Rambler's Top100
 
 
Все новости World News

Network operators: How many can survive?

20 августа 2009

Voice and data service providers come in a variety of flavors. Starting at the top, there are the big network providers, the ones that make use of muni WiFi systems, and those in the unlicensed TV white space. How many of them do you think will survive in our free market?

Regardless of how many options we have, it seems someone always thinks we need more, believing that the more choices there are the better the pricing will be and the better off we will be. This is a nice idea, and you may believe this to be true, but we don't have to look very far to shoot holes in this idea. In the airline business, for example, more was supposed to be better. Are things better now that so many airlines have come and gone and so many of those left are losing money?

So more doesn't always mean better, and we aren't limited to wireless for our voice and data communications. There is also DSL, cable and fiber, mostly in urban areas where the population per square mile can support multiple choices. At issue is how many choices.

Those insisting on more choices and pressuring the government to require more wireless networks think we should be paying less for our access or that we are entitled as Americans to free Internet access. I'm not sure where "free" comes from, but I know some Internet folks seem to believe the Internet is free so all access to the Internet should be free. Upon reflection, everyone knows that the Internet highway is not free. There are toll collectors at every onramp and someone pays the toll, even if it is a coffee shop paying for a T-1 line so you can have "free" access while you drink your coffee.

In a typical city that supports fiber to the home, citizens can usually choose from three types of wired services: DSL, cable and fiber. If fiber is not available, they still have DSL and cable with which to access the Internet from their homes and businesses, not counting special data circuits such as T-1 or DS-3 that can be leased by the month. So we start with a minimum of two wired choices.

Next we have the four nationwide wireless networks for voice and data (five if you count Nextel as a separate network) and those pushing for more networks want a new nationwide network. This is interesting since four out of five of our nationwide networks did not start out nationwide, they merged and bought their way to nationwide status over time. So, now we will have six choices (or seven counting Nextel)...

Then comes WiFi (hotspots or muni) and MVNOs. Let's say there are three in the city, and that takes us to 10 or 11 service providers. If Leap, MetroPCS or one of the Tier 2 or 3 network operators operates in the city, there are 11 or 12 companies to choose from. Let's be conservative and stick with 11.

Now let's look at what will happen in the near future. At least one cable company has purchased spectrum in each major market. Add in Clearwire or Sprint Nextel with a WiMAX network, and the potential for unlicensed TV white space systems and--are you still with me?--we now have a total of 14 choices for broadband and a few less for voice.

How many of these service providers can survive? Perhaps new entrants will be able to keep their operations lean and mean and charge less, driving everyone else's prices down as well--some types of networks can be built for less. However, operating costs will remain fairly equal. Site leases, insurance, back-end costs and many other expenses are the same for everyone. Would the new lean and mean network be as close to 5-9s reliability (99.999%) as today's networks? Would we settle for more outages or poor audio quality to save some money? Some would--Vonage and other VoIP suppliers have customers--but most of us would not tolerate such degraded service.

Once there are 14 networks in a city, there will be lots of choices and some price wars. Then there will be failures, and some customers will wake up one morning to find they don't have service because their provider ran out of money and had to turn off its network. These customers will have to find another service provider, they'll lose the rest of their subscription money, and they will have to go through the hassle of signing up with a new network, hoping this one can stay in business with so much competition. But then again, some of us will put up with anything for a "deal."

At the end of the day, our market-driven economy requires enough customers to support all of the service providers if they are to be successful and we are to have plenty of choices. You do the math. Take the total number of people in your city and divide by 14 and see if you think that is enough subscribers to pay for a network. Better yet, take 25 percent of the total population (the number of people not already subscribing to another service) and divide that by six, the number of non-incumbent networks we might see in the next three years. Is that enough subscribers to pay for a new network?

Andrew Seybold, analyst, consultant, commentator, author and active participant in industry trade organizations.

Источник: FierceWireless

Поделиться:
Заметили неточность или опечатку в тексте? Выделите её мышкой и нажмите: Ctrl + Enter. Спасибо!

Оставить свой комментарий:

Для комментирования необходимо авторизоваться!

Комментарии по материалу

Данный материал еще не комментировался.