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NewsGlobe: Commentary
The Industry that Disrupted Itself
Mobile Futures in a Powerpoint World
by Stephen McClelland
The many-coloured powerpoints flash ever more rapidly by as
speaker after speaker reiterates the same message in the
opening session of Asia’s major mobile conference: after
years of uncertainty about whether it would ever take off, 3G
finally has. No need for discussion about killer applications.
Mobility itself was the killer application, says Carl-Henric
Svanberg, Ericsson CEO. In the north and west of the world,
mobile email is one among three top prospective applications
for the technology, in the east and south, it is music or TV,
says Siemens’ Mobile Networks President Christoph Caselitz.
3G – after all those doubts and sleepless nights throughout
the industry – is on a growth curve and the powerpoint figures
prove it is actually faster than GSM was at the same point.
Jean-Pierre Bienaime of the UMTS Forum points out that
European WCDMA figures are now almost on a par with those
of Japan. In total, the figures reached a collective 50 million
sometime last month globally and the industry can now
breathe a sigh of collective relief. It may be still a tiny
percentage of overall mobile population, but it is discernibly
there and people are using it, and seem to be using it
vigorously. CDG’s Perry LaForge refers to KDDI in Japan
enjoying 26% of its ARPU through data services. South
Korean operators may be seeing even more benefit. Carl-
Henric chimes in with figures that suggest at least one 3G
European operator has been seeing 100 000 music downloads
per month, and 1.8 million minutes of TV time from just 100
000 subscribers.
Even to sceptical and cynical journalists, this looks fantastic.
The talk is now universally of HSDPA and what it might do,
slightly supplanting even that talk of IMS and what it might
do (perhaps it is just the company I mix in). Siemens’
Caselitz sees the way forward with better technology as being
lower latency in communications, broadly translated as getting
mobile subscribers immediate access to the web pages they
have just clicked on. Good stuff surely.
The dark side of the force
But alongside all of this is another picture of the industry that
speaks of disruption. Today’s headlines in the financial
newspapers piled on the desks of delegates to this
conference shout another message, and perhaps a warning to
the industry. They speak of yesterday’s news from Telstra in
Australia: a multi-million dollar network upgrade announced
simultaneously with major job losses. More worryingly (for
observers if not for the workforce), the underlying message
strongly implies this huge strategic and extremely expensive
overhaul is a question of survival, almost certainly reduced
profitability in the near term and modest growth prospects
that leaves even the local financial analysts in Sydney
unimpressed.
Alcatel and Ericsson themselves can rightly congratulate
themselves on being winners in the network upgrade but
there’s too much disruption in the market to call anything a
success at the moment. Telstra is battling not so much with
technology but with a deregulated marketplace that threatens
to overwhelm it. Frequent fights with the Australian
government in Canberra about the pace and degree of
regulatory reform may signal a sea-change for the rest of the
industry. For once this is a political call, not a technological
one. Surely, Telstra will not be the only major operator to
worry about all of this.
Back in Hong Kong, we find out from Perry LaForge’s
powerpoint that he is concerned about “technology confusion”.
He is not the only one. So am I. Joining the party after all are
the TD-SCDMA Forum’s Secretary-General Jin Wang who
confidently asserts that TD-SCDMA is on “the eve of
commercialization”. And of course, we knew that WiMAX is
entering its final certification initiative and should be ready to
roll shortly.
Confused? You should be
LaForge’s brief concern about confusion seems real enough.
Of course, CDMA has to fight its place in all of this much like
any other technology, and the CDG has been doing this for
ten years against W-CDMA, but if we expected coherence or
convergence in a 3G era, it is almost certainly further away
than ever. We now have a plethora of options on the table.
Tying all this together must be the job of IP and thank
heavens for it, because it looks increasingly to be a divine gift
that will save the industry from its own cleverness. But in the
face of the prospective 3 billion mobile subscriber headcount
due in the next few years. the industry seems not to notice
the issues really involved in the complex technology cocktail
now being created, or perhaps it is merely pretending.
Brave industry pundits may meanwhile also be talking a lot
about fixed-mobile convergence (FMC) but I doubt we will see
this anytime soon in any way we thought it would happen.
There is just too much bubbling in the cauldron already. Then
there’s the perpetual topic of the moment: just what will
happen in China, a market that has gone from being some
sort of interesting market curiosity to the telecom world’s
giant killer in less than a decade.
And somewhere in all of it, lies the other rub: just what
happens on the fixed network side. If you ran powerpoints on
the fixed broadband industry, you’d probably speak of an
enormous optimism for triple play and IPTV but this is at the
very beginning of its life. For the moment, the major vendors
in Europe and the Americas are still fretting about what is
going to happen to them, and the uncertainty shows most of
all to the financial analysts who see the fixed side of the
telecom business as a bit of a drag on the bottom line, in
every sense. Somehow, the other solution often mentioned,
that fixed infrastructure somehow becomes a sort of
handmaiden for the mobile world doesn’t look that attractive
either.
There are enormous implications to all of the above if the
industry ever wakes up. Perhaps, it is simply better not to
know, or to analyze: there are just too many factors involved.
Perhaps this confusion is what extreme growth will always
mean. Perhaps everyone in this fantastic industry can be
winner. Perhap not. And perhaps when all the powerpoints
have been shown, we can at least accept in all this
remarkable cleverness and ingenuity, at least one thing. We
are looking at the first global industry to have disrupted itself.
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