Where Does Cellular Data Fit?
By Mike Masnick, Thu Sep 16 21:45:00 GMT 2004

As wireless data services get more attention, it's time to start figuring out how cellular data services fit with the other options. To succeed, cellular data needs to play to its strengths.

Just as some are suggesting that fixed cellular could be a potential competitor to DSL and cable, others are explaining why that's a terrible idea. The case for fixed cellular points out that most cellular operators already have (or soon will) all the infrastructure they need to offer cellular data, making it cheap to expand into the DSL/cable space. The problem of cellular networks dropping the connection is somewhat mitigated by having a fixed solution where the connection is in one place, with no variation. Therefore, it seems like a no brainer.

The case against it, however, shows that this is only half of the equation. The cellular data networks were not set up to take on cable or DSL. Already, most of the offerings are focused on business users and tend to cost about double what wired broadband services cost, in part to discourage users from seeing it as a DSL or cable replacement. That's because the carriers' networks were not built to handle that level of traffic. Offering inexpensive flat-rate pricing for a fixed solution would severely tax these new networks, leading to serious service problems. It's yet another case of companies trying to shoe-horn one technology into a product it wasn't designed for and really can't handle.

Still, there is a reasonable fear that if the carriers don't offer some sort of competitive product, they won't fit at all. Charging too much for cellular data because they have to recoup their expenses while not overloading their networks only means they might price themselves out of the market completely. What's important, is for cellular data providers to focus in on the advantages they do have, and look for ways to make cellular data a complementary solution. In other words, just as Wi-Fi needs to be treated as a platform, so should 3G cellular data services. The carriers need to encourage real development of applications and services that take advantage of the aspects of 3G that other data services can't match.

Right now, those advantages are in ubiquity and mobility. On the ubiquity side, companies are already realizing that, at EDGE speeds or above, cellular data can help a workforce on the go. Also, as more smartphones are released, better integration between the voice and data sides of devices give cellular systems an advantage. The real trick is not to worry so much about indirect competition, but to focus on encouraging developers to build applications and services that take advantage of cellular data's differentiating factors. Just as the industry is realizing it needs to sell solutions, not specs, it also needs to encourage viewing 3G as a platform for development. That doesn't mean walled gardens, but encouraging developers to actually build the types of services and applications that take the distinguishing characteristics of 3G networks and make them useful.