Nobody can say that the tech space isn’t moving at frightening speed, and that may be true on the business side as much as with the technology itself. We’ve got two stories of stunning shifts in the tech business landscape, and while neither are confirmed at this moment, there’s certainly a level of plausibility that can’t be ignored.
The first of the stories, one that’s been percolating below the surface for a bit, is that the “wholesale 4G” hopeful LightSquared is looking to dump its plans to build out a network and instead piggyback on Sprint’s LTE modernization plans. This particular tune goes back at least six months; I’ve been skeptical from day one about a pure MVNO-host model for LightSquared given the plummeting margins in mobile broadband. In fact, I told a vendor then that I’d not put much stake in the LightSquared build-out plans.
The obvious question now, presuming the rumor is true, is what this does to NSN. Given that in my view they never had a shot at this because it was never going to be financially feasible, the answer is “nothing” in an objective sense. Subjectively it obviously would hurt NSN because it looks like another slip from a company that seems to be slipping all too often. NSN’s Motorola-pieces acquisition has had its closing delayed again, for example, and the company seems unable to shake a marketing and positioning paralysis that’s almost a legend in the space.
The least obvious question, and the most important one, is whether this is a clear sign that the mobile broadband space is already circling the drain before any significant LTE deployment and before the full wave of tablets hits the market and drives down revenue per bit even further. If there’s any sanity in the current neutrality flap here in the US (since it’s politics, such sanity would be a happy accident), the core truth is that we’re attempting to prop up a business model with regulations that can’t be sustained at the financial level. That would suggest the right approach is minimalist; guarantee non-discrimination and stay out of issues like compensation and settlement, premium handling, etc. Give the industry no exit path but quitting, and they might LightSquared en masse.
At the root of the problem here is the lack of industry foresight into the impact of mobile broadband. A full year ago I started pushing the concept that mobile broadband, flexible appliances, and consumer behavior were a big interdependent feedback loop (premium blog clients have access to the presentation, “Mobility, Behavior, and the Transformation of Telecom”). Recent research by comScore shows that smartphones and tablets are already transforming behavior simply because you can use them everywhere you go and not just at home or in the office. If checking Facebook is your thing, it’s likely that mobile checking will come to dominate simply because you can do it all the time. Habitual behaviors that can be universally fed by one technology and only episodically by another will migrate to the place where they’re satisfied most of the time. That means that wireline quickly becomes linked primarily to things that are necessarily anchored, like viewing stuff on a HDTV. Tablets that size would really jam up the subways, after all.
In other tech news, the ITU has decided firmly to go its own way with a MPLS-Ethernet management standard, an issue it’s been fighting with the IETF over for a year or more. This is another of those issues that I think is being covered badly and analyzed perhaps even worse. The core of the dissent here, as operators tell me, is that the IETF wants transport MPLS to be managed as an IP service alone, and the operators want it to be managed at least optionally as an extension of the carrier Ethernet management standards. Why? Because you may recall that the whole T-MPLS/MPLS-TP thing was really spawned by a desire do cut off a set of Ethernet enhancements known as either PBB-TE or PBT. Where MPLS-TP is intended to supplement Ethernet metro infrastructure, it makes sense to manage it using Ethernet standards (hence, the ITU Y.1731 standard). That would provide end-to-end management capability, and it’s not clear to me why anyone thinks that providing E2E management as an option in carrier Ethernet deployments of MPLS is a bad thing. I guess I don’t understand standards-religious wars.
But then, tech is just a subset of society.