dave in boston

Why Isn't AT&T Using Cash to Build Out LTE?

Both AT&T and Verizon have spent billions on spectrum specifically for LTE already (C.I.P.). LTE promises better performance, but we shouldn't forget that it also promises a reduced cost per served MB of data traffic: compared to both legacy technologies: EVDO and HSPA: (efficiency). Next, the anticipated data volumes from open application stores, open access mandates and the addiction to "all you can eat" data plans have got to scare the daylights out of anyone looking to maintain some sort of profit per data subscriber. With this in mind: Capital in Progress, Efficiency and anticipated usage per unit revenue: it's silly to assume that U.S. LTE deployments are somehow throttled by some intention to under-invest in the network. The "massive cash flow" you refer to may quickly become negative if the industry can't figure out how to serve more data with less cost very soon. Leaving spectrum capital on a shelf is not going to help either operator either. The fact is that AT&T and VZ are pushing LTE timelines harder than anyone else in the world. This push isn't about boasting outrageous bitrates, it is to reduce the slope of declining data margins. So from the AT&T and VZ perspective, it's not a stretch to assume that both would begin LTE rollout faster if the technology was ready today. You don't have to take my word for this, observe the mention of "efficiency" in the announcements below.

www.atis.org/lte/docum...
news.vzw.com/news/2007...

Customers care little about efficiency, but investors do......

Google Hits Back at AT&T over New Google Voice FCC Complaint

I think it is foolish for AT&T or any other telco to oppose an application like Google voice. Google voice doesn't prevent telcos from making money on the devices, access lines and associated minutes of use. If Google has found a way to make money switching calls FOR THEM, the telcos should step aside and be happy to make money selling access lines and minutes of use they don't have to switch. They're not making money switching calls anyway. If they try to make money the Google way the Telcos are over-extending themselves into e-advertising: and would pretty much have to begin from scratch as a Google competitor. The creativity is not there for the Telco side to succeed in this area. Telco should partner with Google etc...and focus upon selling devices, access lines, MB and Minutes of Use.

Can AT&T Handle the iPhone?

There were no iPhones when 3G networks (and associated standards) were designed. In "information super-highway" terms, roads designed for trucks and busses during commuter periods are being adapted to serve a sea of scooters that are busy all day. VZ and Sprint's 3G technology has an earlier end of life and is therefore less suitable for such adaptation: at a reasonable cost to their margins. With this in mind, it is unclear why Apple would bother to re-design iPhone for VZ and Sprint's outdated 3G networks when both are talking 4G already. Instead I suspect that real competition (and choice) in the iPhone network service provider space is with 4G. That's when operators will have a real chance to show how good their plans and networks really are: and consumers will have a real choice. Until then, we have no basis for comparison.

In the meantime, the "highway department" has a real responsibility to keep their roads safe for all who travel and pay tolls. That's why there are rules for the drivers and vehicles that use them. If you (the loyal customer) have gotten used to your commute experience, would you appreciate a bunch of farm equipment, goats and sheep on the road? I suspect these customers would not appreciate the travel interruption any more than the highway department would appreciate the cleanup. :-) Keep this in mind before criticizing Apple and AT&T for rejecting applications proactively. This strategy is much better than letting all in and figuring out what to do with them after the complaints that come later.

The Truth About AT&T's Network

vsnbs: I also found an informative report linked below. Perhaps John can check my numbers, but my findings say iPhone service and plans are likely the best mobile data value there is: for example:

* iPhone has 8% worldwide market share yet contributes 43-65% web traffic: in the US it's up in the 60% range
* RIM has 17% worldwide market share yet contributes only 3-9% web traffic

If most data rate plans are similar (which they are in the US), then iPhone subscribers are getting 10-14X as much data for their money. Perhaps the monopoly argument is based upon something else, but subscriber value certainly doesn't seem to be in indicator.

metrics.admob.com/wp-c...

The Truth About AT&T's Network

Bigger picture: The situation it is actually the exact opposite. AT&T is ahead of the curve and the effects of dramatic increase in mobile data from 3rd party applications are being seen in their network before the others. The others haven't exposed themselves to a device and application store anywhere near the scale of the exposure AT&T has from iPhone + app store: yet. Sprint and VZ 3G technology is behind AT&T + T-mobile and is losing ground fast. An iPhone + app store would push their networks over the cliff: and they'd need LTE or WIMAX to keep up.

The Truth About AT&T's Network

John perhaps your trade office experience could help provide some additional insight. According to my understanding, one of the indicators of "monopoly-like" practices is a trend towards reduced value to the consumer. After all, a monopoly can charge whatever they want right? OK, with this in mind, why not look at the monthly subscriber cost per minute of voice use and MB of data use: for iPhone versus other smart phones on the market: for example the Storm or Pre. This result will help you and your readers understand the dynamics a bit more before forming opinions.

The Truth About AT&T's Network

The truth is you forgot about T-mobile (3G in some areas) and have no basis for comparison with VZ and Sprint. T-mobile has 3G UMTS in some of these areas, but no iPhones. Look anywhere (research please) and you'll find that iPhone creates more internet traffic than any other cell phone data device: by a large margin. With 50,000+ applications, every day is an experiment. There is definitely room for improvement but I don't see reports of networks going off the air under load. These iPhone applications don't need blazing speeds so the table above is basically irrelevant. VZ and Sprint have no iPhones or associated network loading, and their network is incompatible with the iPhone UMTS / GSM hardware. Perhaps the Obama admin should force Apple to sell iPhone through T-mobile so you'll see what happens. Perhaps another bailout?????

The WiMax Deal Is a Disaster: How Google Got Snookered

WiFi uses free unlicensed spectrum and has no core infrastructure requirements. Anyone can buy a WiFi router, pick their channel and blast away without ever purchasing any wireless service from anyone. WiMax (at least in the US) is a very different case. Licenses and infrastructure are expensive and the uptake will be dependent upon some operator network build. If the client device suppliers want to throw caution to the wind and put a WIMAX chip in every widget they're definitely getting "snookered": because WIMAX is not nearly as simple as WIFI.

The WiMax Deal Is a Disaster: How Google Got Snookered

WIMAX may be a failure in the end, but Google is much more likely to "snooker" than be "snookered". Their actions during the 700Mhz auction were a clear demonstration of this. I suspect someone at Google saw the "Mythbusters" episode in which it was proven that the mouse really does scare the elephant. Logical or not, the "elephants" (major 3G service providers) are pushing their technology and access roadmaps to stay ahead of WIMAX "mouse". Google benefits from this, as it broadens their opportunities to reach mobile subscribers 24*7. Is it not plausible that Google is "herding the mice" to get the "elephants" to run their way? They got the FCC and VZ to buy in to the open access 700Mhz bit, why not prop up a potential competitor to keep the big boys on their toes?