Emerging economies face all sorts of opportunities to leapfrog entire stages of economic development. Mobile phone usage is leading to the demise of wired line service. Similarly, wireless broadband service offers the same potential for disruptive impact. Regulatory bodies must stay on top of these developments to ensure a variety of outcomes:
- investment in next-generation network infrastructure and services
- promoting competition in services
- ensuring the technology is propagated as widely as possible
For Fiji, we can pretty safely say that wireless networks will deliver broadband Internet in the future. This is because the country lacks the population density to justify the expenditure in fiber-optic cable, the new standard in wired internet service. As wireless technologies close the performance gap and become cheaper from wider use, they will become more viable.
With regular Internet usage estimated at less than 5% of the population, the challenge is to create wireless networks that cover as much of the population as possible, and have service plans that are within reach of the average person.
Here is a comparison of WiMAX and LTE, competing standards for 4G or next-generation networks:
So despite their differences in origin and current availability, the two siblings may grow closer with time, especially as newer iterations on the standard emerge. Wright said 85 percent of the work and technology for WiMax equipment will be reused in Motorola’s LTE equipment designs. The true battle isn’t between the competing 4G networks, but between wireless and wired broadband.
“The performance and capabilities of WiMax and LTE will only get better over time, and will represent a direct competitive threat to the existing broadband services,” Wright says. “People will make a choice, just like today when people are disconnecting their wired lines for voice.”
This should help put the competing standards into perspective. In Fiji, the WiMAX providers are Kidanet and Unwired. Since LTE is very closely affiliated with mobile phone operators and manufacturers, Digicel and Vodafone are in that camp.
Understanding what these standards mean for each other, as well as to wired and wireless broadband connections will be a key part of how regulators ensure sufficient competition to spur investment in the technology and guarantee service to as wide a segment of the population. The blurring of the lines between mobile and mobile Internet is also something regulators need to be aware of.
Deploying these networks is an expensive and as yet, untested proposition. WiMAX is available now and has been successfully tested and deployed in many locations. You can read about a pilot project in Spain, testing capabilities of the latest generation WiMAX Rev-e standard. LTE is undergoing early field testing by Fujitsu in Japan.
Both WiMAX and LTE are IP-based networks, which poses a real test for mobile phone operators as they figure out how to handle the switching technology to best deal with voice as well as data. That is part of the reason why LTE deployment is not expected to arrive until 2012.
In earlier posts, I discussed how sharing infrastructure in a public-private partnership arrangement might be the best way to guarantee that service is available to as wide an area as possible. Well, news out of the UK suggests that mobile phone operators are seeking partnerships to share network infrastructure with each other, in a bid to reduce operating costs:
British broadsheet The Guardian is reporting that UK cellcos Vodafone and O2 are planning to combine their network infrastructures. Talks between the two operators are reported to be at an ‘advanced stage’ and an announcement on the tie-up is expected within the next few weeks. Additionally, it is believed that Orange, which already has a network sharing agreement with Vodafone, may ask T-Mobile and Hutchison 3G UK for permission to join the two operator’s network sharing venture, Mobile Broadband Network Ltd (MBNL). All five operators, despite the rumoured link-ups, will continue using their own brand names. The sharing agreements could see a reduction in the approximately 51,000 base stations across the UK, in turn reducing operating costs for all of the cellcos.
Regulators are now faced with an even more difficult task of ensuring successful competition policy. Still, emerging economies are offered the potential to leapfrog yet another stage of development entirely. It might make sense for regulators to do a market analysis to see if such an agreement between operators and government would bring about successful outcomes of lowered costs to the consumer and wide availability of service. In my estimation, avoiding the costly duplication of service should be something that is explored furhter. Lowered initial investment expenditure and reduced operating costs would make companies more willing to deploy wireless technology quickly and more widely.