Will Townsend: Welcome to episode 194 of the GT on 5G. It’s the latest insight scoop on everything 5G. We cover six topics in about 20 minutes, and it’s brought to you by More Insights and Strategy. I’m Will Townsend, and joining me again this week is fellow analyst Anshel Sag. Before we get started, Anshel and I were hanging out together at Dell Technologies World, and then buddy, you kind of did double duty. You were at Build earlier in the week, right?

Anshel Sag: Yeah, Build and then overnighted myself to DellTech in Vegas. Thankfully, it’s all in the same time zone.

Ericsson Invests $50M in 5G Factory in Dallas

Will Townsend: For sure, and I know one of your topics is going to center on some of the stuff that you learned with Microsoft as well and some of the new co-pilot AI PCs and with 5G integration. But let me get started with my first topic. I want to talk about Ericsson and their investing another $50 million in its Open RAN-ready 5G Factory. This is in Dallas, in a suburb called Lewisville. Ericsson opened this facility just right before the pandemic at a cost of over $100 million. It covers over 300,000 square feet, and they recently invited analysts and media to tour the facility. Unfortunately, I could not make that. I was included on that invite list, but the Fierce team, the Light Reading team, and I think Mike Dano was there as well. They had a group of journalists, media folks, and analysts that toured it.

From my perspective, what’s interesting about this is that the company is manufacturing its products there and doing a lot around millimeter-wave antenna infrastructure construction. The ASIC designs are actually done in Austin, my hometown, and in Lewisville, they’re putting this all together. What I really like about what Ericsson is doing is that they’re using private cellular networking to facilitate all of this. There are some pretty amazing statistics that they were able to speak about. From an efficiency standpoint, the company points to reducing energy consumption by 25% and water usage by 75%. There’s a lot of sustainability advantages in deploying cellular. Obviously, cellular is much more deterministic than Wi-Fi given Wi-Fi handoffs and that sort of thing. It’s clearly a great demonstration of using private cellular networking within a manufacturing environment.

From an Open RAN-ready perspective, the majority of the products they’re building are Open RAN capable. This benefits Ericsson in a number of different ways. Number one, it’s domestic production. It domesticates the supply chain. There are certainly advantages with continuity of supply since the antennas that they’re building there are actually produced in the US. I’m kind of envious now of Mike and the Fierce team and others that got the tour. I’m hoping to get a tour scheduled here in the not-too-distant future. Did you catch the news? Any further comments or insights?

Anshel Sag: Yeah, I was also invited to this, but I also couldn’t attend. I didn’t know the dollar value, but it definitely would have been cool to attend just because of Ericsson’s role in the US market and in helping to bring Open RAN to a more prominent position in the US market. Other than that, it’s obvious to see AT&T involved, and Texas continues to be the center of a lot of America’s 5G domestic production capabilities.

Will Townsend: For sure. Let’s not forget about AST SpaceMobile. They’re based in Midland, and I’ll have some news to share in the coming weeks as I continue to have conversations with Abel and his team there. Let’s jump into your first topic. You want to talk about T-Mobile and their price increase, but there’s a little bit of context that you want to add to that.

T-Mobile Raises Prices on Older Plans: What You Need to Know

Anshel Sag: Yes. Some customers with older plans are getting price increases. Apparently, I’m getting a price increase, and I don’t even know how because I’m on a Magenta plan, but I guess it’s too old. There are newer plans now, but I think I got a notification I’m getting a $4 per line increase or something. It’s pretty significant. One thing that’s interesting is that a lot of customers are upset because they were told their prices wouldn’t increase, but it seems like they are now. T-Mobile is kind of following the lead of AT&T and Verizon, who both raised their prices this year. I think T-Mobile’s under pressure potentially from its own investors to raise prices. If you look at T-Mobile’s stock, it’s been pretty steadily growing. I have a feeling that if they’re raising prices, it’s because they believe they are the best carrier and want to be able to pay for the upgrades and also charge for being the best 5G carrier.

Most people are not thrilled about this, but it is a reality. A lot of people are upset because they thought T-Mobile wasn’t going to raise prices on them. I didn’t see or hear any good explanations, but price increases generally suck for everyone. This is probably a necessity for all the investments T-Mobile has made in the last few years. I think this is their first price increase in 10 years, so this is how they’re justifying it happening now. It’s a reality, and it will be interesting to see how that shakes out over time.

Will Townsend: I’m not surprised to see this because they’re following their competitors, and there’s no need to leave ARPU on the table from my perspective. T-Mobile is in an entirely different position now than it was before its 5G journey. They’re offering one of the most robust 5G networks. They’ve been the fastest to deploy, and we’ve talked about that on numerous podcasts. There’s no longer a need for them to be the value player. You can define value in a lot of different ways. They do a lot with entitlements like the Magenta plan that you’re on, where you get things like streaming services included. They’ve been a leader as far as offering higher throttle caps and that sort of thing. I’m not surprised to see that happen. No one likes price increases, but the fact that this is the first major increase in a decade speaks volumes to what they’re delivering to subscribers from a balanced value perspective. It’s not just about price. It’s about network reliability, dependability, resilience, and all the other intrinsic things T-Mobile has continued to do in the consumer space to be very disruptive. I’m not surprised to see it, but I think if people look at the holistic value T-Mobile delivers, as well as Verizon and AT&T, there is still value there.

Deutsche Telekom Deploys Massive Private 5G Network in Germany

Will Townsend: Let me talk about my second topic. Deutsche Telekom continues to focus on private networking solutions. I caught the news on RCR Wireless that they have deployed a massive private 5G campus network for a very large paper mill in Germany. It’s large from the standpoint that it’s the equivalent of 50 football fields. In Europe, football means soccer, so it’s quite massive. It covers 350,000 square meters. The company is Hamburger Containerboard. What I find really interesting about what the company has to say about its 5G network is that they believe it’s going to help optimize information flow, logistics, and production processes at the site. They produce nearly a million tons of paper product annually.

Much like what I was talking about with Ericsson’s 5G factory and the efficiencies they’re seeing from power and water usage, I assume that employing a cellular network will provide similar efficiencies. I had a college roommate who worked at a paper mill in Wisconsin, and the use of water in paper mills is huge because they have to produce the pulp that gets transformed into paper. I would assume that employing a cellular network will help optimize those processes. Did you catch this news? What do you think?

Anshel Sag: I did not see this news initially, but I did look into it afterward. I think it’s interesting and continues to prove that private 5G applications are relevant for manufacturing, especially as more facilities transition to modern manufacturing and Industry 4.0.

Will Townsend: Absolutely. When I’m asked by journalists about the biggest applications for private cellular, my answer is often manufacturing automation. By my estimate, it could be upwards of 50% of the total addressable market for that application. We continue to see examples of this with Deutsche Telekom and Ericsson.

5G-Enabled Drones Enhance Search and Rescue Operations in Scotland

Anshel Sag: Moving to my second topic, I want to talk about a 5G use case involving drone deployment in Scotland. This story originally came from the BBC, but Light Reading also posted about it. They are already using drones for search and recovery of people with thermal devices. Now, they want to use drones as 5G base stations to transmit video footage during search and rescue operations. The company’s called Jet Connectivity, and they have pop-up 5G base stations that can be put on a drone to create a self-deploying 5G network. This helps search and rescue teams communicate better when looking for someone. It’s a trial right now, not something they’re deploying immediately, but it’s cool to see more places using drones for networking. In the US, we’ve had them for some time, but those were primarily 4G applications. This is an improvement for search and rescue teams, improving time to finding and recovering people. Other companies like Telenor are also testing these kinds of things. The Scottish government partially funded this, and there’s a lot of collaboration between public and private partnerships. It’s really innovative.

Will Townsend: I think it’s a killer use case. I saw something similar a couple of years ago in Riga at an event called 5G Techritory. LMT (Latvia Mobile Telephone) demonstrated this capability, using drones as pop-up base stations for additional connectivity. Using a drone for search and rescue can be huge, especially in natural disasters like hurricanes. It can play a real role in improving outcomes for finding people in distress. We’ve seen drone applications for power line inspection and within ports. I love this use case, and there are companies like EdgeQ trying to shrink the base station down to silicon, which could enhance this business case even further. It’s a great showcase for what can be done with drone technology.

Nokia Strengthens Federal Solutions with Phoenix Group Acquisition

Will Townsend: Let’s hit my third and final topic. I want to talk about Nokia. They’ve acquired a company called Phoenix Group to strengthen their Federal Solutions business unit. We’ve talked about this on a prior podcast, how both Ericsson and Nokia are pivoting into defense and federal government solutions to expand their footprint and sales. Phoenix is already a well-established DOD supplier, providing very portable solutions that can be taken into war theaters. I think this is a smart acquisition on Nokia’s part. Nokia had a prior LTE solution, but this probably brings them some differentiated technology and strengthens their position. Dealing with the federal government is not trivial, and you have to be on things like the GSA schedule. This strengthens Nokia’s capability to focus on LTE and 5G connectivity solutions for battlefield applications. Did you catch this news? Any thoughts?

Anshel Sag: I don’t have any specific thoughts, but I agree that it’s easier to acquire your way into the federal government than to slowly work through all the red tape.

Microsoft Unveils Copilot Plus AI PCs at Build Conference

Will Townsend: Last but not least, you’re our device guru expert in the firm. You spent some time at Microsoft Build. These new Copilot Plus AI PCs have been unveiled. We did see some at Dell Technologies World. Dell usually dips its toe with new platforms, but this time they had multiple offerings. What did you learn at Build?

Anshel Sag: Build was Microsoft’s opportunity to unleash the Copilot Plus PC on the world. It’s a completely rearchitectured PC with AI capabilities. The Surface Pro will come with 5G later in the year. At launch, it will be Wi-Fi, but a 5G variant will be available in the fall. The entire ecosystem is behind them, with all devices being Snapdragon X Elite-based PCs. ARM is really taking over Windows now, and this will eventually transition to more 5G-connected PCs. Qualcomm is the lead ARM supplier right now, and they have exclusivity until the end of the year. We’ll see Snapdragon X Elite as the Copilot Plus ecosystem enabler. It will be interesting to see how this transitions into back-to-school and the holiday season. There will be competition from AMD and Intel, but right now, Qualcomm has the exclusive.

Will Townsend: What an opportunity for Qualcomm to grow into an adjacency and drive a ton of volume. AI is bringing so much attention to the data center, the cloud, and now the PC. AI workloads will become hybrid, with larger language models in the cloud and smaller ones at the edge. The battery life on this platform is incredible, with an average of 20 to 21 hours, better than Apple’s. Our friends at Six-Five Research benchmarked one of the Surface notebooks with this chip against an M3 MacBook, and it beat it on battery life. This is a huge improvement for the entire PC ecosystem. Microsoft needed to go with Qualcomm to shake things up. We will see chips from Intel, AMD, and potentially others next year. This isn’t a Chromebook, so there’s no sacrifice in performance. There’s integrated AI in the Snapdragon silicon, with an NPU that must hit 40 TOPS of AI performance.

Anshel Sag: Yes, the NPU requirement is critical for Copilot Plus PCs. Apple’s M4 does 38 TOPS, just under what a Copilot Plus PC can do. Intel’s Lunar Lake will do 45 TOPS, and AMD’s next platform will also hit 40. The PC ecosystem will grow fast, and Copilot Plus will be the future of the PC. I’m excited to get my hands on these systems, including those from Dell. Dell going all-in with Qualcomm after years of not shipping anything with Qualcomm is a big deal and a vote of confidence in Microsoft and Qualcomm. This is the future of the PC, and hopefully, we’ll see more 5G connectivity on PCs.

Will Townsend: Absolutely. AI is the water that the PC industry needed. It’s an inflection point we haven’t seen since the invention of the cloud. It’s been another great podcast. Why don’t you take us home?

Anshel Sag: We hope our viewers and listeners found this week’s topics interesting. If anyone out there would like to provide insights on a specific 5G topic for a future podcast, please reach out to us on social media. Will’s at @WillTownTech, and I’m at @AnshelSag. We hope you have a great weekend, and please tune in again next week. Don’t forget to rate us and subscribe.