different 25 Gbps customer modems, making it realistic for ISPs to offer the faster 25 Gbps service on a PON fiber network.

Nokia also recently announced the release of a 25G PON card for the network core that can simultaneously support all of the flavors of PON, including GPON, XGS-PON, and 25G PON. The company said the card would easily be able to handle the upcoming 50G PON. Having a core with this flexibility will allow ISPs to keep customers on older GPON technology without having to force an update when the newer technologies are introduced to the network.

Finally, Nokia announced the release of some new home WiFi 7 gateways for the home. The  Beacon 4 gateway can reach speeds of 3.6 Gbps, and the tri-band Beacon 9 gateway offers 9.4 Gbps speeds. These are added to a line of gateways that top out with the Beacon 24, which can achieve home WiFi speeds of 24 Gbps. The new generation of WiFi 7 routers offers the possibility of superfast speeds inside the home using 6 GHz spectrum, while at the same time still connecting to older devices using 2.5 and 5 GHz spectrum.

Another major announcement is the new generation of Tarana radios for fixed wireless. The specifications on the new radios are a leap forward in capacity and performance. The first-generation G1 radio platform could support up to 1,000 customers per tower, 250 per sector. Each sector could accept up to 2.5 gigabits of backhaul bandwidth. The new G2 platform can support up to 512 customers per sector (2048 for a tower). The radios can accept as much as 6 gigabits of backhaul bandwidth per sector.

We can’t leave out satellite technology. The first-generation Starlink satellite weighed around 570 pounds and had a total downlink budget of about 20 Gbps. Starlink is introducing its third generation of satellite that weighs almost 4,200 pounds and has a downlink budget of 1 Tbps and 160 Gbps in aggregate uplink capacity.

This is a sampling of technology improvements and is not meant to exclude improvements being introduced by other vendors. There are many other important improvements including faster lasers for long-haul fiber routes and point-to-point broadband connections using light.

Massive MIMO

Nokia recently announced that it is introducing radios that will increase both the capabilities and performance of FWA cellular broadband. The technology that probably will have the most impact on wireless performance is the use of MIMO (multiple-input, multiple-output) antenna arrays.

Nokia recently announced that it will be deploying Massive-MIMO antennas that will allow for 16 layers of data transmission, up from 4 layers deployed in today’s cellular antennas. The term massive just refers to the number of antennas used in the process. Nokia first demonstrated a massive MIMO transmitter in 2017 that used 128 antennas, with 64 for receive and 64 for transmit.

Massive MIMO can be used in two different ways. First, multiple transmitter antennas can be focused together to reach a single customer (who also needs to have multiple receivers) to increase throughput. This is how Verizon or T-Mobile will be able to increase broadband speeds to gigabit or even faster levels – by making multiple connections of 100 Mbps channels. Combining channels like this requires sophisticated electronics in both the towers on radios and in the receivers. A current FWA customer that might max out at 300 Mbps speeds would likely need a new receiver to achieve much faster speeds.

Bandwidth to customers is also boosted by what’s called precoding or beamforming. It’s easiest to think of beamforming as creating a beam aimed at a specific customer – but the technology is more complicated than that. Beamforming coordinates the signals from multiple MIMO transmitters to maximize the received signal gain and to minimize what is called the multipath fading effect. In simple terms, beamforming technology sets the power level and gain for each separate antenna to maximize the data throughput. Every frequency and channel operates a little differently, and beamforming favors the channels and frequencies with the best operating capabilities in a given environment and instance. Beamforming allows for the cellular signal to be concentrated in a portion of the receiving area – which is the ‘beam’. This is not the same kind of highly concentrated beam that is used in microwave radios that transmit a pencil-wide beam between two locations.

Perhaps the biggest benefit of Massive-MIMO and beamforming is allowing a tower to connect to more customers at the same time. The original specification called for a 5G tower to be able to connect with 100,000 simultaneous connections. This current upgrade doesn’t come anywhere close to reaching that goal, but by creating zones within a sector using beamforming, a carrier gets to use the spectrum multiple simultaneous times with different ‘beams”.

These coming improvements are going to mean better performance for FWA. T-Mobile, Verizon, and now AT&T are outperforming the rest of the industry with FWA. When technology improves speed and performance, FWA is likely to be even more disruptive than today. I’m still of the opinion that a landline signal is going to be more reliable than a wireless connection – but cable companies and fiber ISPs are going to have to lower prices to compete with FWA. Good news for consumers – bad news for stock prices.

50G PON

Nokia and GFiber (Google Fiber) recently announced that the two companies collaborated on a live field trial of 50G PON technology. GFiber is already deploying Nokia 25G PON and says the 50G PON can overlay on that platform. Nokia now has 10G and 25G PON available to ISPs, the 50G PON in field trial, and 100G PON available as a lab demo.

In the GFiber test, the company was able to simultaneously operate both the 10G and 25G PON, and also the 25G and the 50G PON together. Nokia says there is now more than a dozen ISPs using the 25G PON worldwide. The company also says there are now five ONT vendors supporting 25G PON and more than sixty vendors on board in some aspect of the product, including chipset and optical suppliers. The next step for 50G PON would be to introduce it to industry vendors.

Nokia has chosen a unique technology path for the 50G PON. The upstream link for the technology can only transmit data for short, intensive bursts at preset time slots. This makes the electronics for 50G more complicated. This is also a variation from the industry standard that is being developed by the Chinese. This kind of disparity can cause issues with the supply chain if vendors support different versions of the solution. Nokia says their solution was needed since the technology is pushing the limits of physics.

Probably the most important question is if ISPs will be interested in 50G PON. It’s not unusual today for ISPS using PON for residential service to still use active Ethernet when connecting to large business customers that want speeds greater than 10 Gbps. Most PON vendors have electronics that will selectively support PON or ActiveE over specific fibers. However, an ISP operating a network with a lot of large broadband users, like a network supporting cell sites, might prefer the benefits of PON over activeE, with the primary being that one fiber could be used to support multiple cellular towers or other large customers from a single fiber.

The primary question is if 50G PON brings any benefits to ISPs serving residential and small business customers. Skeptics will say that we don’t need technology at these faster speeds. But in only twenty years, we’ve gone from broadband delivered by dial-up to bandwidth delivered by 10-gigabit technology on XGS-PON. None of these skeptics can envision the demands for data that can be unleashed over the next decade or two. If there is any lesson we’ve learned from the computer age, it’s that we always find a way to use faster technology within a short time after it’s developed. But it’s still a giant technology leap from 2.5 GB on GPON to 50G PON.

Most of the vendors that make or will be making 25G and 50G PON argue that the faster PON networks are cheaper on a per-customer basis. But I have to wonder if that is really true if ISPS don’t use the full capacity of the technology. The vast majority of ISPs using GPON limit the number of customers on a given PON neighborhood to no more than 32 customers. The upgrade to XGS-PON allows an ISP to easily put 128 customers into a neighborhood PON. The 25G and 50G PON platforms would allow a lot more customers on a single PON.

One of the inherent advantages of PON is that a card failure or fiber cut in a neighborhood doesn’t take many customers out of service. Most ISPs I work with will not want to risk putting hundreds of customers on the same PON if that increase risk of large scale outages. Over the past decade, cable companies have greatly reduced the size of their nodes to the range of 100 customers, and fiber providers should be careful to not give away one of their primary advantages over cable.

Manufacturing Returning to the U.S.

The other day I watched an online announcement by Nokia of a partnership with Sanmina in Pleasant Prairie, Wisconsin to rehab and expand an existing factory. The factory will create over two hundred new jobs and will manufacture fiber electronics like OLTs and ONTs that are used for fiber-to-the-premise. Vice President Kamala Harris was on hand for the announcement since the impetus to build a factory in the country was partially driven by Buy America provisions in the upcoming BEAD grants.

Nokia is not the only fiber-related manufacturer to expand production in the U.S. Corning announced the construction of a new fiber optic cable plant near Hickory, North Carolina. CommScope is building a new factory in Catawba, North Carolina.  Prysmian announced the conversion of a factory in Jackson, Tennessee from building copper cables to fiber cables.

A recent press release from the U.S. Department of the Treasury documents the big burst of investments in new factories. This is being funded, at least in part by infrastructure spending that came from the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS Act.

The following chart comes from that Treasury press release and shows how 2023 spending for manufacturing facilities has doubled the average spending for 2005 – 2022. Most of the new spending is on computers, electrical, and electronic factories. The Treasury press release notes that 18 new chipmaking factories were started in the country in 2021 and 2022. But since the announcement of the CHIPs Act there are over 50 new chipmaking facilities underway.

This can only be good news for the broadband industry. First, it increases the chance to buy American electronics as part of fulfilling grants. But the real benefit is over the longer run. This means that a lot of U.S. electronics manufacturing will be able to rely on U.S. factories manned by U.S. employees.

I’m sure many of you join me in being dismayed for decades as U.S. manufacturing jobs were shifted overseas. We’ve seen a steady erosion of good-paying factory jobs and a decrease in households in the middle class.

Many of these new and repurposed factories don’t require as many new workers as older factories due to automation. But every new U.S. manufacturing job created is a win for the economy. This is a needed shot in the arm for the economy. We can’t run an economy where everybody is doing service jobs – although it looked at one time like that is where we were headed.

Slowdown of Cellular Expansion

The broadband industry has always been cyclical. The industry has repeatedly gone through periods of booms and busts that have typically been exaggerated by the manufacturers of telecom equipment. When something new comes along, vendors jump on the new idea and drive up expectations for future sales. The stock prices of the vendors rise on the announced future expectations. But inevitably, the wave of enthusiasm comes back to earth, and the market returns to normal and vendor stock prices drop.

We’re now seeing the beginnings of the end of the boom of the big cellular upgrades to 5G. One indicator that the boom is slowing is that Ericsson and Nokia both recently lowered expectations for future equipment sales, and the stock of both companies instantly dipped around 10%.

For the last four years, the cellular industry has been in a boom as the big cellular carriers upgraded around 70% of their cell sites nationwide while also building new small cell sites. These upgrades meant huge sales for Ericsson and Nokia. It meant a big boom for tower climbers and crews who work on upgrading new cell sites. It has also meant a boom in fiber construction when carriers like Verizon and AT&T constructed fiber to replace costly leased transport for cell sites.

The improvement to the nationwide cellular networks has been impressive. The median cellular download speed nationwide measured by Ookla in 2017 was 22.6 Mbps, and at the end of 2022 had climbed to 193.7 Mbps. Most people think that fast cellular speeds are primarily for the benefit of customers. While this is an important issue, faster speeds are even more important for the best functioning of cell sites. Faster speeds mean a given customer uses the spectrum resources for a shorter time, thus freeing the network for other customers. Faster speeds alone have stretched the capability of cell sites to be able to handle a lot more traffic.

A slow-down of 5G construction will have a lot of repercussions around the industry. It will most immediately negatively affect firms and crews who have been working on upgrading cell sites for the last several years.

But there is an upside for the industry as a whole since some of the technicians who have been working on cellular projects can transition to the giant workload currently coming from building fiber. This won’t help technicians who only climb towers, but many of the other technicians already have fiber experience in their background.

These boom and bust cycles raise some interesting questions for the industry. The ones most harmed by the busts are the smaller construction and support companies that gear up to meet a specific industry demand – and these are usually the first ones cut when that demand slows.

I have to wonder what will happen to all of the cell sites that haven’t been upgraded. A lot of the remaining cell sites are rural, and I still see a lot of rural cell sites where carriers have not upgraded to FWA broadband. I recently cited the CEO of T-Mobile who described how the company rates rural markets. His rating system hinted that upgrades might not be coming soon for markets that the company rates low where the population is scattered.

I’ve worked in a dozen counties recently where 30% or more of residents told us on surveys that cellular coverage doesn’t work at their homes. This blog has largely concentrated on the lack of good broadband, but it’s just as devastating for a community when cell phones don’t function well. I’m not sure that DC policymakers fully grasp the hardships that come from lack of cellular coverage. One of my blogs earlier this year talked about a family killed by a tornado since they couldn’t be reached by cellular or broadband to warn about the coming storm. That’s an extreme example of problems that come from lack of cellular coverage – but the bigger tragedy comes in folks that can’t communicate in ways that the rest of us take for granted.

A Year of Mergers

Bell_logo_1969Our industry has seen many mergers over the years between the biggest companies in the sector. But for the most part big mergers that change the face of the industry have been sporadic. We had AOL buying Time Warner in 2000, Alcatel buying Lucent in 2006 and CenturyLink buying Qwest in 2011.

But now it seems like I can’t read industry news without seeing discussions of a new merger. During the last year or so we saw AT&T gobble up DirecTV, saw Alcatel-Lucent grabbed by Nokia and saw Charter buy Time Warner Cable and Bright House Networks. And we are now watching the regulators sorting out mergers with Verizon trying to buy both XO Communications and Yahoo, with CenturyLink wanting to buy Level 3 Communications and AT&T wanting to acquire Time Warner.

From reading Wall Street speculation it seems like the current merger mania in our industry is not over. The rumors are strong that CBS and Viacom will soon announce a merger. There is rampant speculation that several companies might try to outbid CenturyLink for Level 3. There are rumors that Comcast, Charter and Altice are interested in buying T-Mobile or Sprint. There are continuing rumors that Verizon wants to buy Dish Networks to get permanent access to the huge swatch of spectrum they own. And there have been rumors for the last year that somebody ought to buy Netflix.

And these giant mergers aren’t just happening in telecom. We see Bayer buying Monsanto, Microsoft buying Linked-In, Marriott buying Starwood, Tyco buying Johnson Control, Protection 1 buying ADT, Sherwin-Williams buying Valspar and Fortis buying ITC Holdings.

It’s really hard in the telecom world to know if mergers are good or bad for the industry. Some mergers are clearly bad because they eliminate competition and create oligopolies at the top of the market. The rumored merger between CBS and Viacom is one such merger. Today there are only five major programmers in the country and this reduces that to four. A lot of the woes in the industry today are due to the greed of programmers and consolidation at the top of the industry can’t mean anything good.

But other mergers might be beneficial. Consider the impact of Comcast or Charter buying T-Mobile or Sprint. I just saw an article this week that showed that the wireless operations of AT&T and Verizon are still showing a gross margin of over 50%. It’s been clear to every consumer that cellular service is overpriced due to lack of meaningful competition. Perhaps one of the big cable companies could drive down cellular prices in an attempt to grab market share.

But on the flip side, letting these huge cable companies develop a quad play product is bad for anybody else that tries to compete with them for broadband. A new fiber overbuilder in a city would have an even bigger challenge if they try to displace a cable competitor that offers cellphone service bundled with their broadband. It’s been clear for a long time that lack of broadband competition is bad for consumers.

The underlying theme driving all of these mergers is that Wall Street has a never-ending appetite for increased earnings. That alone is often a good thing. Many times the companies being acquired are underperforming for some reason and mergers sometimes wake them up to do better. Many mergers promise improvement earnings due to the effects of consolidation and a reduction in the management and overhead drags.

But consider what mega-mergers in the telecom space more often mean. They mean that fewer and fewer companies control the vast majority of the market. And those giant companies are driven by Wall Street to increase earnings quarter after quarter forever – and at a pace and level that exceeds general inflation. You only have to do the math on that basic concept to realize that this means price increases for residential and business customers year after year to keep meeting higher earnings targets.

Years ago we had Ma Bell that controlled 95% of the phone business in the country. AT&T would have acted like any other commercial company except for the fact that their prices were heavily restricted by regulators. But stockholders of these big companies today do just the opposite and they pressure management to increase profits no matter the consequences. It is the chase for bigger earnings that has seen programming costs and cable TV rates climb much faster than inflation for the last decade to the point where the cable TV product costs more than many households are willing to pay.

I doubt we will see the end to these mergers, but if we don’t find a way to curb them the inevitable results will be a tiny number of companies controlling the whole sector, but with none of the restrictions in the past that were put on companies like Ma Bell. It scares me sometimes to think that broadband rates are going to increase in the same manner that cable rates increased in the past. But when you look at what the big ISPs have to sell it’s hard to not picture a scenario where earnings pressures are going to do the same thing to broadband that has been done to cable rates. That is going to do great harm the country to the benefit of the stockholders of a few big companies.

Technology and Telecom Jobs

PoleIn case you haven’t noticed, the big companies in the industry are cutting a lot of jobs – maybe the biggest job cuts ever in the industry. These cuts are due to a variety of reasons, but technology change is a big contributor.

There have been a number of announced staff cuts by the big telecom vendors. Cisco recently announced it would cut back as many as 5,500 jobs, or about 7% of its global workforce. Cisco’s job cuts are mostly due to the Open Compute Project where the big data center owners like Facebook, Amazon, Google, Microsoft and others have turned to a model of developing and directly manufacturing their own routers and switches and data center gear. Cloud data services are meanwhile wiping out the need for corporate data centers as companies are moving most of their computing processes to the much more efficient cloud. Even customers that are still buying Cisco boxes are cutting back since the technology now provides a huge increase of capacity over older technology and they need fewer routers and switches.

Ericsson has laid off around 3,000 employees due to falling business. The biggest culprit for them is SDNs (Software Defined Networks). Most of the layoffs are related to cell site electronics. The big cellular companies are actively converting their cell sites to centralized control with the brains in the core. This will enable these companies to make one change and have it instantly implemented in tens of thousands of cell sites. Today that process requires upgrading the brains at each cell site and also involves a horde of technicians to travel to and update each site.

Nokia plans to layoff at least 3,000 employees and maybe more. Part of these layoffs are due to final integration with the purchase of Alcatel-Lucent, but the layoffs also have to do with the technology changes that are affecting every vendor.

Cuts at operating carriers are likely to be a lot larger. A recent article published in the New York Times reported that internal projections from inside AT&T had the company planning to eliminate as many as 30% of their jobs over the next few years, which would be 80,000 people and the biggest telco layoff ever. The company has never officially mentioned a number but top AT&T officials have been warning all year that many of the job functions at the company are going to disappear and that only nimble employees willing to retrain have any hope of retaining a long-term job.

AT&T will be shedding jobs for several reasons. One is the big reduction is technicians needed to upgrade cell sites. But an even bigger reason is the company’s plans to decommission and walk away from huge amounts of its copper network. There is no way to know if the 80,000 number is valid, but even a reduction half that size would be gigantic.

And vendor and carrier cuts are only a small piece of the cuts that are going to be seen across the industry. Consider some of the following trends:

  • Corporate IT staffs are downsizing quickly from the move of computer functions to the cloud. There have been huge number of technicians with Cisco certifications, for example, that are finding themselves out of work as their companies eliminate the data centers at their companies.
  • On the flip side of that, huge data centers are being built to take over these same IT functions with only a tiny handful of technicians. I’ve seen reports where cities and counties gave big tax breaks to data centers because they expected them to bring jobs, but instead a lot of huge data centers are operating with fewer than ten employees.
  • In addition to employees there are fleets full of contractor technicians that do things like updating cell sites and these opportunities are going to dry up over the next few years. There will always be opportunities for technicians brave enough to climb cell towers, but that is not a giant work demand.

It looks like over the next few years that there are going to be a whole lot of unemployed technicians. Technology companies have always been cyclical and it’s never been unusual for engineers and technicians to have worked for a number of different vendors or carriers during a career, yet mostly in the past when there was a downsizing in one part of the industry the slack was picked up somewhere else. But we might be looking at a permanent downsizing this time. Once SDN networks are in place the jobs for those networks are not coming back. Once most IT functions are in the cloud those jobs aren’t coming back. And once the rural copper networks are replaced with 5G cellular those jobs aren’t coming back.

An Upgrade to G.fast

Speed_Street_SignNokia has announced the lab trial of the next generation of G.fast, the technology that can pump more bandwidth through telephone copper. They ae calling the technology XG.fast.

In a recent trial the equipment was able to send a 5 Gbps signal over copper for 100 meters and 8 Gbps for 30 meters. This is much faster than the G.fast top speed in trials of about 700 Mbps. In a real life situation using older copper the speeds will not be nearly this fast. G.fast in real life trials has gotten about half of the speeds seen in labs, and it would be impressive if that can also be achieved for XG.fast.

The technology works by utilizing higher-band frequencies on the copper. Traditional VDSL uses frequencies up to about 17 MHz. G.fast uses frequencies between 106 MHz and 212 MHz. XG.fast climbs the spectrum even further and adds on spectrum between 350 MHz and 500 MHz.

There are a lot of issues involved in using all of this frequency on a small-gauge copper. The main problem is crosstalk interference – when adjoining copper wires interfere with each other, and this degrades the signal and drastically cuts down on the distance the signal can be transmitted.

Nokia mitigates the crosstalk using vectoring, the same as is done with VDSL and other DSL technologies. Vectoring generates an –out of-phase signal that can cancel out some of the interference. But there is so much interference at thise frequencies that vectoring can only keep the signal coherent for the short distances seen the trial.

To date there has not been a lot of interest in G.fast. Adtran, the other competitor in the G.fast space claims to have now conducted ninety field trials of the technology worldwide. That’s an extraordinarily low number for a technology that can add speed to existing copper. But it looks like most phone companies are not interested in the technology, and they have some good reasons.

The short distances make G.fast and its new successor impractically expensive in the copper plant. In order to use the technology the telco would have to mount an XG.Fast transmitter at the pole outside each home, or in dense neighborhoods to perhaps serve a few homes. But if the telco wants to take advantage of the faster speeds that XG.Fast can get into the home they also would need to string fiber to feed the XG.Fast transmitters.

XG.Fast is largely a fiber-to-the-curb technology and the cost of the building fiber up and down streets is the big hurdle to using the technology. Any company willing to spend the money to build that much fiber probably isn’t willing to trust copper for the last 100 feet.

There is one application where XG.fast makes good economic sense. It can be extremely costly to rewire older apartment buildings with fiber. But every apartment building has existing telephone wiring and XG.fast can be used to move data from a telephone closet to the apartment units. This sounds to be far less costly than trying to snake fiber through older buildings. Since a lot of companies have avoided older apartment buildings this might offer a relatively inexpensive way to bring broadband.

You can’t fault Nokia for continuing to pursue the technology. There is a huge amount of copper still hanging on poles and the world keeps shouting for more broadband. But I get nervous about recommending any technology that isn’t widely accepted. I can picture a telco deploying this technology and then seeing support dropped for the product line.

But I can’t see this ever being much more than a niche technology. Telcos in the US seem to be looking for reasons to tear down copper and don’t seem willing to take one more shot at a copper technology. There might be a good business case for using the technology to extend broadband inside older buildings. But US telcos seem completely uninterested in using this in older copper networks.