Monday, December 6, 2010

Sprint Nextel to Spend Up to $5 Billion to Upgrade Its Wireless Network

Sprint Nextel Corp. will spend as much as $5 billion to upgrade its 2G and 3G networks over the next three to five years, allowing Sprint to use a single set of base stations to support those networks, instead of multiple base stations.

Today, Sprint uses separate equipment to deploy services on 800MHz spectrum, 1.9GHz spectrum and, through its relationship with Clearwire, 2.5GHz spectrum. Under the terms of the new contracts, Alcatel-Lucent, Ericsson and Samsung will install new network equipment and software that brings together multiple spectrum bands, or airwaves, on a single, multimode base station.

As part of the plan, 800-MHz spectrum, very useful for in-building signal propagation, will be available for voice services, allowing better voice quality inside structures.

The plan does not appear to include the iDEN cell sites, which will be phased out, while iDEN users are migrated to the CDMA network. This phase out is expected to begin in 2013, Sprint says.

Sprint expects to save at least $10 billion to $11 billion over seven years because of decreases in energy costs, roaming expenses and the number of cell sites, among other items.

Sprint said it has negotiated contracts with Alcatel-Lucent SA, Ericsson AB and Samsung Electronics Co. for the project.

Video Apps May Define 4G Behavior

Of 10 potential applications 4G networks will affect the most, about six are directly related to video while at least three others are related to latency.

No surprise there. Some worry that will put strain on end user budgets. It certainly will encourage purchase of bigger usage buckets in some cases.

But anybody who has been relying on mobile broadband for mission-critical apps for any length of time already has likely figured out how to match usage profiles, devices, use cases and cost to avoid massive overage charges.

You don't watch lots of video using your 3G card, you use your fixed connection. In fact, it might make more sense to watch video almost always on your smartphone data plan and fixed connection, rather than on a PC dongle.

Users are rational. They will be rational about how they use 4G dongles as well.

Will Video Kill the Internet?

All observers would agree that online video dramatically changes bandwidth consumption, by a factor of 10 to 100 times. That leads some observers to worry that increasing video consumption will crash the networks.

It is a fact that Netflix's 16 million subscribers now watch enough online video that Netflix traffic alone accounts for 20 percent of all Internet traffic during the typical American evening, according to Sandvine.

But assuming markets are simply allowed to work, higher spending by end users to watch video online, whenever they want, as much as they want, will be tempered by their own rational decisions about how to consume video so as to optimize their own spending.

If a user today wants to watch programs delivered by multichannel video services on a TV screen, whenever they want, they can pay for digital video recroder services that allow them to do so, at one price point.

If they want to do roughly the same thing online, with less choice, viewing on their PCs or paying for services or equipment to sent that video to TV screens, they will pay different or additional amounts of money.

The point is that consumers will make rational choices about "what I want, when I want" viewing. If the price of viewing online climbs, as a rational observer would assume it must, over time. then the attractiveness of a linear format with DVD storage becomes quite obvious.

People will decide the value of a multichannel video service with DVD capabilities offers quite a value, compared to an online alternative. that offers only some of the content.

That's the part of the online versus offline versus linear delivery discussion that does not typically get factored in. Consumers will make different and rational choices when the cost of viewing on demand using various channels becomes explicit.

Mobile Broadband Pricing Suggests it Is Not a Commodity

Some might look at how mobile broadband gets priced, on a cents per megabyte basis, and conclude that the pricing is somehow irrational or confusing. Some might say the pricing actually illustrates the fact that mobile broadband is not a commodity subject to uniform pricing across all use cases and devices.

AT&T charges smartphone users 8 cents per megabyte for 200MB of data, but 3G USB modem and MiFi users pay 18 cents per megabyte for the same 200MB. Corporate smartpone users pay 2 cents per megabyte ($45 per 2GB), but USB and MiFi users fork over just 1 cent per megabyte ($60 for 5GB). And AT&T charges pay-as-you-go tablet users $15 per each additional 200MB of usage, but it charges pay-as-you-go smartphone users $10.24 per additional 1MB -- that's 128 times the price per megabyte.

T-Mobile charges smartphone users less per megabyte than it does tablet and USB/MiFi users. You pay 5 cents per megabyte for the basic smartphone data plan ($10 per 200MB) but 10 cents if you use one of the other devices ($25 for 250MB). It makes sense that the company's unlimited data plans' pricing favors smartphone users ($30 versus $40), as tablets and laptops are likely to eat up more data than smartphones. "But when you're paying for a set amount of data, the 2:1 cost difference doesn't make sense," InfoWorld says.

The same situation occurs at the other leading mobile carriers as well. Some would argue that is irrational, since the "access" is a commodity. Others would counter that the different pricing suggests the access is not a commodity, and that value, hence price, varies according to the usefulness of access when used in different settings and in different ways.

The price of a beer is different when you pick up a six-pack at the grocery store, when you buy one beer at a restaurant and a different price on an airplane. The beer might be identical; the use case is not.

The same thing is true of mobile broadband: its value and price does vary based on the use case, the types of devices and the applications the bandwidth supports. Even within each use category, prices will vary based on the amount of data the user expects to consume, and the preferences a provider might have for encouraging or discouraging some forms of usage.

Some of us would argue that the variegated pricing actually shows that mobile broadband is not a "commodity," anymore than various use modes for voice, video or messaging actually are.

Consumer Reports readers say AT&T wireless service got worse this year

Consumer Reports reportedly says its latest survey of consumers suggests AT&T's investments have not prevented user perception that service quality has gotten worse over the last year, not better.

ESPN Finds Few Cutting Cord on Cable

Video cord cutting, where consumers disconnect a cable, satellite or telco video service, has happened in 0.28 percent of households in the United States in the last three months, ESPN has found. Offsetting those losses, though, 0.17 percent of households that had been broadcast-only signed up for multichannel video service.

“So the net amount of cord-cutting for one quarter was just one-tenth of 1 percent,” said Glenn Enoch, the vice president for integrated media research for ESPN.

Google Chrome OS Netbook to Launch?

Google could be about to launch the first netbook running their new Chrome operating system, as they host an event in San Francisco tomorrow promising 'exciting news'.

Chrome OS is designed to be a 'cloud' operating system, designed to be lightweight, quick to start up, and based around online applications rather than the traditional desktop programs most operating systems rely on.

Engadget reports that Google will initially only be releasing 65,000 of the machines, mostly going to Google's "friends and family."

So how big a change could the new operating system represent? Perhaps every user will have a different view. One might argue that device operating systems are less important than they used to be, simply because much of the important stuff people do now is a web interaction of some sort.

Still, many users will continue to have one or several important apps that require use of a Windows or iOS environment, typically related to work requirements. For lots of other users without these constraints, the choice might be an iOS environment (driven less by OS considerations than the fact that desire to use Apple devices drive the purchase) or Windows or some other OS that offers a lower device purchase cost (whether directly related to the OS cost or not).

Some of us now do virtually all of our "work" on the web, or using the Internet. I recently realized that the only times I will ever "work" on a PC of any sort is long enough to edit one or two blog posts on an airplane. At all other times, I am connected to the Internet or I don't use the PC. That's just an illustration of the fact that, these days, "doing things with PCs" means "doing things on the Internet."

But that also means the device OS is much less important than it used to be, and removes barriers to adoption of new operating systems. Aside from the fact that using an iPad has more to do with coolness than functionality at this point, many will say a key feature is the "instant on" capability, eliminating the time spent waiting for the OS to load. Aside from everything else, that probably is going to be a more-important feature, going forward, for smartphones, tablets and PCs.

If, every time you power up a PC, tablet, or smartphone, you have to wait, it is a reminder that there is something about that device which is annoying. For users who don't have to power up, and power down, their devices frequently during the day, that irritation might not happen so often. For some, who might frequently have to do so (flying, changing planes, sitting in conference sessions where they want mobiles turned off, using wireless microphones where the devices really have to be off or there is signal interference, or just users who don't like the devices being "on" for other reasons as they move about...such as the danger of disabling a hotel room key card), "instant on" will be a welcome feature throughout the day, simply because devices get turned off and on frequently.

The point is that changing an operating system does not require so much thinking as it used to. That, in turn, makes other attributes of the experience more important.

DIY and Licensed GenAI Patterns Will Continue

As always with software, firms are going to opt for a mix of "do it yourself" owned technology and licensed third party offerings....