www.businessweek.com/technology/content/dec2009/tc20091223_992099.htm
It is true that back in the 1990s the whole notion of wireless data was considered something in the far off future. Come to think of it when I ran standards committees in the early 1990s we were thinking the mid-2000s was the future of wireless data. So I guess we were not that far off.
The reality is that analysts today and in years past have done huge amount of Monday morning quarterbacking on the very issue of the current wireless network’s inability to handle the projected deluge of data. The answer to why the network is in the current situation is simple. It was easy for engineers like myself to simply state that by the mid-2000s we were going to be handling multi-media calls/transactions. It was easy because the trends (at that time) gave every indication that wireless would be a primary form of communications for people. Ideas regarding wireless TV were already flying around in the mid-1990s. How come money was not spent building out the network appropriately? This answer is also simple. The market simply did not exist at the time. The handset technology and products did not exist at the time. We were barely using the capacity of the available spectrum at the time. The physical switching systems were not configured to handle video. More importantly the marketing professionals had no business case for spending billions more on a market that not did not exist and would not exist for about 18 years.
Now that I got that off my chest; let’s not blame the carriers or even the technology vendors. No investment banker today or even 18 years ago would ever spend that kind of money on a product or service that could not or would not generate revenue for over a decade.
The solutions being proposed today run the gamut of ideas. Proponents of various solutions are promoting DAS, pico-cells, femtocells, smarter handsets, more macro cell sites, more wireless backhaul, better wireless backhaul, etc.. The reality is that all of these solutions need to be implemented. Engineering is not the same as technology development. Engineering is the application of technology.
Investors need to focus on how technology is going to be applied and not focus on just the technology itself. Technology solutions abound for all kinds of issues but it is another matter altogether when you need to apply the correct technology. Guess what? It all costs money and lots of it.
The challenge for carriers is to deploy technology in a manner that addresses the problems in a way that does not break the bank. News flash for investors. In order for any of the carriers to continue servicing the customers and avoid the issues carriers like AT&T are facing, you need to spend capital on an annual basis. It is easy to take shots at carriers like AT&T for basically screwing up their smartphone deployment. However, the reality is that they could not spend the billions needed to upgrade their network at the time of the iPhone introduction because the investment banking community would never have allowed it. AT&T and other carriers, have just spent billions upgrading their networks to 3G without spending all of the cash they needed to spend to meet unanticipated traffic needs. By the way there is an old rumor that says: telecom engineers (from the 1970s through the 1990s) used to build a 35% buffer into all of their designs because they knew the marketing folks could not accurately predict market demands. The 35% was a safety net. Of course if any engineer ever admitted to doing something like this, you would find investment bankers making a list of engineers to fire. No investment banker would ever allow a carrier to spend that type of cash on “unanticipated needs”; it is just not profitable.
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