Wednesday, August 13, 2008

Telecom 850 WCDMA - more developments?

Juha posted on the rumours of a delay to the launch to Telecom's WCDMA network. I have no further detail but it's got me thinking some more.

I've been doing a lot more sniffing around on the handset situation for Telecom should they decide to move to 850 WCDMA as part of their UMTS roll-out.

Based on my last post suggesting it needs to be driven by coverage, handsets and pricing for customers, it's clear that there is a potential long-term coverage play for Telecom in all of this. However handsets are the key.

It's my opinion that, should Telecom go down this path, they should only look at one radio spec for their handsets. That is quad-band GSM and a least dual band WCDMA (850 / 2100). Throw in 1900 WCDMA if you can get it, but given that is primarily a US driven requirement and they have rolled 850 WCDMA there 1900 is not a mandatory requirement.

The reason behind choosing a single spec handset is that Telecom can then run a very simple and effective long-run campaign for its customers : 

Buy any Next Gen Mobile Telecom handset and you can roam anywhere around the world and have the best coverage for voice and data here or overseas. Period. 

Very strong coverage position to take and one that could put Vodafone on the backfoot for quite a period of time.

My reasoning for this spec, as opposed to a local spec for 850 only devices and 850 /2100 devices for 'Worldmode' is simple. 

1. Remove a confusing choice for customers about whether they might or might not want to travel somewhere in the world with their mobile. With this spec they can travel anywhere. The last thing you want a customer to have to check is what band their mobile is before they travel - there is usually too much to do anyway!

2. Take a position on coverage that Vodafone can't match - Fastest data here and around the world, where-ever you go.

Key driver for this is handsets. A couple of days of searching the 'net and this is a mixed picture.

On the positive side there is the number 1 handset vendor globally, Nokia, who have a range of 13 devices that meet this criteria. Not bad until you see that their overall range for GSM 900 / UMTS 2100 stands at 58. Still, much better than the days of TDMA and CDMA where the Nokia devices available were around 3-4 vs. 50 -60. The other positive is around iPhone. Will provide great coverage for the 3G iPhone. However this will probably neutralise Vodafone locally at best as they will have mopped up most of the early adopters, notwithstanding supply chain issues from Apple.

On the negative side - there just aren't very many other providers of this spec. A look at GSMArena shows Sony Ericsson has 6, Samsung has 1 and these are out of ranges of around 40 for Sony Ericsson and 70 for Samsung. HTC also has a few and then the numbers dwindle after that.

Overall the answer is that the range is good enough, however there is very little negotiating leverage for Telecom with such a small range of providers. That will probably drive up cost of sale temporarily. The temptation for Telecom will be to buy a cheap handset that reduces cost of sale. That is a short term game. 

Do. Not. Do. That. 

If there is one thing that I have learned from 15 years of deploying AMPS, D-AMPS, CDPD and CDMA it's that as soon as you bow to this short-term demand then you are forever trying to paper over the cracks.

Thinking long-term would mean the following

1. Build strong and deep relationships with 4-5 handset vendors. Don't nickle and dime them.

2. Don't launch until you have a nationwide NZ 850 WCDMA network - start with a superior local coverage position and hold it all the way through.

3. Buy a handset spec that gives best global roaming. And only one spec please!

4. Price data on a 10 year return on infrastructure, not 3.

The pain will be taking a hit on Mobile market share until this launches. Given how low the share-price is now, I think this is probably priced in already according to Valuecruncher.


2 comments:

Paul said...

Hi Miki,

"If there is one thing that I have learned from 15 years of deploying AMPS, D-AMPS, CDPD and CDMA"

This to me is the critical statement. To me, if there's something that Telecom should have learnt its this.
Technology standards aren't standard. D-AMPS was supposed to be the same in the US and EU. The second thing is that following the US trend is the wrong game. EU standards are far more successful, better scale and better support from the ecosystem around the network.

camatcam said...

850 country wide - sounds like a great option to gain the front foot and hold it, yes it's a delay from what was promised but a piecemeal 2g/3g network was always just a first step and going full frontal a little later but a lot earlier than full 3g was going to be in place hs got to be good for all.