Two Faces of Wireless--First is user experience and Second is Operator profitability
FACE 1--User experience
Data rate is a way of providing a satisfactory user experience. Streaming music vidio, Picture phones, GPS
location map functions require it.
a) MOBILE ENVIRONMENT OR FIXED ENVIRONMENT
1XEV RTT provides it to some extent with Rev 0 at 153Kbps data rates and moreso with Rev A at 307Kbps
data rates. 1XEV DO provides it atw 2.4 Mbps data rates and fiture 4.8 Mbps data rates. GPRS also provides
it to some extent with avg 30 to 50Mbps data rates.
b) FIXED ONLY ENVIRONMENT:
In a fixed location, 802.11b is very capable of providing good user experience at many Mbps
FACE 2 --Operator Profitability.
Broadlly speaking, it is data capacity that determines operator profitability. Operators must make a profit to
survive. Because they compete with each other, they must sell their data capacity used for similar services at
prices not two terribly different from each other. For different operators, covering a set area in a medium city,
$100 million or so may provide adequate cell sites to cover the city. However, for a CDMA 1X RTT/ 1XEV
DO operator, the capacity provided will be several times the capacity provided for a GSM/GPRS operator.
1) MOBILE EVNVIRONMENT OR FIXED ENVIRONMENT
The CDMA2000 (1XEV RTT) service provides a very large data capacity. The 1X EV DO provides an even
larger data capacity. UNFORTUNATELY, the GSM/GPRS service provides a very small data capacity.]
2) FIXED ENVIRONMENT
The 802.11b service provides a very huge data capacity
Given this situation, in a mobil environment, both the CDMA operators using 1XRTT and 1X EV DO and the
GPRS operators can provide a satisfactory user experience for limited vidio user applications. For streaming
music vidio, the GPRS just doesn't do well. A GPRS operator can spend more money and convert to
W-CDMA and provide a little better experience than 1X RTT. Unfortunately, the GPRS operator cannot even
come close to the revenue stream of the 1X RTT or 1XEV DO operator. AND THIS IS THE RUB!!
In a fixed environment, GPRS still fails to compete economically, but there is the possibility of the GPRS
operator installing seamless blanket 802.11b coverage in fixed locations such as office buildings,
airports,rerstaurants and public places. the 802.11b coverage. The GPRS operator can thus make a profit on
high data rate applications in those fixed locations. On the other hand, tthe CDMA 1XRTT or 1XEV DO
operator can also supplement his capacity in a fixed environment by offering seamless 802.11b.
Thus we see Voice Stream, realizing that its GPRS just doesn't have the capacity to allow it to compete
profitably, contracting with StarBucks to install 802.11b in their stores. If GPRS won't compete economically
in a mobile environment, at least supplementing it with 802.11b will allow them to compete profitably in a
fixed public location. Unfortunately for VoiceStream we now see 802.11b competition by Boingo springing
up. Small 802.11b operators can simply affiliate with Boingo and sell a nation wide 802.11b service to
consumers. Boingo could even conceivably offer the service through Sprint (as QCOM ASICS do incorporate
802.11b reception) or Verizon. Thus the "3G on the cheap" strategy of VoiceStream is a little fuzzy because it
appears to have zero competative advantage in fixed locations and a huge competative disadvantage in mobile
situations. Clearly Boingo, if it grows will become an acquisition target for the GSM crowd.
The more sane solution for GSM operators is ti simply switch to GSM 1X rather than follow the
GPRS/WCDMA path. This way, the GSM operators acquire the CDMA air interface with its huge data
capacity and can compete profitably with CDMA 1XRTT/ CDMA 1X EV DO operators. In Europe, where
socialism discourages competition, GSM operators will only need to compete successfully with each other. |
