Time and tide…

Time and tide…As the aggressive mobile phone industry heads towards 2Mbits per second capacity, the fixed wire guys are still locked in a monopolistic mindset that goes back a hundred years. This hindrance could just let the mobile men take the lead. David Manners reports Could mobile phones overtake fixed wire phones in carrying capacity? Until recently, it would have been unthinkable. Now it’s not. The bane of our technological age has been the leaden pace of the fixed wire telecommunications service providers. And it’s not just BT or NTT it’s all over. “Where I come from you have to have the patience of Job to get ISDN,” complains Intel chairman Andy Grove who lives in that off-the beaten-track, li’l ole technology back-water, California. Yet the world’s digital cellular providers have inked in 2000 as the date for having third generation mobile technologies called UMTS (universal mobile telephone systems) running. And they’ll run at 384kbit/s – the same as fixed wire ISDN. And the fixed wire guys? Despite ISDN being around for 15 years it has been deployed grudgingly and expensively – an extra ?80 or so on your quarterly bill. Moreover, the mobile guys are talking about an accelerated move to 2Mbits/s, which takes capacity into the territory of ISDN’s successor technology – ADSL. For the fixed wire guys ADSL remains a dream. “We’ve completed year-long ADSL trials in Ipswich and Colchester. Consumer trials start in September and we’re currently looking for 30 content providers to join in those trials,” says a BT spokesman. This gives us a clue to why it’s all so slow. Talk to BT’s superb laboratories and you’re transported into a Tomorrow’s World of giga, even tera, bit-per-second data rates, free-space optical communications and the like. Talk to representatives of BT management and the no-need-to-rush British attitude to progress still applies – a year’s trial, followed by more trials. . . . . . etc . . . . .you get the picture, or not if you’re waiting for digital videotelephony. It’s not hard to understand why. A hundred years as a government-controlled monopoly utility dies hard. From Alexander Graham Bell to Baroness Margaret Thatcher’s ascension to power, the telephone service was a government-owned monopoly. You couldn’t even buy a phone – you rented it, and you paid whatever rent, and whatever calling costs, and whatever line rental BT decided you’d pay – or you did without. It was maybe the most outrageous conspiracy against the consumer in industrial history. The effect on BT management can be imagined. Without any need to have regard to real-world, competitive, commercial considerations, it could ignore them. For instance, BT adversely affected the UK’s public telephone switch manufacturing industry by insisting that System X be made to a specification that was unsaleable abroad; it even affected the UK semiconductor industry by its choice of semiconductor process in 1978. At that time, the UK chip companies had been offered Toshiba’s CMOS process – the world’s finest which Siemens was later to license for its own chip renaissance – for free. But BT insisted on the UK companies paying ?300,000 for Mitel’s ISO-CMOS process when Mitel was not a major semiconductor player, and for a process which proved difficult to work in practice. A century of ivory-towered mollycoddling is not the best background to prepare for a competitive world, and BT, remember, is probably the most competitive of the old European monopolies. France Telecom, Telefonica of Spain, Deutsche Telecom etc are far worse. On the other hand, the mobile guys are moulded from more entrepreneurial clay and, as the government wises up to the benefits of promoting competition by auctioning off licences to operate, they’ll have to get more competitive. Last week Barbara Roche, minister of state at the Department of Trade and Industry, announced that UMTS licences would be sold off in an auction in 1999. Roche was following the example of the Americans who raised, or thought they had raised, an amazing $16bn in auctions of mobile phone licences in 1995 and 1996. ‘Thought they had raised’ has to be said because a number of the buyers of American licences subsequently withdrew, realising they had overbid. Roche has more modest expectations – only expecting ?1.5bn for the UK licences – which seems about right in view of the 5:1 population difference between the UK and US, less generous financial arrangements for bidders, and more stringent qualification provisions. In the US auctions only very modest amounts of money had to be paid up-front, and almost anyone, regardless of antecedents, could bid. There are a couple of wild cards which could further put the heat on the fixed wire providers. The first of these, is the new digital satellite based networks like Iridium, which starts its service in September, Inmarsat, Odyssey, GlobalStar, and Teledesic. While it seems the first four will be going for low-bandwidth networks, Teledesic promises to provide a high-capacity ‘global wireless LAN’. The second wild card in the equation is the satellite systems which are to provide digital TV broadcasting. Regulators permitting, these satellites can also be used to provide telecommunications services. And it looks as if the regulators are going to be permissive because, last week, the EC agreed to allow Rupert Murdoch’s BSkyB and BT to set up a joint venture called British Interactive Broadcasting to provide interactive TV and telecommunications services using the Murdoch satellite constellation. As a general rule, technology develops quickest at the point where most money is applied. Since all these people spending money on expensive mobile network licences, and on even more expensive satellite constellations, will be anxious to see returns on their investments, it seems possible that the aggressive mobile guys could out-bandwidth the fixed wire guys – still locked into their monopoly mentalities .

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