SNS in the News - March 1, 2002

Answer in sight for last mile

Australian Financial Review, March 1
By Tony Boyd

A leading American technology analyst and forecaster says commercial imperatives could force a convergence in third-generation and 802.11b wireless technologies to solve the problem of the broadband "last mile".

Mr Mark Anderson, the founder of Strategic News Service, said a very aggressive player in the 3G market, such as Hutchison, could get around the problem of the expensive local loop by joining forces with providers using the unlicensed 2.4ghz spectrum used by 802.11b, technology also known as wi-fi.

"We are in a world where governments have already cobbled legacy players who bid on 3G spectrum," he said. "Hutchison comes into those markets, like Britain for instance, and says: 'While you are in the middle of you saying it's going to be three years from now we were thinking about next month. We will just take your top five markets, how's that'.

"And that's exactly what they are going to do. They can come in with very low cost bases. They can come in with the best equipment and essentially have no legacy overhang or existing infrastructure that they have to write off for another three years.

"So they only win by being fast and they are accelerating timetables wherever they play, certainly in England."

Mr Anderson said the combination of fleet-footed carriers with wi-fi was potentially explosive.

"If you were an operator of 3G and you saw wi-fi coming what would your response be?

"If you can't beat 'em [the incumbent telco giants] how do you join em? Could you convert your existing system today, which looks a lot like a voice-based centralised system of one-to-one, into a broadband many to many'?

"Sure you could. If you did that then the whole 3G network becomes a giant wi-fi network and suddenly you have your laptop with a new card, a 3G card.

"You go into a Hutchison area and you power up and you are on the same network, a virtual private network with all your mates from work who are across the country.

"It is so brilliant that I think someone will do this. I haven't heard of anyone doing this yet but I think they are going to do it. I think what you will see is something like an IP version six network on 3G.

"The funniest part of this story is all these guys who have been sitting around moaning about there is no need for 3G network and asking stuff like, 'What you are going to do, download more videos?"

Mr Anderson said once you mentioned the word laptop in the context of 3G then the whole argument changes from one about the difficulty of using small hand-held devices to a convincing argument for using big screen devices at home and work.