Bandwidth constraints not an issue for new entrants: analysts

The winners in Industry Canada's Advanced Wireless Services (AWS) spectrum auction will be able to compete on services against the country's incumbent wireless players, despite having a fraction of the spectrum, according to two industry analysts. The winners in Industry Canada's Advanced Wireless Services (AWS) spectrum auction will be able to compete on services against the country's incumbent wireless players, despite having a fraction of the spectrum, according to two industry analysts.Michael Rozender of Rozender Consultants International, and Mark Goldberg of Mark H. Goldberg & Associates, agree new entrants have enough bandwidth to launch services to compete against the larger and well-established operations of Bell Mobility, Rogers Communications and Telus Mobility.Goldberg says 20 MHz of spectrum is sufficient to provide enough bandwidth and throughput speeds to offer High Speed Packet Access (HSPA) type services. (Rogers currently offers HSPA to about 60% of the Canadian population.) Telephony will remain one of the primary services as well because, as he notes, the killer application from a revenue perspective is still voice and that's where the real money is."They've got enough to get going with today's generation of services," Goldberg tells Report on Wireless. "Again, you have to keep in mind that today's generation of equipment can't do much more ."Rozender concurs, noting that a 10 MHz slice of spectrum can handle 20 to 30 Mbps, and that's nice bandwidth when you have 20 or 30 users hitting the same tower concurrently. But it becomes more problematic as more users join the network, causing network speeds to slow.Goldberg says that for an operator to offer true broadband, 4G type services, 40 MHz is required. The only new entrant to secure that much spectrum in the AWS auction was Vidéotron, which it did in most of Quebec.Questions still remain about the viability of this spectrum because AWS hasn't proven to be too successful south of the border, according to Rozender. He notes that handset makers have been reluctant to deliver devices when the carriers are doing little in terms of network deployments. But he adds changes could be on the horizon now that T-Mobile has purchased a large chunk of AWS spectrum from NextWave and committed US$100 million towards this initiative."So if the American AWS stuff starts to go places, it goes without saying that Canada will follow a year, year and a half down the road," says Rozender. What types of applications will new entrants launch?This is, of course, the $64-million question (or shall we say the $1.63 billion question - the total value of new entrant standing high bids) and with new entrants still under a gag order preventing them from talking in detail about future plans, we can only speculate. But according to Goldberg and Rozender, there are still some neat, innovative, cool and compelling applications the new entrants can offer to customers.Rozender highlights the impact of the iPhone on a new generation of applications and services. He suggests that the handset could become a "gateway to purchasing" goods and services either through users browsing the Internet on their device or through push-enabled applications. Walking past a Starbucks would prompt a pop-up on the handset, offering the user a 10% discount on a latte, he adds as an example."We are going to use it, in my opinion to buy things, to compare prices look at demos. We're going to be looking at rich media to help us either decide what to buy, when to buy it, how to buy it or what alternative there are," he says. "So it's a gateway to purchasing that then will be using a fair big portion of the bandwidth that's being offered."Goldberg notes that it's not the amount of bandwidth a carrier has but what it does with it that is going to determine a new entrant's success. Having a lot of bandwidth is certainly helpful, he says, but "it's how you bundle it." Creatively packaging the services in a manner that appeals to customers whether that is cool, interesting or value-priced is critical, he adds.A prime example, according to Goldberg, is Data & Audio-Visual Enterprises Wireless (DAVE). While the company won only 10 MHz of spectrum in a number of regions across the country, it has the ability to create a compelling offer because of its affiliation with XM Radio. "Maybe, they're going to have XM on demand in a really interesting way that appeals to users," he says.New entrant launches aren't expected until next year at the earliest, but that doesn't mean the incumbent wireless players should be complacent, cautions Rozender. "I feel, Bell, Telus and Rogers don't quite yet understand how quickly and aggressively the market is changing," he says. "Perhaps the Daves, the Globalives, the Shaws and the Braggs are going to make some inroads because of their feel for where the market is going, how it's going to be provisioned and what services they are going to offer. And it may not be as a traditional me-too cellular-oriented service."

Bandwidth constraints not an issue for new entrants: analysts

News | 07/31/2008 1:14 am EDT

To keep reading, get a free trial.

Already a Subscriber?

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us