Monday, November 03, 2008

Technology Conundrum

Vasu Reddy from Chicago

Dual Technologies
3 G
Next Generation Networks

We can go on about the long list of technical or fancy terms that we continue to read about in reference to communications. Talking about the technology is a global feature that typically announces the latest and greatest with each major communications event. It is typical to claim that each such advancement is life changing. India has its share great lobbying groups for various mobile technology offerings, and they are merciless in promoting their own vested interests as the best available alterative to solve the ever growing need for spectrum.

India is blessed with explosive growth in the new subscribers each month. The country’s new subscribers each month equal to many small countries total subscribers, and with no slowing down in these projections the value of spectrum is increasingly evident.

No new mobile technology is being introduced specifically for the Indian market, rather the time tested and well deployed networks are being promoted in India. In reality there is no new advancement in mobile network technology that will radically alter the capacity or behavior of users. Each of the networks already deployed are well designed and well tested prior to their commercialization, and offer varying degrees of abilities to the providers and users. In some instances the advancement of technology is to facilitate more users on the same spectrum, while many of the new networks being promoted offer more services such as video, data and multimedia, outside of the traditional voice. Obviously the new services will require more bandwidth compared to the voice only services used by majority of the people who use mobile networks.

It is reasonable to emphasize the efficiencies of a technology in handling number of subscribers. Outside of this a subscriber is not preview to the technical parameters of the network. A user will look at quality, availability and price of the service in the particular area where he or she needs telephony. Only a small percentage of the overall subscribers are high-end data or video or multimedia users, and perhaps 90% of India’s users are voice only users. Without preview to the exact nature of the user base, it is quite obvious that simple feature like voice mail is not very prevalent with Indian mobile subscribers. Indian market has one of the highest busy and abandoned calls in the world as there is no voice mail, and a caller keeps calling until the subscriber responds. Even if a small portion of subscribers have the need for multimedia functionality, the networks are primarily dependent on high volume of users with voice communications as their primary need.

The telephony service is cheap, available and when needed, and thus the huge growth in numbers. To believe that technology is in the minds of 95% of Indian subscribers is simply an assumption which will remain an assumption. Pricing of service is the primary driver when the service becomes available in a market and the technology is not a decision driver.

The market value of the network is naturally driven by numbers; subscribers, revenue per user, profit per user, management, organization, availability and a multitude of variables that drive the valuation, along with the capacity of the network. In India the capacity probably is a great measure of future value of the network as the forecast for increase in subscribers is greater then the technical viability of current networks to handle the subscriber base. This is not a market or technical factor for India alone, but a global challenge for high growth markets. India with its own rules and regulations of licensing and managing spectrum sometimes self imposes these technology issues, which are irrelevant in the life cycle of a telephone network.

Manufacturers always will find new innovations to tackle the available resources verses forecasted users in every given technology. As spectrum is not a variable resource, the utility of spectrum is constantly bettered with technology life cycle, and users are seldom inconvenienced by the evolution of technology. Indian markets are not isolated in such transformation of networks, and there is no dearth in advancements. We already have technology available that will meet the needs of subscribers in the foreseeable future. Except with the vested interests there is no technology conflict. Technology will always be ahead of user needs.

The man with the mobile on the street is not looking for any more than quality service at inexpensive rates. The discussions on technology preferences and superior qualities are for the manufacturers and vested interests in different formats of the technology, and really is not an overwhelming factor in decision making for the consumer. The technocrats and the policy making bodies should find the most viable technology which offers most to the consumer, and let the rest to the market forces. There will always be something bigger, better and will be with more options.

November 3rd 2008
Vasu Reddy
Optus Technologies, Inc.