Nokia, Samsung, Ericsson start salivating over 5G sales for C-band

Wireless network equipment vendors are quivering with anticipation over the C-band, a massive chunk of spectrum hitting the US market later this year that could generate billions of dollars in 5G equipment sales.

Omdia analyst Daryl Schoolar estimated that each US operator that decides to build a nationwide network with C-band spectrum would need to spend between $3 billion and $3.6 billion for the wireless equipment necessary to broadcast 5G signals in the band. Schoolar's calculation assumes three-sector cell sites using either 64T64R or 32T32R active MIMO antenna units, as well as a baseband module. He said cables, power, shelter, tower and construction expenses are not included in that estimate.

Given the money involved, some vendors are beginning to dance for operators' attention. Nokia, for example, announced last week it successfully tested 5G in C-band spectrum using its AirScale equipment atop its Dallas headquarters. The company said the test used 100MHz of spectrum at 3.75GHz with a 4x4 MIMO antenna configuration running in non-standalone (NSA) 5G off a Nokia network core. The test produced 1Gbit/s speeds at distances up to 120 meters, though company officials acknowledged that speeds would slow as the distance between the transmitter and receiver increases.

And Nokia isn't alone in its C-band interest.

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"The US C-band spectrum is very closely aligned to midband 5G spectrum that has been commercially launched in Korea and other countries," Alok Shah, VP of networks strategy, business development and marketing at Samsung Electronics America, told Light Reading. "Samsung has deployed over many tens of thousands of 3.5GHz 5G radios already, and we are bringing everything we've learned about midband 5G – including best-in-class products – to our US customers ahead of the December start of the [C-band] spectrum auction."

Indeed, Samsung's Mohammed Mohiuddin released a post on the company's website Monday boasting that "Samsung's C-Band solutions will provide operators with an easy to deploy and maintain solution that delivers incredible service levels."

"Ericsson has ongoing trial and testing activities in the C-band in the US," Ericsson's Paul Challoner, VP of network product solutions, told Light Reading. "Additionally, we have delivered equipment in the same frequency range around the world since 2019 in both NSA [non standalone] and SA [standalone] architectures. Ericsson is delivering field-proven Massive MIMO radios with world-class performance in MU-MIMO."

The vendors' jiggling is being noticed. FCC Chairman Ajit Pai tweeted about Nokia's announcement Monday, arguing that it points to the "importance" of the agency's upcoming C-band auction.

"From a mobile infrastructure perspective, this is an important opportunity for the RAN [radio access network] vendors," Stefan Pongratz, an analyst with Dell'Oro Group, told Light Reading. "And clearly the incumbent RAN suppliers are well positioned not only because the C-band will be used in conjunction with the existing FDD spectrum to minimize coverage gaps and maximize performance but also because their respective Massive MIMO solutions are in good standing."

Pongratz added that operators will likely deploy the spectrum nationwide – rather than in downtown areas as they do with millimeter wave spectrum – and that they'll likely rely on Massive MIMO equipment installed across their existing macro cell tower grid.

"We are excited and anticipate midband investments in the US will play an important role keeping the US mobile infrastructure investments elevated after the 30% to 40% increase in North American RAN capex between 2016 and 2019," he added.

Money for spectrum and gear
However, before vendors can begin selling their C-band kit, operators will need to first purchase C-band spectrum during an FCC auction scheduled to start December 8. Importantly, the two biggest incumbent C-band users – Intelsat and SES – recently signed on to the FCC's "accelerated clearing" program for the band. The program – criticized by some US lawmakers – is designed to dole out close to $10 billion to existing C-band users in order to get them off the band starting next year rather than the agency's 2025 deadline.

Operators, most notably Verizon, are widely expected to fork out big bucks to score C-band spectrum quickly. The auction is currently structured so that 100MHz of the band will be released by December 2021, with the remaining 180MHz to be released by December 2023.

The Wall Street analysts at Cowen recently speculated that the C-band auction could fetch up to $0.50 per MHz-PoP, which would equate to around $43 billion in total proceeds from all bidders. The MHz-POP calculation is applied to most spectrum transactions and reflects the number of people covered compared with the amount of spectrum available.

Figure 1: The Cowen analysts believe auction bidders will spend around $0.50 per MHz-PoP for C-band spectrum nationwide. Click here for a larger version of this image.
(Source: Cowen.)

"I think these guys [Verizon and AT&T] are going to muster everything they can from their balance sheets to go to war on C-band [auction]. They have no choice," T-Mobile network chief Neville Ray said at a recent investor event. He boasted that the midband 2.5GHz spectrum T-Mobile acquired from Sprint eases the operator's C-band spectrum needs, but he did not indicate whether T-Mobile would refrain from buying C-band spectrum during the auction as a result.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano