On their earnings call this week, Verizon noted they are planning to deploy 14,000 mmWave small cells in 2021. The FCC estimates that to provide nationwide mmWave coverage it will take 2 million small cells. Not to get too technical, but Verizon has a long way to go.
There are around 200,000-300,000 cellular base stations in the US today. The average cell site has a range of about half a mile to a mile. There is a lot of variance in that number. Cell sites in urban areas have much shorter range as they are blocked by buildings and also have to support much higher usage. By contrast, cell sites along the Interstate highways or in rural areas can reach miles.
By contrast, mmWave base stations have a range that is measured in hundreds of feet. As with macro stations, small cells can reach longer ranges. Qualcomm, for instance, recently, conducted a test where the signal reached over a mile, but that was under ideal circumstances. In practice, mmWave signals will cover roughly the length of a city block. They will probably work in rain and heavy weather, but they cannot penetrate indoors.
If you dig into the math, it just gets more confusing. The area of the US is 3.8 million square miles, or 3.2 million not including Alaska. Take 250,000 cell sites and multiply by a 1 mile range, that works out to 785,398 square miles of cell coverage. That does not quite square with the maps the telcos and the FCC show that claim near nationwide coverage of the Continental US. So there are either a lot of rural cell sites set to maximum range, or someone is being very generous with their map making. If you then look at mmWave coverage, to reach that 785,398 figure would require 27 million sites.
What this all translates to is that if we take that FCC figure of 2 million small cells, they are really talking about urban coverage, probably not even serious suburban coverage.
This matters because consumers have little reason to care about 5G. The operators care a lot because it allows them to rationalize their IT systems and save a lot of money. The vendors care because it lets the handset and chip makers sell more gear, and the infrastructure makers tack on new software licenses. But consumers only get modest speed boots. This will change when they get mmWave signals. Those will be fast, 1 Gbps and up.
That being said, as it stands right now, consumers are not getting those speeds any time soon. Verizon is, by far, the leading proponent of mmWave. They have particular spectrum concerns driving this, but none of the other US carriers are in a big hurry to deploy mmWave, nor are very many international operators. And even Verizon is not really pushing that hard. Their capex budget for 2021 is forecast to be essentially flat with 2020, and as that 14,000 figure demonstrates, they are not really moving anywhere close to commercial service.
This also matters to a host of other companies. We have lost track about how much marketing material we have seen in the past two years showing all the industries just bursting with energy to deploy 5G applications. As we have noted frequently, most of those are hollow marketing, not real business. However, it does matter for a few, notably Augmented Reality, autonomous cars and drones. Companies piloting these would really like to see super low latency, high bandwidth mmWave. Unfortunately for them, they are not likely to get those signals any time soon.