Bob's Byte: No Problems in Public Please
By Bob Emmerson, Mon Nov 13 00:00:00 GMT 2000
Right now the industry seems to be whistling in the dark. Operators shrug off the high cost of 3G and lengthy payback times. Kit vendors ignore their failure to deliver high-speed data. WAP is a failure in the eyes of the market.
Isn't it time for some honest debate? It clearly is, which is why I trotted off to an open forum that would "discuss the fate of third generation wireless technology with a panel of leading lights from the mobile world."
It was a nice story for a while. Smooth migration from CSD (circuit-switched data) at 9.6 Kbps onwards and upwards to HSCSD (high-speed CSD) services running at over 40Kbps. Then came the biggie: packet switching at 115K, going up to almost 400K later on, and then a whopping 2M when standing still in an urban environment. I've sat through a dozen or more presentations that mapped out this future and went on to predict a wireless, multimedia nirvana. Question is, was the industry lying or did it believe its own hype?
HSCSD failed because it wasn't high speed and the market wanted packet-, not circuit-switched data. GPRS is up and running but forget 115K; the first services are in the 10 to 20K region and will probably max out at 50K. And you can also wave goodbye to 3G's top rate, even on a sunny day with the wind in the right direction. A knowledgeable contributor to TotalTelecom's 4G forum has pointed out that: "The problem with 3G is that when you actually read the specs (e.g. Tdoc SMG2 435/97), the data rates talked about are nowhere near the 2Mbps sometimes spoken of, but are nearer 144Kbps maximum. Even that may be more than can really be delivered."
Not good news and they come on top of the very valid concerns about the financial viability of 3G. Press releases are starting to circulate about services running towards the end of 2001, but the investment bank Dresdner Kleinwort Benson expects services to become widely available in 2004 or 2005. And the dates for breaking even are way out. Data from the UMTS Forum indicates a date of 2007 when there is a minimal license fee. Operators who have paid around $50 per subscriber for the licence won't break even until 2009 and nobody can see that far ahead.
So, there was clearly a lot to discuss and I was looking forward to a lively debate. What we got from the six 'leading lights from the mobile world' was a series of bland statements. For example: GSM was the leading standard. Whow! The number of subscribers continues to increase. Amazing! SMS traffic continues to rise! Incredible. GPRS is an 'always on' service that enables seamless roaming. Whatever next!
I don't recall anybody on the panel mentioning 3G, much less its fate, and none of the statements involved a real issue.
The audience was composed of analysts, editors and journalists and by the time the moderator asked for questions from the floor they were decidedly restless. There were lots of questions that I wanted to ask, but after waiting almost an hour and hearing nothing but platitudes I went for the jugular. Why, I asked, should we believe anything the industry tells us in future since they have not told the truth in the past?
The moderator looked left and right and asked who wanted to take that question and nobody did. There was an embarrassed silence, it was then passed to a company that markets network equipment and the spokesperson offered to discuss it with me "off line." Recall that this was meant to be an open forum and you can imagine the response from myself and other members of the audience.
I'd wanted to discuss the kind of applications that didn't need high speed. Mobile e-mail, for example, and the emerging market for unified messaging. That would have been the logical way for the panel to address one of the issues.
Were network operators going to employ wireless LAN technology in business environments like airport lounges? It's a logical move given the need to generate data revenues. That would indicate that operators have finally recognised the importance of the business market. Professional mobile warriors are the early adopters - the subscribers who are prepared to pay for decent data services.
How viable is the idea of shared infrastructures, i.e. the concept of managed cell-site co-location being proposed by Crown Castle International? This looks like a good way of reducing the cost of network build out. That would seem to be one way of getting round those huge infrastructure costs.
I didn't ask any of these issue-related questions because I had a train to catch. Moreover, there didn't seem to be much point since the panel were not prepared to talk about problems in public.
Bob's Byte is a regular column on TheFeature. Bob Emmerson observes and writes on the wireless industry from his home in The Netherlands.