Thursday, November 29, 2007

700 MHz Build-out: New Entrants vs Incumbents

Wired Blog Network's Epicenter has a very interesting comparison of the build-out by new entrants versus existing telecom organizations, should they win the 700 MHz spectrum auction. Four important aspects are compared - deployment approach, technology choice, business model and time to market.

Most interestingly, this comparison is not based on the 'philosophical positions on open vs. closed networks" of the new entrants and the incumbents. The comparison is rather based on practical considerations such as constraints of legacy sites and systems, existing core business, and the attention split between current operations and the new spectrum usage. This leads to some interesting conclusions.

For example, most people think that if an incumbent telecom company wins the 700 MHz spectrum auction, it would make this spectrum available to the end-users much faster than a new entrant. The reasoning is that the incumbent already has the necessary infrastructure in place, where as the new entrant would take years to build such infrastructure. The Epicenter article argues that the opposite might be true. A new entrant's revenue is dependent on rapidly delivering the new spectrum to end-users and so, there is more motivation to move quickly. Where as, an incumbent's time and attention is split with the "revenue-generating" existing operations, which could slow things down. Worse, the incumbent might deliberately slow things to avoid impact to the existing "core business".

One thing is for sure: this comparison gives us reasons to wish even more strongly that at least a part of the 700 MHz spectrum being auctioned off is won by a new entrant, such as Google.

[via >> Epicenter]

Related: Will Google do an Android with the 700 MHz Spectrum?

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