<If 120 operators don't give GPRS the ultimate economies of scale in mobile data, I don't know what will. Balancing the economies of scale with the potential benefits of rival technologies is hard, of course - but looking at the order books is pretty simple. It seems to me that operators have made their decision by an overwhelming consensus.>
<And that gets us to the real point - the price of handsets>
The handsets are a commodity, and by definition, their prices will come down as they catch up to the network. Now that 3G throughput is becoming a reality, superior games and applications will be written. The supply will create the demand. The operators that have chosen inferior networks based on cost and politics will die a slow death.
Anyone in telecommunications knows, the quality of the network is ultimately the single most determining factor of success. Sure, you can prolong the death spiral with major marketing muscle or cutthroat pricing, but without adequate infrastructure, at best, your a dressed up corpse. In the competitive landscape, if you don't do it, somebody else will. T is facing this with the likes of GBLX, Level 3 and Quest. Their LD business is eroding so fast even they can't believe it. It's a nice 30 dollar stock right now. On all fronts, this is a broadband race; DSL, cable, 3G, the last mile, DWDM, etc. This business is not that difficult to figure out. It's very similar to real estate; Bandwidth, Bandwidth, Bandwidth(ask JDSU or SDLI).
The game vendors and application vendors will follow the market. They don't have great allegiance to anyone. If your network can't handle the traffic, it's simply "next!" (not even a "sorry"). They certainly won't wait around for you to get your little duckies in row. They will modify to the network/standard to get their product out the door. Trust me on that one.
Although I haven't been employed in the industry in Europe or outside the US, IMO, these 120 operators are painting themselves into a very small corner. Ironically, it maybe HDR that gets them out of it. In this competitive environment, I would not want to be out there selling against superior networks or under the employ of a company with an inferior network.
Noooo thanks!
Kent |
