13 September 2005

Wireless substitution for wireline service

The Yankee Group recently published a report on the substitution of wireless for wireline service. Nobody disputes that this is an ongoing trend. The question is, when will it stop. Do you have both wireless and wireline service? If so, why haven't you cancelled the wireline service? If not, how are you meeting you voice, data, and video communication needs?

Another interesting question is what the wireline carriers should do in response to this trend. Should they abandon their infrastructure and write it off (eg. shrink as a company)? Should they transform their infrastructure in some way? If the latter, how?

5 comments:

Anonymous said...

Do companies and individuals have
a suspicion that, perhaps, wireless
is not as robust a medium as wireline.
The recent hurricane certainly didn't
inspire confidence in wireless. Nor
for that matter did 9/11.

Martin Weiss said...

Yes and no ... wireless capacity may not have been adequate during these emergencies, but I would venture to guess that wireless service is much more widely available today in the Katrina disaster area than wireline.

This is substantially because nearly all capacity investments in wireless infrastructure are shared, whereas a large fraction of the investment in wireline systems is dedicated. That is, a tower serves many users, whereas a telephone wire serves one user.

James Twigger said...

At present, I have always assumed that wireless services were less reliable and could not support a large number of users. This opinion is expressed mostly with regards local area networks within an organization. Although easy to implement and perhaps cheaper, I do not believe that we can achieve the same performance and quality as that which we gain by using a typical wired network. I've always thought that wireless networks do have their place in the appropriate settings; however, I still think that a wired network need to be in place at the very minimum as the backbone network.

Does anyone perhaps have or know of where to find any monetary figures or statistics on the costs of building a wired network versus a wireless network, for wan-type purposes? If a wireless network is cheaper to construct, then perhaps we could just overbuild them, and then if they were destroyed, they are still easier to reconstruct than a wired network.

Martin Weiss said...

Your assumptions about WLANs are certainly true. In general "quality" (however we might define it) is easier to control in wireline networks.

I don't know of any cost comparisons of wireless vs. wireline networks off of the top of my head. I am sure they exist ... I'll keep my eye open for them.

Mohamed said...

I think wireline companies will still operate because of the demand for leased circuits. The advantage they have over wireless is that their networks are already setup and wireline give better reliability than wireless.

Wireless service can play an important role in quickly setting up service in areas affected by disasters e.g. Katrina. In this situation when the wireline infrastructure is destroyed, wireless offers the only means of communication.

My thinking is that in the area of voice communication, one strategy that can be used is on pricing vis a vis the celullar service.

VoIP is still grappling with issues but it has the potential of also impacting wireline companies.