...
It's possible these boys can't afford to do anything other than follow this rutted road... Rather sad... EDGE by end of 2001 - oh my!
Ben, I'm concerned about that very possibility. I posed a similar question from a more global perspective when I questioned whether the debt load from the spectrum auctions in Europe would delay roll out of 3G.
I can see Cingular, and AWE - both salivating over the profits generated by DOCOMO - finding GSM an attractive solution. Both are marginalized with TDMA, but GSM puts them back in the mainstream. Perhaps the thinking is that by staying with a technology, outmoded though it may be, that commands 80% of the world market they are guaranteed a solution that will satisfy users for several years. It will also give them the economies of scale that GSM does provide in terms of handsets.
Couldn't one conclude that given a cell phone's, or even a PDA's, limited use as a web surfing machine, that plenty of sexy applications will be available to GSM users for some years to come? In other words, absent the introduction of some killer app that absolutely demands greater data capacity than GSM can provide, won't consumers be pretty happy with a GSM data enabled phone? Certainly DOCOMO users are.
I agree that KDDI's launch of 1x will be pretty instructive. It may be that the extra data capacity is so superior that people will switch. But if not, if its just the same functions delivered at a faster rate - I wonder if it's enough to drive the carriers to upgrade.
Another concern I have is that the very expensive spectrum allocated in Europe, which I thought was reserved for 3G only, might be made available for traditional GSM build out. That would address the capacity constraints that urban areas are experiencing and allow the carriers to begin generating revenues from the new spectrum very quickly. If sexy, albeit limited, uses for data are made available on GSM (a la iMode) that may be enough to keep consumers happy for several years to come.
I admit this may be a worse case scenario, but if there is no consumer driven need to upgrade then I can see 3G delayed for some time. China becomes an even larger piece of the puzzle then. If Europe stays GSM for the foreseeable future (2 - 3 years?) and Cingular and AWE join the GSM crowd, then China becomes the only huge growth arena in the short term.
I'm not exactly trying to make a case for this scenario, but the announcement from Cingular troubles me. Hence, I'm trying to get a "big picture" view. If that view does not include 3G adoption relatively quickly, then perhaps the short term optimism for Q* share price rebound is misplaced. You seem very well attuned to the "harmonization" efforts so I wanted to run this possibility by you. From what you are seeing, could 3G deployment be significantly delayed, if for no other reason, because it costs too much in the short term?
Pierre |
