Mobile Broadband Consumption Is Creating Problems On All Sides Of The Equation

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Mobile Broadband Consumption Is Creating Problems On All Sides Of The Equation

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4 Dec

You only have to look at the rivalry between AT&T (NYSE: T) and Verizon Wireless to know that mobile broadband will become a choke-point as more users stream video, read email and update their Facebook status on the go.

But according to a breakfast panel discussion in Seattle this morning, the task won’t be easy. The panelists outlined a slew of challenges, ranging from spectrum availability to regulatory concerns, business model questions and the limitations of physics. Openwave’s CEO Ken Denman: “We have a really tough problem, and it’s not just phones that are the problem, but all things non-phone are going to be driving a ton of usage.” Hank Skorny of RealNetworks (NSDQ: RNWK) wondered how carriers will financially support data when handset-makers, like Apple (NSDQ: AAPL), are skimming 30 percent off the revenues of all apps sold, but then driving heavy usage. “We are depriving operators the ability to invest in their own networks. We have this massive double-edge sword forming here.”

However, despite those challenges, there’s no shortage of carriers claiming to be building out the biggest and best network faster than anyone else. There to defend the carrier’s role was T-Mobile’s SVP of Engineering Neville Ray, who also spoke to mocoNews after the event. He said they’ll be serving 200 million users with 3G by the end of the year (which is a smaller footprint than both Verizon and AT&T). But that they’ll leap-frog ahead, by upgrading those markets to HSPA 7.2, which is already supported in most of the handsets being sold today. Then, the carrier will quickly upgrade to HSPA 21, which he said can offer 3-5 mbps with bursts up to 10-12 mbps.

Critical to the network’s performance is something completely non-sexy—backhaul—or the connection from a cell tower to the internet. He said they are hooking up fiber to the towers, so that they can support 50 to 100 mbps. Carriers that are using T1 lines are limited to 1.5 mbps each, he said. That means, no matter what the speed between the tower and the phone, it will be limited to the speed of the backhaul. Neville said AT&T’s been quoted as saying that they are adding two T1s per cellsite. Neville: “That’s not much. They will work through it, I’m sure they will, but for us, we are looking to leverage that.”

The biggest and perhaps only example of an overloaded network has been the experiences of iPhone users, who have consumed data so heavily that they’ve slowed up the experience. Other than AT&T, most carriers have avoided consumer scrutiny so far. Neville said he believes T-Mobile’s network is robust enough. He said by the second half of next year, they’ll start rolling out smartphones with HSPA 21, and will blanket the biggest U.S. cities first. Could T-Mobile handle iPhone users’ thirst for broadband? Neville: “Absolutely. We could do it, for sure. we like to think that we would not have the same level of problems.”

Unfortunately, for iPhone users, the phones are tied to AT&T’s network, and even if they use software to unlock the phones, they won’t work seamlessly on T-Mobile’s network since they are using a different spectrum band from AT&T. Still Neville said that hasn’t stopped users from bringing over their iPhones to T-Mobile and getting 2G speeds. Whether T-Mobile will gain access to the iPhone once AT&T’s exclusivity expires, it’s up in the air, but also likely will be Apple’s choice. With T-Mobile in fourth place, and its commitment to Google’s Android, it will probably be a tough sale.

The panelists participating in the discussion were: Hank Skorny of Real Networks; Dow Draper of Clearwire; (NSDQ: CLWR) Openwave’s CEO Ken Denman, Charlie Martin, CTO of Huawei; and Neville Ray, SVP of engineering for T-Mobile USA. The moderator was GigaOm’s Stacey Higginbotham.

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