Abstraction

Great story in NYT today on the effect the iPhone is having on the ATT network. Directly related to my argument that wireless bandwidth is as a scarce, valuable resource will be the foundation of next generation business models.

Killer quotes:

[Because of network capacity being sucked up by iPhones] The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand. Another result is outraged customers.

Just wait till all operators offer iPhones. And a full netbook line. And more dongles. And enterprise services in the cloud.

AT&T says that the majority of the nearly $18 billion it will spend this year on its networks will be diverted into upgrades and expansions to meet the surging demands on the 3G network. The company intends to erect an additional 2,100 cell towers to fill out patchy coverage, upgrade existing cell sites by adding fiber optic connectivity to deliver data faster and add other technology to provide stronger cell signals.

Wonder what the ROI will be on that 18 billion…

http://www.nytimes.com/2009/09/03/technology/companies/03att.html

Study: IT shops have cash in hand for cloud computing: ”

More data showing showing growth of cloud computing. Most relevant to telecom is this growth in the context of Netbooks, and the resultant deluge of data volume.

From Unstrung: http://www.unstrung.com/document.asp?doc_id=176867&

T-Mobile and Orange are both saying that LTE has many technology hurdles to overcome before it is viable for their networks (Verizon and NTT’s aggressive plans notwithstanding).

The operators’ concerns with LTE include: support for voice services; the impact on backhaul capacity; intellectual property rights; the lack of standardization for self-organizing networks (SONs); and the lack of spectrum. And those are just the chief conerns.

In addition, T-Mobile and Orange, along with other European carriers, are scarred by the disastrous early days of WCDMA (3G), when they spent billions of euros on licenses and hyped 3G downlink speeds beyond reality, leaving customers and investors sorely disappointed. They don’t want to repeat those 3G mistakes in LTE, especially in the midst of a global financial crisis.

In my mind, this reinforces my contention that mobile bandwidth will quickly and inevitably become a finite resource in the face of unprecedented demand. Business models will change from a flat-rate all-you-can-eat (or all-you-can-eat-up-to-a-point) to more complex and nuanced charging that includes dynamic tiering, utility-style billing, and so on.