Pipes, pads and clouds
Networks are at breaking point, says company providing alternative means for mobile devices to get online. Bear with me whilst I haphazardly tie this news item with another recent piece of fare, the iPad launch. Small speculations, loosely coupled.
I'll bet that from a customers perspective the crappest bit of an iPhone - the bit that bugs you the most, that causes you the most grief and fails the most often - is the network. We read all sorts of complaints about AT&T in the US, and O2 have taken a bit of a hammering over here. That's understandable, in a way - no operator has an unblemished track record in customer service, and as the experience of a smart device improves, the networks increasingly fall into its shadow. Operators also get scant loyalty compared to the device manufacturers, and this has been the case since looong before Apple came along.
I thought one of the most interesting bits in the iPad launch was around the connectivity: there's no contract. It's a data-only device which will move pretty seamlessly between Wi-fi and 3G, and which involves no subscription or commitment to an operator, just a monthly payment.
I think it's quite well-known that most data usage takes place in the home or at work - both areas which are likely to have well-provisioned wi-fi. Where does this leave the poor old operator? They end up as the guys (and girls) providing the patchy network that gets used when nothing else is available, that's paid for only when it's used, and that generates zero loyalty or commitment from customers. That doesn't sound like a good place to be, but you can bet that once some operators start offering tariffs that support this model, others will feel pressure (from both customers and OEMs) to follow suit.
This feels to me like the start of a shift to operators as pipes. I'm avoiding labelling them "dumb pipes"; let's not pretend that doing this sort of thing properly, at scale, is easy. Someone has to master the black arts of radio planning, lease sites, own spectrum, do billing, keep the lights on and the routers humming... and as demand for mobile data grows this will get harder, not easier. I bet there are folks looking at bandwidth projections for 20 years' time right now, and gently soiling themselves.
Maybe there won't be room for 5 of these new "utility" style businesses in a single country (as we have here in the UK) and we'll see more consolidation; and maybe some of them will invest in Wi-fi infrastructure - through, perhaps, companies like The Cloud - themselves.