Commentary 4Mobility - Solving Europe's 3G Problems
By Andrew M. Seybold
23 August 2002
It has taken the European press a very long time see the cracks in the European plan to add 3G networks and services to their existing GSM/GPRS stable of wireless communications solutions. Now it appears as though every analyst, technology reporter and the business press has decided that the European wireless operators are in a lot of trouble because of their heavy investment in 3G spectrum, technical problems with the infrastructure, lack of a final standard and devices that work on WCDMA let alone WCDMA and GSM/GPRS.
Many of us commented about this situation months and, in our case, years before the current round of doomsday articles. While we take no pleasure in having been right all along, we do believe that it has taken the European community an extraordinarily long time to "discover" that not only are things not as promised by the vendor community, they are a lot worse. Not being one to wish hard times on anyone, and still believing in 3G voice and data services, I thought that I would share my thoughts on how to make lemonade out of the lemon.
I know going into this commentary that my remarks and suggestions will be ignored and refuted by my European readers, including those who are employed by the networks involved and the infrastructure companies that promised them such a rosy and ARPU-rich future. But there is a way to get out of this mess and return to profitability in an economical and timely fashion. Ahh, that it were only as simple as I am about to make it sound. My solution is based on making use of technology that is available and working today that can be easily added to existing GSM/GPRS networks.
Alas, the problems that need to be solved will not be solved, at least in Europe, by a different technology. There is too much PRIDE in the way, too much "not invented here" attitude and too many egos tied up in Europe's current wireless technology roadmap. But from a technology point of view, what I am suggesting is not only possible but feasible and it can be accomplished long before the first WCDMA systems come online in major European metropolitan areas.
The Solution
The solution is this: Give the governments back their 2.1-GHz spectrum, tell them what they can do with it, and at the same time get them to relax their "GSM only" stance on the existing bands. Then add in a little magic: Take a block of the existing GSM/GPRS spectrum and overlay CDMA2000 1X. (See, I told you the Europeans wouldn't like this.) GSM1X, as it is called, works today. It can be used on the same spectrum, cell sites and back-end and provide the same coverage with better voice capacity and much faster data speeds. If SIMs were used in the devices, a SIM could be taken out of a GSM phone and installed in a CDMA2000 1X phone.
Heresy, I am talking heresy here! How could European wireless operators even consider such a thing? They won't, but they could if they really wanted to get back to taking care of their customers, providing value for their shareholders and returning to profitability. But three of the world's most influential infrastructure companies are European and they built their future on a promise to deliver the wireless future in a brightly colored box adorned with ribbons and bows. The box has been lost in shipment. They could deliver on the promise if they stood up to their governments as a group and showed them that times have changed. The Internet boom has become a bust and the wireless Internet could suffer the same fate.
If just one wireless operator had the fortitude to move forward with GSM1X the European community would have to follow. And oh, by the way, at least one of the European infrastructure companies could come out of this smelling like a rose. Ericsson, the company that bought Qualcomm's infrastructure business, could step in and sell most of the GSM1X equipment to the wireless operators--a win for Ericsson and a deadly defeat for its arch rival Nokia, which only recently gave in and is building a "token" CDMA2000 1X device.
By now I know at least a few of my readers are ready to string me up from the nearest cell tower, but it isn't going to do any European country or wireless operators any good to hang tough because of ego and political reasons. They need to turn on their computers, open up a spreadsheet and enter numbers. One column for WCDMA capital expenses, one for the cost of money for two or three more years and one for the cost of the devices.
The next part of the spreadsheet should be filled in with the costs of GSM1X: No new towers (as opposed to three times more towers for WCDMA at 2.1 GHz); no new back-end (except perhaps to beef up back-end capacity); and no engineering and development costs.
The spreadsheets they used to justify to their upper management, board of directors and shareholders showed that they would be paying billions for spectrum to be followed by billions more to build out UMTS systems with years of negative cash flow before breakeven. This new set of numbers based on GSM1X would show their shareholders that they might be around for a while after all and that there may, in fact, be a way for them to make money on wireless voice and data.
Possible, yes! Probable, no! The odds in Europe are too heavily stacked against any player deviating from the agreed upon path. There is no one operator, it appears, that is willing to think outside of the UMTS box, and that's a shame. Historically, pride has been the downfall of many companies, and others have failed because of the NIH (Not Invented Here) factor. It's easy to sit here in the good ole' U.S. of A. and throw stones, but in truth, no one in the industry wants to see a wireless company fail as any failure is bad for the entire industry. It's certainly time for those across the pond to take a new, hard look at the direction in which they are heading.
Andrew M. Seybold <andy@outlook4mobility.com>
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Bolds mine. |
