Networks are at breaking point, says company providing alternative means for mobile devices to get online. Bear with me whilst I haphazardly tie this news item with another recent piece of fare, the iPad launch. Small speculations, loosely coupled.

I'll bet that from a customers perspective the crappest bit of an iPhone - the bit that bugs you the most, that causes you the most grief and fails the most often - is the network. We read all sorts of complaints about AT&T in the US, and O2 have taken a bit of a hammering over here. That's understandable, in a way - no operator has an unblemished track record in customer service, and as the experience of a smart device improves, the networks increasingly fall into its shadow. Operators also get scant loyalty compared to the device manufacturers, and this has been the case since looong before Apple came along.

I thought one of the most interesting bits in the iPad launch was around the connectivity: there's no contract. It's a data-only device which will move pretty seamlessly between Wi-fi and 3G, and which involves no subscription or commitment to an operator, just a monthly payment.

I think it's quite well-known that most data usage takes place in the home or at work - both areas which are likely to have well-provisioned wi-fi. Where does this leave the poor old operator? They end up as the guys (and girls) providing the patchy network that gets used when nothing else is available, that's paid for only when it's used, and that generates zero loyalty or commitment from customers. That doesn't sound like a good place to be, but you can bet that once some operators start offering tariffs that support this model, others will feel pressure (from both customers and OEMs) to follow suit.

This feels to me like the start of a shift to operators as pipes. I'm avoiding labelling them "dumb pipes"; let's not pretend that doing this sort of thing properly, at scale, is easy. Someone has to master the black arts of radio planning, lease sites, own spectrum, do billing, keep the lights on and the routers humming... and as demand for mobile data grows this will get harder, not easier. I bet there are folks looking at bandwidth projections for 20 years' time right now, and gently soiling themselves.

Maybe there won't be room for 5 of these new "utility" style businesses in a single country (as we have here in the UK) and we'll see more consolidation; and maybe some of them will invest in Wi-fi infrastructure - through, perhaps, companies like The Cloud - themselves.

Comments

[daveph]

Nice summary.

I remember arguing with a BT Senior Manager back in the heady days of the 3G license auction that bandwidth tended towards commodity, and recovering the enormous amounts spent of 3G licenses was going to be expensive. His vision was the compelling content delivered over 3G would trump landline xDSL interweb.

I wish now I'd had a Cory Doctorow WiFi novel to wave at him, but this was before Cory Doctorow had been invented.

[Tom Hume]

Heh, well you're one of the guys who does the black arts, so you're going to be busy whatever ;)

But I'm not sure that 3G licenses were a bad thing, per se... I mean, in the UK if you didn't buy a license you were saying "we'll not be a telco in 10 years, thanks". It was just a bit cruel of the govt to charge for them - and I wonder if they'd get the same fees again (it was dotcom boom-time after all).

And there's still a place for 3G - business apps, those for travellers - those are both pretty vast markets.

I could also see 3G tariffs being sold as "keep access to all that internet stuff you love using on your phone when you're out of home"... i.e. mobile devices still have a purpose and utility for consumers without it.