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2009
29
August

Is Mobile “midband” in Ireland Destroying broadband Infrastructure?

What is the problem?

  • There is an explosion in products claiming to be “broadband”, in fact many of these are mobile “midband” products.
  • IrelandOffline examine some of the consequences of this explosion in these products.
The term midband is used to describe these products as opposed to broadband as these products are
really dial up substitutes and the  speeds delivered can be so variable as to make the claims of broadband less than accurate.
Furthermore the headline broadband speeds quoted are the full total of “speeds” delivered from the transmitter, this bandwidth
is shared amongst all users of the sector. The more users on the sector the less bandwidth is available to each subscriber…
Main points
The Headline to this piece may seem exaggerated but please consider the following points:
  1. A Basic Mobile Internet package with “free” Modem is under 20 Euro a month (Modem cost perhaps up to €150?).
  2. All four Mobile Operators have Mobile Phone Licences, they are not primarily internet service providers (ISPs)
  3. Mobile Phone Voice pricing for the same amount of data transfer as Internet access is 150 times to 500 times higher. If incoming calls to the mobile 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 the 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 Wireless ISPs only have licensed “circles”of coverage
  6. For the Mobile Operators Voice is the reason for their roll-outs. 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 alone before you even make a fixed call or add Broadband.
  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 [spell out?].
  10. Mobile quotes the peak mast speed shared among everyone, real ISPs quote the package speed. On Real Broadband the average throughput can be 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 [spell out] 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 simultaneous 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 not 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 mobile broadband is they are signed up to a 12 month or 18 month contract.
Maybe 20% or so of users only need the theoretical performance of Mobile anyway. Others will not cancel at end of contract as it’s too much bother. Churn may be be high, but too bad for the Mobile Operator.
Potential Fixed Wireless Investors will not invest in limited coverage and appear to be twice as expensive to the customer and high per user install cost when Mobile is apparently 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 subsidiary’s 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 (cable Broadband, with option of TV, HDTV and phone calls on the same cable) can compete against the Mobile’s Strategy of misleading advertising and artificially low price.
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.)
Things we should do for a level playing field:
  1. National & Regional FWA [spell out] licences, not just 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 simply rolling out a Mobile Phone Network (with a data addon). 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 Fair Usage Policies. Most people don’t realise excess on Real Broadband is cheap or involves throttling. On Mobile excess is €50 to over €490 a Gigabyte for exceeding the cap.
Maybe the headline isn’t “over the top” if you are a Fixed Wireless ISP or DSL seller/reseller trying to get money to invest in more infrastructure.
Conclusion
Unless there is a “level playing” field with enforced honest advertising (with all the hidden terms and conditions highlighted) 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 roll outs.
  • 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.
Glossary
broadband

The FCC defines broadband as : “basic broadband” defines download speeds between 768Kbps and 1.5Mbps.
Cap
The amount of data allowed to be downloaded and uploaded as a total.
Contention
is the ratio of the potential maximum demand to the actual bandwidth.
digital divide
The gap between urban and rural broadband provision.
ISP
Internet Service Provider.
FWA
Fixed Wireless Access.
MANs
Metropolitan area Network. Optical Fibre rings around a number of towns.
Midband
A more appropriate name for Mobile dialup.
WISP
Wireless Internet Service Provider.

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October 8th, 2009 - 10:57 am #

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