Blackberry and Apple continue to revolutionise the wireless industry. Last year, research by Deutsche Bank found that, at a time when Blackberry and Apple had only 3 per handset market share, 35% of the operating profits of the network operators were generated on those two phones.
That demonstrated how ineffective were the attempts of the network operators at selling their own proprietary data services.
Now Apple has shown up another unpalatable truth about the network operators. Just before New Year, AT&T stopped selling iPhones because their high data usage was putting too much strain on AT&T's network.
Everyone knows the American networks are shitty. Much worse than ours, though ours are catching up fast with the USA as operators try and cram more and more users into the bandwidth, and try to spend as little as posible expanding bandwidth.
AT&T said a small number of iPhone customers account for the bulk of bandwidth usage.
Worst hit areas for dropped calls and Internet interruptions were, said AT&T,
It is appalling that operators in two of the world's most famous cities, in the world's richest country, can't keep up with demand for bandwidth.
Almost unbelievably, AT&T's mobile operations president, Ralph de Vega, hinted that AT&T may increase charges for internet use to deter people from using it, so reducing the demand on AT&T's network.
Honestly! To stop selling phones, and to increase charges, in the hope of suppressing demand doesn't sound like good business sense.
Most people would judge it the economics of the madhouse to damp down demand instead of expanding capacity to meet demand.
The technology to increase bandwidth is here, ready, and waiting. HSPA and LTE are deployable but, true to form, the operators prefer to lag demand rather than meet it, let alone anticipate it.
That's the way the operator industry has always been and is, it seems, the way it always will be.
Subscribe to this blog's feed
Comments (5)
For those who haven't seen Verizon's spoof on Apples ads on this very point
http://www.appleinsider.com/articles/09/10/06/new_verizon_ad_mocks_apple_att_theres_a_map_for_that.html
Also the way AT&T have handled this does hark back to the 80s when they got round the issue of free local calls by making I think it was the New York Stock Exchange its own district so all calls from it were long distance.
However to be fair to AT&T there are a few points. Firstly it is rolling out HPSA as fast as it can country wide but due to various issues with spectrum and topography, New York is being left until last which is what is upsetting people. Also LTE is not fully deployable yet with equipment really still in the late trials/early deployment phase and it is far too risky commercially to install something that new in dense areas such as Manhattan when in theory a whole LTE network could still crash.
Posted by Mike Bryant | January 14, 2010 10:16 AM
Posted on January 14, 2010 10:16
The problem is that it's expensive to expand capacity and mobile data's too cheap per GB to pay for this.
Persuading people to buy the latest whizzy new smartphones (high-priced or on expensive contracts) is great for the operators until lots of people start using them in anger and the existing network clogs up, which is what's happened to AT&T in the big US cities.
Basically, in dense traffic areas existing networks -- even 3G -- only have enough capacity to support a small percentage of heavy data users. A good-coverage high-capacity 4G or WiMAX network is needed for this, but isn't rolled out yet, and nobody really wants to pay for it -- especially the users who think that data should be almost free...
Ian
Posted by Ian Dedic | January 14, 2010 11:15 AM
Posted on January 14, 2010 11:15
Thanks for the link, Mike, I just don't beleive that Veizon map in the ad. I find the US wirless netwrok spotty just for voice. As for the telcos they have been the biggest single drag on tech progress for the last 30 years - always dragging their feet on deploying new technologies while the computer and phone makers have raced ahead. I don't expect to see any mass-deployment of LTE - just a sporadic, limited, deployment to boost capacity in areas where the networks are already creaking through under-capacity.
Posted by David Manners
|
January 14, 2010 3:22 PM
Posted on January 14, 2010 15:22
The problem apparently isn't people who use a lot of bandwidth - the problem is people who use an absolutely incredible, mind-boggling amount of bandwidth. The cause is simple: "unlimited" data plans when the network clearly could never support even a single user streaming P2P content 24/7.
Part of that is being fixed through basestations that prioritize bandwidth to small/light users when necessary, which makes a lot of sense, but the core of the problem remains unchanged: unlimited data plans are a marketing gimmick that will eventually do nothing but harm.
The solution, in my view, is for the regulators to make unlimited data plans illegal and force very clear and transparent pricing information on bandwidth costs. The latter is to make sure that the market is competitive and companies cannot simply compete with each other by confusing customers in different ways, so this should keep prices in check.
Just look at 3UK for a good example of what mobile broadband pricing should look like, IMO. I hear their network could be better, but coming from Belgium I'd say it's hard to argue with that pricing no matter the average speeds. Forcing operators to compete on that basis should eventually allow for the 1€/GB that Ericsson claims is possible for *new* network installations after a bit of amortization (3G, not even 4G yet!)
Posted by Arun Demeure | January 15, 2010 12:09 PM
Posted on January 15, 2010 12:09
Transparent pricing, Arun, is something devoutly to be wished for. I hope the operators do what you suggest.
Posted by David Manners
|
January 15, 2010 2:45 PM
Posted on January 15, 2010 14:45