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To: smolejv@gmx.net who wrote (7187)	8/15/2001 3:13:21 PM
From: elmatador	Read Replies (1) \| Respond to of 74559

Mobile operators bought 3G/UMTS licenses to block any new entrant in the wireless space. It is an strategy that has proved successful on the fixed line industry: Don't do it and let nobody else do. ILECs -the fixed networks incumbent carriers- have consistently blocked new entrants by a iron grip on the copper plant extending to users. Back in the 80's, incumbent operators blocked ISDN. In the 90's, they blocked DSL technologies that could eat into their ISDN and T-1 leased line revenues. Mobile operators expect mobile data eating up into these revenue streams too. It is important to note that the biggest mobile operators, own the fixed infrastructure (DT, FT, BT, KPN, Telia et al) and -perhaps most important- are partly owned by governments. But the other additional incentive to buy licenses is to block newcomer becoming competitors for voice. But that cannot be done single handed. It needs to fit the interest of three parties: 1) Mobile operators 2) Governments and regulators 3) Mobile infrastructure Vendors To hold back mobile data network, on purpose, cannot be done without the help of the governments and regulators. To get this anti-competitive strategy operators fill the coffers of the governments with auction money, which -in return- allow them to play the anti-competitive game. This has become clear with two biggest mobile operators in the Czech Republic. The two biggest Czech mobile operators bid last week 6.7 billion Euro each for licenses just to keep it out of the hands of the competition. If new mobile competitors snatched the licenses they could have into the voice market. (WSJ 10.08.01 Czech Wireless Carriers Move to Block Rivals). Czech government can start covering the budgeted 20 billion Czech Korunas which it expected from the UMTS bidders. KPN owns 34% of Eurotel and holds UMTS licenses in the Nederlands, Belgium plus 15% of a license in the UK. Deutsche Telekom owns 61% of RadioMobil and owns UMTS licenses in Germany, UK, the Nederlands, Austria and Belgium. The same KPN and DT that are struggling with their mountain of debt. Debt that has incurred form purchasing spectrum for UMTS in western Europe! Were not these operators under pressure to cut debt? Have they not been downgraded just because of the debt mountain? More interesting is that in the same week those two Czech operators bought UMTS licenses in the Czech Republic, 'Sonera abandons 3G plans and returns licence' since it is not interest on building 3G in Norway. And Taiwanese CPC abandoned its investments plans in 3G. Surprised with the news of delays in 3G deployment? It comes not as a surprise anymore. The wireless mobile data networks will not be a 'one network fits all'. There will be a multitude of networks, terminals, applications and business models. With this balkanisation of the mobile industry, existing vendors of wireless networks and terminals and the existing mobile operators will lose the upper hand. Traditional mobile infrastructure vendors will lose power to new entrants and new technologies developed outside the traditional mobile industry. Operators faces the prospects of being relegated as simple bit carriers as Mobile Virtual Network Operators will own the customers. Blocking and delay tactics is not new for mobile vendors. Mobile vendors already have experience in this type of defence of their turf. In the mid-90's they have brought to market Wireless Local Loop technologies WLL. The WLL -a poor man's mobile PHS and DECT- were in direct competition with GSM. Vendors killed it and implemented pre-paid as the poor man's mobile using the existing GSM network. In the mean time on the road to 3G there will be a lot of delay tactics and jockeying for position. According to an Yankee Group study 'Pricing, comparison holding back 3G progress' -unashamedly slanted towards the fixed broadband access, a province of fixed wireline operators.- "Yankee Group analysts have recently blamed "astronomical...suicidal pricing" of 2.5G elements for holding back 3G development." Just in time explaining the reasoning behind the delay in 3G. If this is the case, why this study was not made BEFORE the auction gravy train of last year? The battle for controlling mobile data begun last year and will continue for a few years to come. It is very likely that the fixed line operators will dangle the carrot of fast rates at low prices over copper lines to dissuade investing in wireless data. After all ADSL has been used as diversionary technology for quite some time. In the mean time voice will be providing the revenues without risking a single dollar in an untested technology.