This evening I'm sat in the rather chilly lobby of the Holiday Inn in Ellsworth, Maine. The surroundings (beyond the strip mall) are gorgeous, the weather today was perfect, and dinner was delicious. So why am I frustrated and feeling invective?
Because I just read this article on the Economist. (Sorry, it's behind the pay-wall. Caveat lector.)
On the surface it seems like a very reasonable retrospective on the 3G roll-out fiasco and subsequent gentle recovery. Tragically for the Economist's readers, it also zigzags around the real issues. This isn't the first or last time the mainstream press have failed to communicate the facts to the public, but I really hoped for better from the scribes of record in Econoville.
Here's a few stale and mouldy content crumbs to ruin your appetite.
Enthusiasm for data is growing, just not very fast: data services now account for 16.3% of Vodafone's worldwide revenues, for example, up from 15% a year ago.
Whoa! Our Vodafriends aren't breaking out the connectivity part from the service part of "data revenues". So are their users subscribing to data plans and sending emails to each other, cutting the carrier out of the services picture? Indeed, there may even be a "Fallacy of the best network" to accompany the "Paradox of the best network": improving "data revenues" are not necessarily an indicator of improved long-term health of a carrier. (Anyhow, if circuit-switched voice prices go into free-fall, data as a proportion rises automatically. So it's meaningless without context.)
Reaching further into the dark and dirty recesses under the counter we find...
Downloading ringtones is already popular, so downloading entire tracks—something that is only really practical using a 3G network—is the next logical step. Motorola, the world's second-largest handset-maker, has just done a deal with Apple, whose iTunes Music Store dominates the market for legal music downloads. And Nokia has just done a similar deal with LoudEye, another online music store. But it is still too early to tell whether this will turn into a mass market and, if it does, whether it will prove profitable for operators.
Hmmm. Last time I checked, Moto and Nokia weren't carriers. Wouldn't the Economist think it just slightly noteworthy that the carriers spend billions building the network, and the handset operators (i.e. the edge) get the value through increased handset functionality and prices?
(Did I ever mention I once had a student job in the kitchens of a posh private hospital? I once was told to scrape mildew off carrots using the industrial potato scrubber. It was good experience for working in telecom.) Anyway, inspecting the next unappetising morsel...
But there are signs that Hutchison 3G, a new operator that has launched 3G services in several European countries under the “3” brand, is already leading the European market down this path, notes Mr Thelander: in some cases, 3 offers voice calls for a fifth of the price of its rivals. Further pressure on pricing, argues João Baptista of Mercer Management Consulting, will come as fixed-line operators combat the flight of voice traffic to mobile with ultra-low-cost telephony services based on “voice over internet protocol” (VOIP) technology. With price cuts, he says, “someone starts, and then you can't stop it.”
Ooh! The real story about 3 comes in two parts. The first (and boring bit) is a failure to execute on the technology and network rollout, as well as a marketing misfire. The interesting bit is how they're created a packet walled garded that nobody uses because the carrier is the last one to really know what the customers really want out of the network. The desire for control killed the need for serendipitous success.
Curling our noses in dusgust we swallow the following:
It would be a great irony if, after years of hype about data services, the “killer application” for 3G turned out to be boring old voice calls [from increased network capacity and lower prices]. [...] “Unlike traditional voice service, the adoption of 3G services is very much customer-segment specific,” says Su-Yen Wong of Mercer. The lesson from Japan and South Korea, she says, is that “certain customer segments are interested in video, but others are not—some go for games, others for traffic updates.”
Now, turn the brain into the "on" position, and think... voice is really important, customers are demanding segment-specific functionality, so... we need to roll out new and better voice applications for each segment! Ta da! The purpose of 3G is to be the stupid network for voiceish packets. (Andrew Odlyzko proves E=mc2 with less arm-waving in a number of papers on his web site.)
A final lurch towards the barf-bag:
The calculations being made about the prospects for 3G are further complicated by the fact that the technology is still evolving, making new services possible. [...blah blah...] W-CDMA [...waffle...] CDMA2000-1xEV-DO [...etc. etc....] HSDPA [...uh oh...] TDD-CDMA [...don't laugh...] CDMA450 [...and so on...].
So no mention that pretty much all the above are about to be trashed by ODFM variants that deliver the low-latency MACs that those real-time location and presence-enhanced voice apps will need? Not a dicky bird.
What is it that makes "Paradox of the Best Network" unprintable in the press? Why can't the Economist write an article about the real story, the (futile) battle of the carriers to retain control over the content on their networks while still enabling the creation of a dynamic communications ecosystem?
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