Infrastructure is the New Black

InfrastructureMuch new infrastructure, but not for the telcos

The race for ubiquitous bandwidth and access to the communication-starved millions in developing countries is on. Gone are the days when monopoly telcos sat down in long-lasting committee meetings and planned routes, defined standards, negotiated capacity and costs. Now it’s every man for himself from the mightiest like Google and Facebook expressing global coverage ambitions, to the newbies like Siklu and AWTG looking to build wireless WiFi backhaul solutions at the municipal levels. At this rate the telcos, concerned over being reduced to bit carriers, are approaching irrelevance — they won’t even be providing the pipes anymore.

Clearly, bandwidth has become a sexy investment option for private companies and venture capital. The average consumer’s propensity to consume mobile data is going through the roof, and the armada of network-connected ‘things’ is on a rampage — the need for speed and capacity seems a very safe economic bet.

Fortunately, we have not yet been presented with dangerous physiological effects of massively increased levels of radio wave radiation, but our span-of-attention is sorely stretched, and many people in public places seem to be losing touch with their immediate surroundings as they wander in a semi-virtual world awash with music, podcasts, messages, and far off friends. The transition will be complete once Google Glass takes over — then we can watch our own reality on the screen fast-forward or in slow motion, 24×7.

Google and Facebook present global visions

Google has for years been exploring ways to build its own global broadband access infrastructure, mirroring its global content delivery network (CDN). Negotiations with the carriers haven’t really panned out. The US Federal Communications Commission’s allowance of paid-for higher priority doesn’t answer Google’s needs either. So Google first came up with fantasies of global high-altitude balloons. The aptly named ‘Project Loon’ took off when Google launched 30 balloons offering 3G-like speeds in areas of New Zealand that today have no internet connection (another loss for the local telcos). Then Google purchased Titan Aerospace so it could launch high-altitude solar-powered drones able to stay aloft for five years at a time. Not to be completely outdone, Facebook last year bought Ascenta, a UK solar-powered drone company as part of its initiative. Now Google is supposedly (that is according the Wall Street Journal) going into space with a 180-LEO (Low Earth Orbit) satellite system, technically akin to Iridium that went belly-up some years ago, but now with a very different business model and a lot more investment power. The intention is to provide Internet access to remote places that have been unable to connect so far.

At a more modest and down-to-Earth level, Siklu, an Israeli provider of gigabit capacity millimetre wave wireless backhaul solutions operating in the 60, 70 and 80 GHz bands, is teaming up with UK-based AWTG, an end-to-end wireless telecom technical service provider, in order to provide easy-installable, high-speeds WiFi backhaul networks in municipal-centers. The product used is the 1Gbps EtherHaul-600T with an auto-alignment kit. The Small Cell test bed is located in Barnsley in the UK, and the installation work is being done by the Barnsley Highways Department, which has no telco skills whatsoever — it’s just more street furniture.

It affects us all: consumers, businesses, telcos and network vendors alike

For consumers in advanced societies, the more nefarious aspects of our increasingly digital lives include more spam, more malware, and more spook communities (public and private) having a field day with all our personal data. ‘Die gedanken sind frei’ (‘Thoughts are free’) the opposition used to say in communist East Germany. That may no longer be the case today in our democracies — at least if we ever disclose them to any digital device. We can certainly expect increased manipulation of our consumer preferences as well as our political attitudes. For the millions of under-served new users in developing countries it entails a fire-hose of commercial and political advertising, which they must learn to deal with.

For the telcos, all this capacity building outside their networks, presents an unwelcome challenge from content- and advertising-financed OTT competitors. It will inevitably lead to continued price drops towards zero. Telcos will have to change their business model — getting into services, and not calling customer contacts for ‘truck rolls’, striking up new alliances where their network competencies translate directly into business value, even becoming ‘brokers’ advising business customers on how to negotiate the best network deals with the new competitors.

For the infrastructure vendors, this is all great news.

Image credit: WikiMedia Commons / CC-BY-SA