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On the brink?
Not so long ago, the telecom industry appeared to be all-powerful. Each country had a dominant, state-run telecom company, which decided what new services would be available to the consumer.
For instance, take ISDN (Integrated Services Digital Network). This technology was ready for deployment since the early seventies, and within a decade, telecom switches routinely contained ISDN capability. Yet, at least in India, it was only well into the nineties that ISDN actually became available.
The progression since then, has been rather phenomenal, but sadly, telecom companies seem to have stagnated. Four years ago, they began to promote 3G, expecting that consumers would quietly switch from their trusted GSM (Global System for Mobile communication) phones to the new mobile multimedia future that had been mapped out for them. 3G, however, has been a non-starter in most parts of the world. So now, the hype is all about 4G.
All that talk will undoubtedly drive the last nail into the coffin for 3G, for who would wish to invest in a technology that is considered dead even before it actually managed to catch hold of mainstream cellphone users. Meanwhile, 4G won’t be available for another couple of years — bad news for companies that have invested in 3G. What about us? Will we be stuck with GSM in the near future? Well, yes and no.
My next cellphone will have GSM and wi-fi, and in a year, it will probably cost slightly more than a purely GSM model. An example of such a phone is Motorola’s CN620, which, according to gizmodo.com, is “from a geeky ‘future of wireless calling’ perspective, extremely hot.” Why? Because if it works as advertised, you should be able to use your CN620 as a SIP (Wi-Fi) handset at the office or local hotspot, then while you’re still talking, wander out of the range of wi-fi and continue talking as your phone seamlessly transfers you to the regular cellular network.” So, my question to you is, what is there to get so excited about?
The reasons are many, but for starters, GSM has serious problems although it is a hugely successful technology — over a billion cellphones have been sold in more than 200 countries in just a few years. By modern standards, the service is quite expensive. If an average SMS is about 20 characters long, and it costs just one rupee to send, you are paying Rs50,000 for a megabyte of data transmitted mostly to people within the same city. Can you imagine the internet taking off at such prices?
Another problem with conventional telecom is billing. It costs a telecom company so much more to bill you for a call, than to actually connect you. Competitive pressures have forced these companies to come up with newer offers, requiring revised billing schemes, which their software and operators are unable to handle properly. Consequently, a large percentage of mobile phone users have billing problems. The problem is, of course, much worse if you use roaming, or use your mobile phone to access the internet.
Once I have wi-fi in my GSM phone, I plan to discontinue roaming, opting to only stay at hotels where they have wi-fi. My clients usually have wi-fi, so I would be using my mobile phone almost free anywhere in the world. GSM roaming, apart from the cost, is fast becoming frivolous, not to mention the additional costs that one has to bear for all the telemarketing calls which one receives while travelling. So, with a wi-fi-GSM phone, one can dispense with roaming, or use a local cash card, if one needs to be in touch all the time.
While in Delhi (my hometown), I would wait to be within reach of a wi-fi hotspot to make long-distance calls, or to upload videos. In fact, if this works well, I might even discontinue the long-distance service on my GSM phone to simplify my bill, if nothing else. In short, once I have such a phone, I expect to pay a lot less money to my telecom service provider.
Besides, countless wi-fi hotspots are free or don’t cost much at all. In fact, many companies provide wi-fi-based internet connectivity for free, because we do not use encryption on wireless networks. Just as I use wi-fi to get connectivity on my laptop in the balcony, so can anyone passing by. Since I pay a flat rate for my internet connection, I don’t really care if others use mine for free, because when I travel, I am often able to use similar, so-called “open” access points for free, too.
Wi-fi hotspots, both free and paid, may hurt GSM the way GSM roaming hurt Iridium, the satellite phone technology that almost literally crashed and burnt within a year of launch. GSM wasn’t available everywhere in the world, but it was in most places you visited and it didn’t make sense to have a separate satellite phone service for the remainder.
Perhaps the most serious mistake telecom companies made in this regard, was persisting with a centralized model. Until the mid-Seventies, computing also worked on this model, based on smart mainframes and dumb terminals. Once the terminal became smart, most companies had little use for mainframes. Similarly, in telecom, the switch is smart, whereas until recently, the “terminals,” that is, phone instruments, had no storage or intelligence. These days, all phones are smart, containing a microprocessor and memory. Yet, such phones are programmed so that they cannot talk directly to each other, but must go through the switch. Not only does this approach add to the cost, it also limits the amount of traffic that can be reliably carried. Even moderate increases in traffic, cause the switch to choke. Imagine what will happen, if a large number of people start to send videos from New Year Eve parties.
Wi-fi is peer-to-peer technology. A wi-fi phone should be able to talk directly to a nearby wi-fi phone, without burdening a central switch. Soon, students on campus, using wi-fi phones, will automatically form a mesh and exchange text, audio and video without burdening the telecom service provider. If you were broke you could simply stop paying for GSM and only use such wi-fi services free of charge. Wi-fi networks use the same networking technology as the internet, and as we have often seen, when the load increases, the internet doesn’t become unusable — all traffic simply slows down, so you still get through, even if it does take a bit longer.
Wi-fi-based networks are also far more robust during disasters. With conventional telecom, if the roof falls on the electronics at the switch, the entire network comes to a halt. In wi-fi, each node is smart, and those that are not destroyed, quickly establish contact with each other and the internet. Last year, as you recall, there were severe floods in Sylhet, Bangladesh. A friend of mine, who has interconnected villages there with wi-fi, often popped up during those days on my MSN Messenger, and each time I asked him about the flood “outside.” Yes, there was, he responded, but except for those nodes that were submerged, the rest had easily been rerouted and continued functioning normally. In decentralized networks, it is hard to knock them all out.
Wi-fi has another significant advantage, that is, technological innovations occur rapidly. Since it relies on standard Ethernet and internet protocols, people do not have to write applications for the platform from scratch. With open standards, intellectual property costs are kept low as well.
While wi-fi made use of standard internet protocols and software, telecom companies have time and again reinvented the wheel. In the early Nineties, they pushed the email standard X.400, although internet email was already well established. Very few people remember X.400 now.
Given that 3G is dead, and 4G still far away, a wi-fi-GSM combo phone seems like the best bet for those who want to keep their costs down, while enjoying roaming benefits as well as exchanging large amounts of data.
For an industry that is riding an incredible boom for over a decade, telecom has made many serious mistakes and seen many bankruptcies. Much of the money that fuelled the dotcom boom came from the telecos, for they, more than anyone else, had surplus cash. Expecting rapid growth in bandwidth demand, they put vast quantities of opticfibre cable into the ground. They did not, however, have any means of actually delivering large quantities of bandwidth to homes or mobile consumers. When people lost interest in landlines, concerns rose in the industry. With huge investments in landlines, it began to promote DSL. Here too, there have been teething problems, and it is not clear if DSL will be able to keep pace with our growing hunger for bandwidth.
The rate of change in telecom has reached the same pace found in computers and the internet, where companies were quickly born, became successful and then succumbed to an untimely death. Remember when all of us used Yahoo! for searches, then Alta Vista, then one or two other engines, before we were captured by Google? Telecom companies cannot afford to be treated this way. They are sinking huge investments hoping to recover their costs over several years. Once, they could dictate the pace of technological change, and allow upgrades. However, that was another era.
Of course, companies that are so rich and powerful do not die gracefully, nor do they know how to adapt fast enough, so they are attempting to put up a fight. This has been anticipated. In 2002, a few dozen academics, consultant and corporate leaders wrote, in an open letter to the Federal Communication Commission (FCC),
Examples of attempts to skew the level playing field are the restrictions many countries have placed on internet telephony. In India, for instance, you are not allowed to dial a normal PSTN phone from the internet. It means that if you can afford a PC, you can receive cheap calls. However, if you are poor, and must rely on a public phone, you have no access to internet telephony.
MuniWireless.com talks about how, in the US, telecom companies are engaging in a “massive state-by-state lobbying campaign contribution efforts to push forward legislation that would attempt to stall the rising competitive threat of very low cost, city-wide, wireless networks” (see
The problem for telecom companies, though, is that they have nothing to offer in its place. They whetted our appetites for bandwidth on the move and if they cannot deliver, others can. It is not often that one sees an entire industry totter. Those of us who have been in the computer industry for some decades, have seen this happen with mainframe computer manufacturers, and so are witnessing history repeat itself.
The writer
