Javier Sanz-Blasco, Post, Telco Strategies & Policy

Wireless pipes are coming…

(By Javier Sanz-Blasco)
So… Is it going to be finally a big fat pipe, over wired or wireless? Web 2.0 supporters and normal subscribers (my dad and my mum!) have been demanding them (fat pipes) for a long time. As a residential customer, I do not want to use the homepage of Stratheden Telecom. (Stratheden was the street where I used to live). What I really want to pay whoever £10 a month and be able to get to my Facebook / Myspace / Wikipedia / Ebay / Blogger / Gaming accounts in no time. I might want to pay £5 a month to my favourite news-site or to download real-time Spanish TV over the Internet, but that will be up to me.

Big fat pipes over wireless are the next revolution. A supplier told me the other day that he was tired of dial-up over wireless. He meant E-GPRS, of course. Wi-Fi on mobile handset is becoming ubiquitous (as it is a de-facto feature in mobile computers). HSDPA coverage is not that bad… and Verizon and Vodafone seem to be moving into LTE.

And even if charges for mobile voice and data traffic are still more expensive that the equivalent on a wire, the challengers are eroding those margins and tariffs are coming down.

In the UK, Hutching 3G has announced a deal with Skype. Users will be able to use Skype on their 3G handset for a flat fee of £10 a month. Now, that is not panacea, as many user are not using hundred of their free minutes that they receive for their monthly subscriptions… but it is a start!

In Netherlands, there used to be 5 mobile operators for a population of around 16 million. Due to the limited customer base of the country, one of the licensees, O2, was not performing well and sold the business to an independent private equity firm for just EUR25 million in 2003. The new brand, Telfort, started to open the network to MVNOs in order to acquire traffic and customer base. This strategy was very successful for Telfort, who sold the business to KPN for EUR 1 billion in 2005, and also contributed to great competition in the Dutch market where a couple of dozens of MVNOS have grown over the last few years. The mobile virtual network market in the Netherlands is among the most active in the world and, on the top of it, the spectrum which was originally set aside as an interference buffer between DECT and GSM networks (the ‘guard band’), will also be made license free for low power indoor GSM networks.

Competition is creating fat cheap wireless pipes. This is great news for the customers! And, beside, on the wired side, BT is even partnering with FON


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