Friday, 20 February 2009

As the dust settles, part 1: mobile broadband

As the sun sets, dust settles or curtains close (depending on your favourite metaphor) on another MWC, I've had time to collect my thoughts and nurse my blisters.

There were, of course, a number of interesting talking points on mobile broadband. Qualcomm's Gobi platform promises to position embedded laptops as the main form factor in future. The availability of spectrum was also heartily debated and some compelling and some spurious claims were made about the positive impact mobile broadband could have on dragging the world out of recession. For me, though, there were two major issues:

LTE: In my pre-show predictions I correctly identified LTE as a big crunch issue. Different operators are taking very different views on the likely roadmap. Sol Trujillo was his usual straight-talking self* in a press conference on Monday and made it clear that Telstra would be sweating its HSPA assets for several years before it made the jump to LTE. Sierra Wireless CEO Jason Cohenour described Telstra as "a lighthouse in terms of pushing the envelope" which, mixed metaphors aside, is true. Given that it has the most advanced mobile broadband network in the world, Telstra is a good bellweather for the industry.

Well...most of the industry. There are strong arguments for a faster rush for LTE from some of the 3GPP2 territories. Expect a relatively speedy deployment from Verizon, but a rather more measured approach from GSM-land. That said, however, there are no guarantees that the mobile broadband arms race won't manifest itself in a relatively rapid move to LTE. Vodafone, for instance, is relatively bullish, although in part that must be a result of finally being able to move to a common platform to Verizon Wireless.

The good news is that once MNOs decide to make that jump to LTE the ecosystem will be well established. Chipsets, handsets and infrastructure will all be ready well in advance of when I'm expecting most MNOs to launch. That should give, fingers crossed, a much smoother transition compared to what we saw from 2G to 3G.

That analogy is an interesting one. To what extent will the experiences of the 2G -> 3G evolution be reflected in 3G -> 4G? In the case of the former, the idea of sweating 2G assets with EDGE has proved mostly ineffective, despite the higher unit costs of UMTS and the lengthy time lag until we saw appealing handsets in the market. However, there is one major difference: no-one (I think I'm right in saying) has coverage obligations for LTE. MNOs knew that ultimately national 3G coverage was the end game and, while they may have chosen different ways to get to that, their strategies were always predicated on that outcome. With LTE the future is less clear.

The vendor community steps up to help MNO segmentation: The other big mobile-broadband issue that I noticed last week was the swift response from the vendor community to the evolving needs of the operators in enabling the segmentation, differentiation and efficiency savings that will be critical for providing the most compelling mobile broadband propositions.

With such a commoditised service MNOs will be hunting high and low for ways to differentiate their product, particularly if it allows for more segmentation. Chatting with 724 Solutions and Flash Networks, amongst others, the vendors are increasingly giving MNOs the tools to get to a much more granular segmentation. particularly by allowing differential charging and dynamically allocated bandwidth.

These may seem like relatively minor steps, but they allow a significant smartening of the pipe. Rather than one-size-fits-all pricing, it permits a much more targeted approach based on the needs of particular segments. And mobile broadband is all about the segments. There are many parallel and distinct mobile broadband markets (enterprise, students, second home owners etc) all of whom have very different requirements. Trying to hit them all with a limited range of plans will be inefficient either because they won't appeal to enough potential subscribers, or because the prices would have to be pitched so low that high-end users would become unprofitable. Segmentation and differential services is critical and MNOs don't need to look far to find vendors who can support them.

*although he shied away from answering my question

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