Is Mobile in Ireland Destroying Infrastructure?

OK the Headline is a bit over the top but consider the following:

  1. A Basic Mobile Internet package with “free” Modem is under 20 Euro a month (cost perhaps €150?).
  2. All four Mobile Operators have Mobile Phone Licences, they are not primarily ISPs.
  3. Mobile Phone Voice revenue for the same amount of data transfer as Internet access is 150 times to 500 times higher. If incoming calls to the network and outgoing calls are equal, then termination charges cancel. For Data (150 times to 500 times more traffic for same revenue) they pay transit in and out of their network. Some proportion of voice calls stay on their network, virtually all internet traffic is outside their Network. Voice & SMS is the main product of Mobile Operators.
  4. Three of Mobile Operators are large International companies, the fourth owned by incumbent. Many of the the Fixed Wireless Operators are small local companies. Only four Mobile operators. Many ISPs.
  5. The Mobile Operators have National Licences. Only eircom has a National Wireless Licence. The W.ISPs only have licensed circles.
  6. For the Mobile Operators Voice is the reason for their rollouts. They do not have very much in the way of performance commitments in their licences for Data & Contention compared to Wireless ISPs.
  7. 50 Minutes + 50 text on Mobile is > 20% cheaper than Line Rental before you even make a fixed call.
  8. The Mobile operators are allowed to call their data product “Broadband” even though it isn’t.
  9. The Mobile operators and especially 3 Ireland also can “cash” in on the fact that 3G/HSPA “won” the NBS.
  10. Mobile quotes the peak mast speed shared among everyone, real ISPs quote the package speed. On Real Broadband the average throughput can close to system peak speed and 10x to 50x the package speed. On Mobile the average throughput of all users added together is 1/5th to 1/20th of the peak speed.
  11. Mobile makes great play of how good LTE may be (even though it needs a new licence, new modem and new spectrum). The Peak Speed of LTE is always quoted (100Mbps+) rather than the average per user speed (1Mbps for 5 simulataneous users might be typical). Real Broadband quotes today’s speed. Fibre can do 10Gbps and probably 60Gbps by the time LTE is widespread. Fixed Wireless in SAME spectrum is always 10x to 20x more speed or capacity than ANY Mobile system.
  12. There is no enforcement or monitoring of Coverage or Speed claims

The Mobile Operators obviously can’t sustain the current pricing. Even at that, the highest Cap basic Mobile is about 1/2 a typical Broadband Cap.

If the Mobile operators can sustain their obviously cross subsidised pricing they will continue to cannibalise the Fixed Line (Dialup and DSL) markets. By the time people realize how bad it is they are on a 12 month or 18 month Contract.

Maybe 20% or so of users only need the performance of Mobile anyway. Others will not cancel at end of contract as it’s too much bother. Churn may be be high, but to bad for the Mobile Operator.

Potential Fixed Wireless Investors will not invest in limited coverage and twice as expensive to customer and high per user install cost when Mobile is cheap and marketed Nationwide with zero install cost and “free” Modems.

DSL (LLU and resellers) can’t compete with Mobile Pricing. Because of Debts of almost 5 Billion (inc Pension etc) eircom can’t reduce their line rental to 1/4 or 1/3rd to compete. Instead eircom is reselling their Meteor subsidiaries packages as if it is Broadband, accelerating the reduction of fixed lines (from 82% at privatisation to 66% now, 1/3rd of those are welfare subsidised).

Only UPC can compete against the Mobile’s Strategy of Misleading advertising and artificially low price.

In the end, if Mobile Operators can sustain the current misleading marketing and prices long enough the only competition left of any size will be UPC. All the larger DSL ISPs will be gone (BT, Magnet, Smart etc.)

Conclusion
Unless there is a “level playing” field with enforced honest advertising on speed and performance, removal of the Claim Broadband on all Mobile Products, independent monitoring of real speeds, Indoor coverage and contention and a limit to the artificial pricing we are going to see:

  • Drop in Fixed line usage to 20% or less.
  • No significant new FWA rollouts.
  • Very little ISP investment outside of UPC & Mobile.
  • Drop number of real Broadband customers.
  • Increasing digital divide with UK and rest of Europe.
  • Majority of Internet users on much less than 1Mbps down, 100kbps up and more than 150ms typical with under 5GByte Cap.

Things we should do for a level playing field:

  1. National & Regional FWA licences, not circles
  2. Joined up thinking on Fibre and MANs.
  3. Scrap NBS, or seriously change its misleading advertising at least. It’s not bringing Broadband anywhere. 3 Ireland is rolling out a Mobile Phone Network. Two to Four years overdue!
  4. Mandate a maximum retail line rental of 7 Euro. This will accelerate eircom’s collapse and then it can be restructured without parasites. Line rental should not be servicing debt created by leveraged buyouts.
  5. EU / Irish legislation to stop “leveraged” type buyouts. They are not investments and ramp up the Debt so that future Infrastructure investment stops.
  6. Clear defined Cap/Excess advertising. No vague T&C or FUPs. Most people don’t realise excess on Real Broadband is cheap or involves throttling. On Mobile excess is €50 to €490 a Gigabyte.

Related note:

Why WWans (Outdoor WiFi) failed http://www.mobileforesight.com/2009/06/vision-public-wlan-failure/

A bit simplistic as it doesn’t address spectrum, contention and scaling issues.