What did I tell ya!?

[Andy Sjostrom]

The carrier Orange wishes to break the promise made to the government to meet end-2003 deadline for Swedish 3G rollout, and instead extend the deadline two or three years. Remember the crazy 3G (next generation wide area wireless network) auctions and beauty contests a couple of years ago? Carriers either paid governments billions of dollars or promised governments to build appropriate infrastructure and offer 3G services within a given time period for the license to offer 3G services.<br /><br />In Sweden we had a beauty contest. The carriers that promised to deliver best and fastest won the licenses. The astonishing outcome was that Telia, the biggest carrier, did not win a license. The market reacted negatively and so did analysts. I did not. On January the 5th, 2001, <a href="http://www.handdator.com/show_old_article.asp?aoh_news_id=269">I wrote</a>:<br /><br />"The coverage and infrastructure that the license winners promise will never (ie NEVER) be profitable. The stock holders of Telia should therefore rejoice! Give Telia 12-18 months and we will see who says: What did I tell ya!?<br /><br />"So only two losers remain:<br /><br />• License winners that either will stand as liars or as poor<br />• Consumers that once again will be severely dissapointed from broken promises and carriers with no means to offer attractive offers."<br /><br />OK. Here we go: what did I tell ya!?<br /><br />I understand Orange, though. We won't have 3G devices or services, let alone real wireless Internet access en masse at the end of 2003. It would only be foolish to bind capital into infrastructure that can't or won't be used for years. But I wonder why, oh why, some carriers keep over hyping and under delivering...

[heliod]

Andy, you are still lucky, here in Israel they are still beginning to talk about 3G. The licenses have already been given to the 4 existing companies, but until now even GPRS is not active yet.

Thinking deeply about your last comment, I come to the following conclusion:

Unfortunately (at least for us, gadget geeks) the world is not all made of japaneses that run after every new technology or device for the sake of being with the last and most updated version there is.

What is the percentage of the people in Europe that would be running to sign up, probably at higher prices, to 3G? Not all the "Send-End" phone users, that don't know more of their phones than those two keys. And, although I don't know about Sweeden, at least here in Israel and in some countries in Europe I have noticed they are 80-90% of the market.

So, can 3G be profitable in our region? I am in great doubt, and would love to hear other opinions.

Helio

[Andy Sjostrom]

Profitability is the difference between cost and income.

Knowing the enormous amounts of money carriers have paid to get the licenses (either through auctions or through giving expensive promises) I doubt 3G will become profitable any time soon (meaning within the next five years).

All in all it is about Return On Investment. How many subscribers are nescessary and how much can we charge to cover the costs and then some? I believe very few carriers will succeed in finding the balance. Some will, but far from all. The 3G circus is bound to be the fall of many companies -- something I've said many times...

[fulltilt]

Just part of the bloated hangover that the developed world is in thanks to the extremes of the last few years.

Buckle up dorothy, looks like Kansas has gone bye-bye....
:wink:

Just another one-eyed view...

Fulltilt.

[Ainvar]

Companies are wanting the money but they dont want to deliver on the goods. Here in the states Voicestream has been taunting iStream there GPRS data services. I was an early jumper on the bandwagon, paid for the over priced under qualified GPRS enabled cell phone and watch my dreams turn into nightmares. Not only did I say no to it but I 86'ed it from the list of companies that I would say would be a good carrier for the company I work for. Ricochet was an awesome wireless highspeed network where it was available and for 59.99 USD for unlimited access I was sold. I used them for about 3 months before they went under, but they profit to cost was not a good balance I guess. Now for voice carriers I like Voicestream the best but for data carriers SprintPCS has everyone beat handdown for the footprint. They are also turning on the big switch to there 1xRTT data network the middle of this month nationwide, that is 50-70kpbs sustained rate for data throughput.

But to me I want the technology and the stability at the same time. I work for a fortune 50 company and we are by far not anything close to bleeding edge in our technology infrastruture, but we are not far from it. We have highspeed VPN access and we are getting into heavier wireless data solutions also that are nto RIM related. We are jumping so to say at the ability to do highspeed data with a wireless company but at the same time we want there promises in writing and also we want them backed up.

So I have to agree with you on the companies that blow sunshine where the sun dont shine and then disappear afterwards.


Just my 0.02 on this, I am that guy who hates not to have the latest and greatest. But at the same time I want Stability with my latest and greatest when I do have it.

[Grey]

As I see it, we live in a world where words have no meaning. How many customers will Orange actually lose because of this decision? One can say Orange made promises it should have known it would not keep. Who pays in the end? The consumer does. I think, it time to start making Companies live up to there promises. Orange did receive something of value, and they have failed to live up to there part of the deal. At the very least they should lose the right to this part of the airways.

We are sending messages to companies, on how they may chose to deal with us. We can either tell them it's ok to promise us any thing, and to deliver what ever they like. Or it's not. We will live with the consequence of this decision for years.

[heliod]

On the other hand, would Orange still be alive one year after delivering 3G and having a very small number of users signing up for the service, despite the high investment to make it fast? I guess they would loose more customers this way (all).

What they did doesn't seem very fair play, but is quite logical: they made all the promises and investment needed to get the frequency, and now they will divide the further investment in a way that will enable them to have it ready when they feel that the market is ready for that.

If they plan it right, they will not loose customers. If they plan it wrong and miss the train, then they are history.

[Grey]

On the other hand, would Orange still be alive one year after delivering 3G and having a very small number of users signing up for the service, despite the high investment to make it fast? I guess they would loose more customers this way (all).

What they did doesn't seem very fair play, but is quite logical: they made all the promises and investment needed to get the frequency, and now they will divide the further investment in a way that will enable them to have it ready when they feel that the market is ready for that.

If they plan it right, they will not loose customers. If they plan it wrong and miss the train, then they are history.

I guess we are in agreement on that What they did doesn't seem very fair play, but is quite logical: they made all the promises and investment needed to get the frequency They received a gain, they got the frequency, and they prevented anyone else from getting it. And they are failing to live up to there part of the contract. Providing the service. In my book that is FRAUD ! Too many companies think this is now the correct way to do business.

Grey

[heliod]

I agree with all your words. The only additional point I see is that anyone else that would get the frequency and live to have the damn thing working by the end of 2003 would most probably close its doors by the end of 2004, causing a much greater delay of the cause.

I don't agree with the act from Orange, don't take me wrong. But maybe for the users it is still the "less worst" choice.