Could the Bloom be Off Wireless?
Could the bloom be off the wireless as the access vehicle of choice? Of course not! Afterall, for the past several years conventional wisdom has been that wireless communication will largely displace wireline access, given its convenience, flexibility and lower cost of deployment. People were going to ditch their fixed line connections, and Fixed Wireless Access was going to explode onto the scene, as a vehicle to meet the demands of the under served masses in rapidly developing regions of our globe.
Well, despite the fact that there remains a lot of merit in this view. Enough time has past that it is worth taking stock. Consider the following:
- Companies and businesses that were built around fixed wireless access for the masses, have universally failed. The first generation of products based on LMDS and MMDS failed to gain traction, in part due to technical issues associated with line-of-site requirements. Since then, there has been a a new generation of products and start-ups developed around more versitile 3G mobile technologies, with WiMAX products about to launch. So far these too have generally failed to achieve their promise.
- Spectrum is a finite and seriously constrained resource. Despite the most efficient encoding technology, wireless technologies will never be able to come close to achieving the capacity and speeds of the most advanced fiber optic solutions.
- Wireless connections are inherently lossy, creating additional challenges for Quality of Service. Where connection integrity is important (many internet applications), wireline access will invariably be superior.
- Today, Service Provider Fixed Phone lines are being replaced, not with wireless technologies, but rather with fixed line alternatives that offer integrated broadband and VoIP solutions.
Undoubtedly, wireless technology will have an increasing role to play in communications, but it is interesting to note, that at a time when MEX is reporting that investment in wireless technology has dropped, the New York Times is reporting that Verison is investing huge $$ to broadly deploy FTTH in markets like New York. Moreover, the amount invested in FTTH in China (originally seen as a huge market for FWA) has grown at a much faster rate than FWA.
Who’d have guessed?!
Update: The NY Times contained a further report earlier this week. This time they focused on the Cable industry’s response to Verizon’s aggressive fiber optic build out, and the threat that it represents to their business.
