Telcos overpromise, underdeliver on 3G

Remember how I said 2.5G may not deliver the high speeds it promised and we should all wait for 3G for a truly broadband mobile environment? Don't hold your breath.

Remember how I said 2.5G may not deliver the high speeds it promised and we should all wait for 3G for a truly broadband mobile environment?

Don’t hold your breath. It looks like the telcos could well have simply been stringing us along all this time.

“We expect most 3G technologies to provide somewhere between 28Kbit/s and 64Kbit/s,” says Ken Dulaney, an analyst with Gartner Group in the US.

Pardon me while I whoop it up a bit.

64K? Whatever happened to 2MB? Apparently you’ll only get near that if you’re a fixed user, if no one else is using your cellsite and you’re standing underneath the damned thing. It also depends on what application you’re using. At best we can expect users to experience a third to half the speed touted by the telcos. Another case of telecommunications firms failing to communicate effectively. I’m just waiting now for that bugle call “the media over-hyped it, it’s all their fault”, to which I shall blow a large raspberry. If you, the telecommunication providers, want to launch a product and claim it is capable of a certain function, it is your problem and your responsibility when it fails to meet those criteria.

Verizon Wireless is about to start rolling out its 3G network using Qualcomm’s CDMA technology. This is similar to what Telecom will be rolling out, except Verizon is jumping straight to the 3G version, skipping the intermediate 2.5G. It is spending $US5 billion on the project and will go live in 2003. Think about $US5 billion for 64Kbit/s. That’s even more than Telecom wants to upgrade the rural network in New Zealand to 14.4Kbit/s.

Best of all, telcos are reluctant to tell you how much the user will pay for these “services”. Licences and upgrades to networks cost a fortune and even when Nokia helps out, something it’s doing in some markets by carrying the cost of the gear itself, that’s still a lot of money. How are telcos going to reclaim that? I’ll give you three guesses.

Meanwhile, Singapore’s 3G spectrum auction is on hold. Only three companies are willing to bid and Singapore, famous for its proactive broadband strategy, is having a bit of a rethink. Each of the four 3G licences has a reserve of $US60 million, slashed by a third already, and the government may simply decide to hand them over without going through the auction process at all.

It seems strange to me that for years the PC market has been wild and crazy full of vapourware and cowboys while the telco market has been staid and plodding, full of suits with their 20-year plans. Somewhere in the last year or so they seem to have traded places somehow. The PC world is providing fewer surprises and seems to be accelerating smoothly, following a more evolutionary, rather than revolutionary, path. Chip speeds and hard-drive sizes are increasing at a mind boggling rate, but basically it’s just better, stronger, faster of the same things.

Over in telecommunication world, however, we get promises of video on the cellphones that turn out to be rubbish. We get “it’s perfectly safe and we know that because we’ve done very little research into the health side-effects of anything”. We get mergers and acquisitions and separations and contract clauses. Last week I chased down a story about the ownership wrangle over Southern Cross Cables and discovered that neither Telecom nor Cable and Wireless Optus actually own the company that owns the cable. Instead, they’ve both set up subsidiary companies to limit their exposure and liability and tax costs.

Telecom New Zealand Bermuda Ltd does the work of actually owning 50% of the company that actually owns the cable. It all seems a tad too disingenuous to me. I’ll stick to field programmable gate arrays, thank you.

Paul Brislen is a Computerworld journalist. Send email to Paul Brislen.

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