Finally, living up to my promise
I am going to talk about cricket. My beloved Australian cricket team today managed an extraordinary win over Pakistan in the United Arab Emirates. (They are playing in the United Arab Emirates because the Australians presently consider Pakistan too dangerous to visit. There is a world class cricket stadium in the UAE because one of the local Emirs developed a liking for the game while at Oxford). Pakistan have been playing international cricket for more than 50 years, and have played a total of 287 test matches in that time.
In test cricket, each team plays two innings, so each of the eleven men on each side bats twice. Yesterday, on the first day of this present match, Pakistan scored their lowest ever score in those 287 matches: their eleven players scored 59 runs between them. Today, in their second innings of the same match, they broke the same record again, scoring only 53. Normally, five days are scheduled for a test match, but a match can take fewer if a side is beaten in a shorter period. Australia beat Pakistan in two days: only the second time this has happened in well over 1000 matches played since 1946, and only the 17th time it has happened since international cricket started in 1877. This was truly a monstrous thrashing.
Saturday, October 12, 2002
People I like to read
I have added some links to the bar on the left. These are just places I like to look at most days. Many of them are blogs, some are not. I've also added my amazon wish list, not because I expect anyone to buy me anything, but because it gives a good picture of my tastes and interests.
I have added some links to the bar on the left. These are just places I like to look at most days. Many of them are blogs, some are not. I've also added my amazon wish list, not because I expect anyone to buy me anything, but because it gives a good picture of my tastes and interests.
Thomas Telford's great maybe
This is London Bridge . And for a bridge that has nursery rhymes about it, it is dazzlingly unimpressive. The area on the South Bank of the Thames around London Bridge is a fun place to walk however: it is full or narrow lanes, the remnants of docks, and markets that these days contain stalls that sell posh claret to rich people who live and walk nearby, nowadays, but it still has atmosphere. (These market stalls are under big signs saying "Turnips" and the like, however, so I imagine this was originally an agricultural market for produce that had just been unloaded from ships at nearby docks. I can imagine attempting to buy cucumbers there for ready money a century ago).
Of course, the nursery rhymes are about the original Medieval bridge (c 1600) of 19 piers, which did a substantial job of blocking the flow of the river. It was solid, but in danger of falling down in high waters. However, this bridge was the limit of navigability of the river, which is why it is the furthest upstream that you find the remnants of docks. When the medieval bridge was replaced with New London Bridge in 1831, the river could flow freely further upstream. This was both good and bad. Bad in the sense that bridges upstream were not designed for the tides, and many had to be replaced over the next few years. New London Bridge was not especially well designed, and was replaced with the present ugly structure in 1973.
The great "what if" in all this was that engineer Thomas Telford proposed a replacement for the original bridge in 1801, which would have been a single 200 metre cast iron span across the Thames. This would have been structurally sound and utterly beautiful, and would still easily do the job today. It was not built due to what seems to have been a mixture of conservatism and reluctance to spend money and effort on building the approaches. It's one of the great unbuilt projects of engineering history. (Sadly, I cannot find a picture).
This is London Bridge . And for a bridge that has nursery rhymes about it, it is dazzlingly unimpressive. The area on the South Bank of the Thames around London Bridge is a fun place to walk however: it is full or narrow lanes, the remnants of docks, and markets that these days contain stalls that sell posh claret to rich people who live and walk nearby, nowadays, but it still has atmosphere. (These market stalls are under big signs saying "Turnips" and the like, however, so I imagine this was originally an agricultural market for produce that had just been unloaded from ships at nearby docks. I can imagine attempting to buy cucumbers there for ready money a century ago).
Of course, the nursery rhymes are about the original Medieval bridge (c 1600) of 19 piers, which did a substantial job of blocking the flow of the river. It was solid, but in danger of falling down in high waters. However, this bridge was the limit of navigability of the river, which is why it is the furthest upstream that you find the remnants of docks. When the medieval bridge was replaced with New London Bridge in 1831, the river could flow freely further upstream. This was both good and bad. Bad in the sense that bridges upstream were not designed for the tides, and many had to be replaced over the next few years. New London Bridge was not especially well designed, and was replaced with the present ugly structure in 1973.
The great "what if" in all this was that engineer Thomas Telford proposed a replacement for the original bridge in 1801, which would have been a single 200 metre cast iron span across the Thames. This would have been structurally sound and utterly beautiful, and would still easily do the job today. It was not built due to what seems to have been a mixture of conservatism and reluctance to spend money and effort on building the approaches. It's one of the great unbuilt projects of engineering history. (Sadly, I cannot find a picture).
Nobel science prizes and credibility
As someone who is at least trained as a scientist, I have always tended to see the Nobel Prizes from the physical scientist's point of view: the prizes in Physics, Chemistry and Medicine and Physiology are a big deal: Peace, Literature and Economics are a little suspect. The principal reason that the three science prizes are held in such high regard by scientists is that the selection committees over the years have done a terrific job. Nobel prizes have been consistently given to the right people. (The physics prize is the only one I am really qualified to comment on, and this year's is certainly once again an excellent choice. People who use enormous underground reservoirs of detergent to do groundbreaking research into the fundamental interactions of the universe deserve to be rewarded for it). There is perhaps a problem with categories: the most groundbreaking of research these days is done in things like biology and computing science, and this was not the case when Nobel created the prizes, but the prizes have generally managed to cope with this. The medicine and physiology prize has been essentially treated as the "Nobel Prize for Biology" for 50 years now, and in recent years (including this year) the chemistry prize has been used to reward biological discoveries as well. There have been one or two instances of the physics prize being awarded to computing related subjects (Brian Josephson for instance) although it has not happened in a major way. (Josephson is Cambridge's equivalent of John Nash: an utterly brilliant man who isn't all that stable, sadly). If there was a Nobel Prize for Mathematics, Computing could perhaps fit into this. However, there isn't, and founding a computing Nobel the way an Economics Nobel was founded would be a fine thing. I can't imagine it would be too hard to find organisations that would put up the money, even in these post tech bubble days.
As someone who is at least trained as a scientist, I have always tended to see the Nobel Prizes from the physical scientist's point of view: the prizes in Physics, Chemistry and Medicine and Physiology are a big deal: Peace, Literature and Economics are a little suspect. The principal reason that the three science prizes are held in such high regard by scientists is that the selection committees over the years have done a terrific job. Nobel prizes have been consistently given to the right people. (The physics prize is the only one I am really qualified to comment on, and this year's is certainly once again an excellent choice. People who use enormous underground reservoirs of detergent to do groundbreaking research into the fundamental interactions of the universe deserve to be rewarded for it). There is perhaps a problem with categories: the most groundbreaking of research these days is done in things like biology and computing science, and this was not the case when Nobel created the prizes, but the prizes have generally managed to cope with this. The medicine and physiology prize has been essentially treated as the "Nobel Prize for Biology" for 50 years now, and in recent years (including this year) the chemistry prize has been used to reward biological discoveries as well. There have been one or two instances of the physics prize being awarded to computing related subjects (Brian Josephson for instance) although it has not happened in a major way. (Josephson is Cambridge's equivalent of John Nash: an utterly brilliant man who isn't all that stable, sadly). If there was a Nobel Prize for Mathematics, Computing could perhaps fit into this. However, there isn't, and founding a computing Nobel the way an Economics Nobel was founded would be a fine thing. I can't imagine it would be too hard to find organisations that would put up the money, even in these post tech bubble days.
Friday, October 11, 2002
How does one get on the Nobel Peace Prize committee, anyway?
The almighty Professor Reynolds comments on the Nobel Peace Prize award. Given just how utterly depressing the events of the last year and a bit have been, my preference would have been simply to not award it this year. There is plenty of precedent for this. However, they have given it to Jimmy Carter, which is a deliberate statement of disapproval of the actions of the present American administration. I don't really mind Jimmy Carter, and I am not a huge fan of President Bush. Seriously, however, there is a large hole in lower Manhattan, and 3000 people were murdered by fanatics who want to take us back to the ninth century. Do the Nobel committee really expect the Americans to do nothing and say "I feel your pain" in return. Personally I am rather glad that the Americans are really determined to wipe these fanatics out.
But that wasn't what I was intending to write about. The good professor had the following to say
Although Dr Clarke is a personal hero of mine, I had never thought of him in the context of a Nobel Peace Prize. But when I think about it, Prof Reynolds is right. With his vision of an interconnected world, Clarke was one of the ealiest prophets of communications technology and globalisation as a way of reducing the marginalisation of much of the poor world. He has done a lot to encourage it to happen. And it has happened. Plus there is a spiritual humanism that comes through in all his work that preaches the utter opposite of the tribal and religious hatreds that we sadly see too much off. Here is someone who looks at the best of what humanity can achieve and asks us to rise to the occasion. Someone who is a professional optimist about humanity, and who is always capable of finding good reasons for being an optimist. This is something we need more than ever. Of course, I doubt the Nobel committee would deign to give such an award to a mere science fiction writer, but that is their loss. (The British government waited a scandalously long time before giving Clarke his much deserved knighthood, too. Here is the same snobbery again).
Maybe I have given a few too many platitudes without enough concrete examples. It is hard to put in words just why I think Clarke is such a great man, and such a significant man. Perhaps I will try again later.
The almighty Professor Reynolds comments on the Nobel Peace Prize award. Given just how utterly depressing the events of the last year and a bit have been, my preference would have been simply to not award it this year. There is plenty of precedent for this. However, they have given it to Jimmy Carter, which is a deliberate statement of disapproval of the actions of the present American administration. I don't really mind Jimmy Carter, and I am not a huge fan of President Bush. Seriously, however, there is a large hole in lower Manhattan, and 3000 people were murdered by fanatics who want to take us back to the ninth century. Do the Nobel committee really expect the Americans to do nothing and say "I feel your pain" in return. Personally I am rather glad that the Americans are really determined to wipe these fanatics out.
But that wasn't what I was intending to write about. The good professor had the following to say
Personally, I think it's just another shameful year in which Arthur C. Clarke's contribution was overlooked.
Although Dr Clarke is a personal hero of mine, I had never thought of him in the context of a Nobel Peace Prize. But when I think about it, Prof Reynolds is right. With his vision of an interconnected world, Clarke was one of the ealiest prophets of communications technology and globalisation as a way of reducing the marginalisation of much of the poor world. He has done a lot to encourage it to happen. And it has happened. Plus there is a spiritual humanism that comes through in all his work that preaches the utter opposite of the tribal and religious hatreds that we sadly see too much off. Here is someone who looks at the best of what humanity can achieve and asks us to rise to the occasion. Someone who is a professional optimist about humanity, and who is always capable of finding good reasons for being an optimist. This is something we need more than ever. Of course, I doubt the Nobel committee would deign to give such an award to a mere science fiction writer, but that is their loss. (The British government waited a scandalously long time before giving Clarke his much deserved knighthood, too. Here is the same snobbery again).
Maybe I have given a few too many platitudes without enough concrete examples. It is hard to put in words just why I think Clarke is such a great man, and such a significant man. Perhaps I will try again later.
Thursday, October 10, 2002
Ridley Scott needs to set a film in this place
There is an interesting piece in The Economist talking about the growth in the Pearl River Estuary region in China into perhaps the world's most important industrial region. We have the great city of Hong Kong, the wild west around Shenzhen, the industrial heartland in the Shenzhen Economic Zone, the gambling den of Macau, all linked together. One thing that is striking about this region is the ferocious development of new infrastructure: railways, bridges, roads, airports, containers ports, everything you care to name. Most western cities built their key infrastructure 100 years ago and have since been tweaking essentially complete systems. In Hong Kong, there are still gaping holes, and devlopment is ferocious. In the rest of the region, even less is there and the pressure to build is even greater.
The article talks about a proposal to built a 39km bridge across the estuary, connecting Hong Kong with Macau and the Special Economic Zone of Zhuhai. This would apparently be something similar to the Sunshine Skyway in Florida. It would be two lengthy causeways, with an island in the middle, and presumably a number of lengthy spans allowing for shipping to go through. This is apparently possible because the estuary isn't deep. Still, we are talking something quite impressive.
One key obstacle, however, is the extraordinary number of political jurisdictions that come into play. Although it is all part of China, we have the Hong Kong and Macau special administrative regions, the Shenzhen and Zhuhai Special Economic Zones, and the Guangdong province proper. To go from any one to any other one of the five you need a passport, so getting all these jurisdictions (plus the central Chinese government) to agree on building such a project is a nightmare. There is a history of all of them building ports, airports and goodness knows what in competition with each other already.
This article suggests setting up something akin to the Port Authority of New Jersey and New York to manage key infrastructure in the region. The original Port Authority was set up for a very similar reason - to have jurisdiction over infrastructure that was important to both states and to prevent constant arguing between them. The Port Authority does this quite successfully, although there are certain other things that this kind of large public sector bureacracy does less well: for instance managing the customer service side of New York's airports.
There is an interesting piece in The Economist talking about the growth in the Pearl River Estuary region in China into perhaps the world's most important industrial region. We have the great city of Hong Kong, the wild west around Shenzhen, the industrial heartland in the Shenzhen Economic Zone, the gambling den of Macau, all linked together. One thing that is striking about this region is the ferocious development of new infrastructure: railways, bridges, roads, airports, containers ports, everything you care to name. Most western cities built their key infrastructure 100 years ago and have since been tweaking essentially complete systems. In Hong Kong, there are still gaping holes, and devlopment is ferocious. In the rest of the region, even less is there and the pressure to build is even greater.
The article talks about a proposal to built a 39km bridge across the estuary, connecting Hong Kong with Macau and the Special Economic Zone of Zhuhai. This would apparently be something similar to the Sunshine Skyway in Florida. It would be two lengthy causeways, with an island in the middle, and presumably a number of lengthy spans allowing for shipping to go through. This is apparently possible because the estuary isn't deep. Still, we are talking something quite impressive.
One key obstacle, however, is the extraordinary number of political jurisdictions that come into play. Although it is all part of China, we have the Hong Kong and Macau special administrative regions, the Shenzhen and Zhuhai Special Economic Zones, and the Guangdong province proper. To go from any one to any other one of the five you need a passport, so getting all these jurisdictions (plus the central Chinese government) to agree on building such a project is a nightmare. There is a history of all of them building ports, airports and goodness knows what in competition with each other already.
This article suggests setting up something akin to the Port Authority of New Jersey and New York to manage key infrastructure in the region. The original Port Authority was set up for a very similar reason - to have jurisdiction over infrastructure that was important to both states and to prevent constant arguing between them. The Port Authority does this quite successfully, although there are certain other things that this kind of large public sector bureacracy does less well: for instance managing the customer service side of New York's airports.
More fun with pictures
The people at The Onion are presumably laughing themselves silly one more time.
This one is "Frank Gehry No Longer Allowed To Make Sandwiches For Grandkids". Okay.
The people at The Onion are presumably laughing themselves silly one more time.
This one is "Frank Gehry No Longer Allowed To Make Sandwiches For Grandkids". Okay.
Wednesday, October 09, 2002
I love bridges
One of the nice things about Brunel's state of the art in 1840 suspension bridge in Bristol is that there are a couple of quite spectacular more modern
bridges quite close nearby. You only have to drive a few kilometers out of town to come to the Severn Estuary, and the two crossings from England into Wales. The recently constructed Second Severn Crossing is rather boring: two long causeways at each end and a single cable stayed span of around 456m in the centre.
Perfectly nice engineering, but cookie cutter stuff. There are lots of other spans just like it. (And the whole system including the approaches is very similar to the older Sunshine Skyway bridge in Florida. The whole trend towards cable stayed bridges, hugely influential as it is, is more an achievement of materials science than civil engineering. (I am enormously interested in materials science, but I am trying to write about bridges).
The older (1966) First Severn Crossing, is much more interesting, however. It is a particularly beautiful bridge, without question, but it is also historically quite memorable. There is a nice picture of it here.
Throughout the 18th and early 19th centuries, suspension bridge design advanced, and as it did so, engineers became more and more confident of their abilities to build bridges with steadily more flexible and thinner decks. If you look at bridges built over the years, the decks suddenly get thinner.
Eventually, a suspension bridge was built over the Tacoma Narrows, just ouside Seattle in Washington State. It had a very thin deck. Many structures have so called resonant frequencies . If a structure is vibrated at one of these frequencies, the structure starts vibrating in such a way that the oscillation rapidly grows. Once the oscillation starts, the wind continues to amplify the oscillation. It so happened that one of the resonant frequencies of the deck of the Tacoma Narrows Bridge was similar to the frequencies of certain gusts of wind that occurred in the area. Wind blowed onto the bridge, and the bridge shook itself to pieces. (There is some quite famous film footage of this event. If you have ever studied physics or engineering, this has almost certainly been shown to you at some point). Although the bridge could easily withstand the forces exerted on it by traffic running over it, it could not withstand the wind.
The response of engineers to this disaster was to go back to building bridges with reinforced trussed decks. The first few big bridges built after this event have very thick decks, and as years go on, you can see them get thinner as engineers get more confident again.
However, the Severn Crossing was the first bridge built after the Tacoma Narrows disaster with a very thin deck. The engineers who designed it had satisfied themselves that they fully understood what wind could do to the bridge, and they designed an aerodynamic deck that would prevent the wind from causing this to oscillate. The bridge is still there, so one assumes that they did fully understand the problem. Most large bridges built since have similar aerodynamic decks. The big exceptions are bridges built in Japan, which still have large trusses. The Japanese claim that they are being doubly safe, although some people simply suspect that the Japanese construction industry are just looking for ways to build things that cost as much money as possible.
Overbuilding construction projects in Japan. Who would ever think such a thing.
The other sort of oscillation that can cause a bridge to oscillate at its resonant frequencies is human steps. Vehicular traffic is generally no problem, but steps are regular. If a lot of people are crossing a bridge with similar periods between steps, this can cause the bridge to shake alarmingly. (This is why soldiers normally break step when marching across bridges).
As has been happening in most cities on a river, the waterfront in London has in recent years been redeveloped, and various new facilities have in particular been built on the (formerly industrial) south bank of the river Thames. Two of the nicer new developments are the Tate Modern art gallery and Shakespeare's Globe Theatre, which are just opposite the river from St Paul's Cathedral in the City of London. (The Tate Modern gallery is a converted power station, and a remarkable work or architecture, although the art itself is not very interesting. The Tate Britain gallery further upstream and on the other side of the river at Millbank has a much greater collection. If nothing else, however, the creation of Tate Modern did free up more space at Millbank for the Tate's magnificent collection of British art. And I have written about the Globe elsewhere).
The authorities decided that a new pedestrian bridge connecting these facilities to the City was desirable, and a thin, elegant footbridge, known as the Millenium Bridge, was constructed. (Remarkably, this was the first new bridge crossing of the Thames in London for something like 100 years. Existing bridges had been replaced by new bridges, and a number of tunnels had been built, however). The bridge was opened in 2000, and a huge number of people walked over the bridge on its first day. However, the bridge shook alarmingly, and engineers were so worried that the bridge was immediately closed again. It seems that the engineers had not taken resonance into account properly. (They should have, however, as similar problems had occurred with the Auckland Harbour Road Bridge in New Zealand in 1975. It seems though that they did not properly read the literature). The engineers spent two years designing bracing structures that were then attached to the bridge to prevent this problem in the future. The bridge was re-opened, and a lot of people have walked over it since.
One of the nice things about Brunel's state of the art in 1840 suspension bridge in Bristol is that there are a couple of quite spectacular more modern
bridges quite close nearby. You only have to drive a few kilometers out of town to come to the Severn Estuary, and the two crossings from England into Wales. The recently constructed Second Severn Crossing is rather boring: two long causeways at each end and a single cable stayed span of around 456m in the centre.
Perfectly nice engineering, but cookie cutter stuff. There are lots of other spans just like it. (And the whole system including the approaches is very similar to the older Sunshine Skyway bridge in Florida. The whole trend towards cable stayed bridges, hugely influential as it is, is more an achievement of materials science than civil engineering. (I am enormously interested in materials science, but I am trying to write about bridges).
The older (1966) First Severn Crossing, is much more interesting, however. It is a particularly beautiful bridge, without question, but it is also historically quite memorable. There is a nice picture of it here.
Throughout the 18th and early 19th centuries, suspension bridge design advanced, and as it did so, engineers became more and more confident of their abilities to build bridges with steadily more flexible and thinner decks. If you look at bridges built over the years, the decks suddenly get thinner.
Eventually, a suspension bridge was built over the Tacoma Narrows, just ouside Seattle in Washington State. It had a very thin deck. Many structures have so called resonant frequencies . If a structure is vibrated at one of these frequencies, the structure starts vibrating in such a way that the oscillation rapidly grows. Once the oscillation starts, the wind continues to amplify the oscillation. It so happened that one of the resonant frequencies of the deck of the Tacoma Narrows Bridge was similar to the frequencies of certain gusts of wind that occurred in the area. Wind blowed onto the bridge, and the bridge shook itself to pieces. (There is some quite famous film footage of this event. If you have ever studied physics or engineering, this has almost certainly been shown to you at some point). Although the bridge could easily withstand the forces exerted on it by traffic running over it, it could not withstand the wind.
The response of engineers to this disaster was to go back to building bridges with reinforced trussed decks. The first few big bridges built after this event have very thick decks, and as years go on, you can see them get thinner as engineers get more confident again.
However, the Severn Crossing was the first bridge built after the Tacoma Narrows disaster with a very thin deck. The engineers who designed it had satisfied themselves that they fully understood what wind could do to the bridge, and they designed an aerodynamic deck that would prevent the wind from causing this to oscillate. The bridge is still there, so one assumes that they did fully understand the problem. Most large bridges built since have similar aerodynamic decks. The big exceptions are bridges built in Japan, which still have large trusses. The Japanese claim that they are being doubly safe, although some people simply suspect that the Japanese construction industry are just looking for ways to build things that cost as much money as possible.
Overbuilding construction projects in Japan. Who would ever think such a thing.
The other sort of oscillation that can cause a bridge to oscillate at its resonant frequencies is human steps. Vehicular traffic is generally no problem, but steps are regular. If a lot of people are crossing a bridge with similar periods between steps, this can cause the bridge to shake alarmingly. (This is why soldiers normally break step when marching across bridges).
As has been happening in most cities on a river, the waterfront in London has in recent years been redeveloped, and various new facilities have in particular been built on the (formerly industrial) south bank of the river Thames. Two of the nicer new developments are the Tate Modern art gallery and Shakespeare's Globe Theatre, which are just opposite the river from St Paul's Cathedral in the City of London. (The Tate Modern gallery is a converted power station, and a remarkable work or architecture, although the art itself is not very interesting. The Tate Britain gallery further upstream and on the other side of the river at Millbank has a much greater collection. If nothing else, however, the creation of Tate Modern did free up more space at Millbank for the Tate's magnificent collection of British art. And I have written about the Globe elsewhere).
The authorities decided that a new pedestrian bridge connecting these facilities to the City was desirable, and a thin, elegant footbridge, known as the Millenium Bridge, was constructed. (Remarkably, this was the first new bridge crossing of the Thames in London for something like 100 years. Existing bridges had been replaced by new bridges, and a number of tunnels had been built, however). The bridge was opened in 2000, and a huge number of people walked over the bridge on its first day. However, the bridge shook alarmingly, and engineers were so worried that the bridge was immediately closed again. It seems that the engineers had not taken resonance into account properly. (They should have, however, as similar problems had occurred with the Auckland Harbour Road Bridge in New Zealand in 1975. It seems though that they did not properly read the literature). The engineers spent two years designing bracing structures that were then attached to the bridge to prevent this problem in the future. The bridge was re-opened, and a lot of people have walked over it since.
Tuesday, October 08, 2002
How do I make money from this?
Just a brief further comment on my CDMA2000 v UMTS/GSM observations. A key point I was making, which I also made in a Slashdot comment , was that IS-95 CDMA networks are already in place in lots of Asia. The operators that have such networks have generally done badly competing with GSM and are somewhat unfashionable because of this. (Those companies with both IS-95 CDMA networks and GSM networks have generally sold the GSM network hard and neglected the CDMA network). However, these networks can easily be upgraded to CDMA2000. If CDMA2000 applications become a big deal, which appears to be happening in both Japan and Korea, these networks can upgrade extremely quickly and their perceived position could change extremely quickly.
The thing I perhaps didn't emphasise enough is that This is exactly what has happened in Japan over the last six months. NTT DoCoMo has been the long term market leader, with its 2.5G i-mode mobile internet service. KDDI's WAP version 1 service was far less successful and the company was perceived as second best. However, KDDI has updated to CDMA2000, and has added several million users from scratch since March. DoCoMo on the other hand has just got itself burned repeatedly over W-CDMA. The technology shift was quick, because it was IS-95 to CDMA2000. The perception shift was equally quick. I expect to see this shift happen elsewhere as well.
If I was still a stock analyst, I would say that the implications of this change in perception are generally as follows. I think we are on the bring of one of those changes in perception that leads to a major rerating of certain companies. Buy KDDI. Buy Telstra. Buy Telecom NZ. Buy Sprint PCS. Buy China Unicom. Buy anything Korean you can get your hands on that is close to being a pure cellular play. (Both in terms of equipment and networks). And of course buy Qualcomm. Accumulate Lucent and Motorola. Hold Ericsson. Sell AT&T Wireless. Sell NTT DoCoMo. Sell SingTel. Sell Hutchison Whampoa. Sell Nokia. (As for Vodafone, which is the world's largest GSM operator and is a major GSM proponent, but which owns a large stake in the largest IS-95 operator in the US, that one requires a lot of analysis. As does Hutchison Telecom Australia, which is being pulled along by its parent company, but which has a IS-95 network in Australia. If Hutchison was to spin that network off into a separate company, I would be bullish about it. The same is true of Hutchison's IS-95 network in Hong Kong).
.
Just a brief further comment on my CDMA2000 v UMTS/GSM observations. A key point I was making, which I also made in a Slashdot comment , was that IS-95 CDMA networks are already in place in lots of Asia. The operators that have such networks have generally done badly competing with GSM and are somewhat unfashionable because of this. (Those companies with both IS-95 CDMA networks and GSM networks have generally sold the GSM network hard and neglected the CDMA network). However, these networks can easily be upgraded to CDMA2000. If CDMA2000 applications become a big deal, which appears to be happening in both Japan and Korea, these networks can upgrade extremely quickly and their perceived position could change extremely quickly.
The thing I perhaps didn't emphasise enough is that This is exactly what has happened in Japan over the last six months. NTT DoCoMo has been the long term market leader, with its 2.5G i-mode mobile internet service. KDDI's WAP version 1 service was far less successful and the company was perceived as second best. However, KDDI has updated to CDMA2000, and has added several million users from scratch since March. DoCoMo on the other hand has just got itself burned repeatedly over W-CDMA. The technology shift was quick, because it was IS-95 to CDMA2000. The perception shift was equally quick. I expect to see this shift happen elsewhere as well.
If I was still a stock analyst, I would say that the implications of this change in perception are generally as follows. I think we are on the bring of one of those changes in perception that leads to a major rerating of certain companies. Buy KDDI. Buy Telstra. Buy Telecom NZ. Buy Sprint PCS. Buy China Unicom. Buy anything Korean you can get your hands on that is close to being a pure cellular play. (Both in terms of equipment and networks). And of course buy Qualcomm. Accumulate Lucent and Motorola. Hold Ericsson. Sell AT&T Wireless. Sell NTT DoCoMo. Sell SingTel. Sell Hutchison Whampoa. Sell Nokia. (As for Vodafone, which is the world's largest GSM operator and is a major GSM proponent, but which owns a large stake in the largest IS-95 operator in the US, that one requires a lot of analysis. As does Hutchison Telecom Australia, which is being pulled along by its parent company, but which has a IS-95 network in Australia. If Hutchison was to spin that network off into a separate company, I would be bullish about it. The same is true of Hutchison's IS-95 network in Hong Kong).
.
The revolution will be television
Asparagirl is reminiscing about watching the 1997 Mars Pathfinder mission over her high school's T1 link.
I am around ten years older than she is. When I was at high school, the most exciting space mission would have to have been Voyager 2, which got to Uranus in 1986 and Neptune in 1989. To see the photographs that Voyager had take, I could either watch perhaps 30 seconds of footage on evening network news bulletins, compiled by people who really didn't care (Australia had no cable or satellite television in those days, so there was no chance of hoping the Discovery Channel or similar would show something) or look at a blurred black and white photograph in a newspaper. To see a good selection of colour photographs, I had to wait a couple of months for a copy of New Scientist of Scientific American with a photo spread on the subject to arrive in Australia (by sea mail!) from Britain or America.
I was at university in 1989, and I had access to the outside world via Usenet and UUCP based e-mail by that time. (Full internet access between Australia and the outside world was a few months when Voyager got to Neptune). It still didn't really help, as sending pictures over computer networks was not something people did at the time.
(Part of this was that Australia was and to some extent still is a fairly provincial place. However, Australians can not downoad anything they want over the internet from NASA, just like anybody else, not to mention watch the Discovery Channel. (No, Nasa TV, though).
Despite this, this time of post telco-boom post-tech boom depression, it is sometimes easy to forget the extent of the revolution that has occurred in the last decade. It is phenomenal beyond words. In the 1980s, particularly if you were a teenager without much money, information about anything was generally difficult to obtain. Your local (or school) library might contain a book about a subject, but it would often be simplified and/or a decade out of data and/or written by somebody who didn't understand the subject properly. If you wanted to know something about the law, that was what you had to rely on. Today, you can look at the statute directly, and look every judicial case that has ever been concerned with the subject. If you want to know almost any statistic about almost anything, you can get to the source, and get the most accurate and up to date information imaginable. If you don't understand something and are generally interested in the subject, you can get an expert's view on a lot of subjects very quickly. (Just send the expert an e-mail, or ask a question on Usenet, or hang out on the right message boards). I was at my most curious and my most hungry for knowledge when I was about 15, and, quite frankly, I was starved of knowledge about the things I wanted to learn. Today, I wouldn't be. I think I would give almost anything to have had the access to knowledge and information at 15 that is available to anyone who wants it (at least in the rich world) today.
To be truthful, it's available in a reasonable amount of the poor world, too. Go into an internet cafe in a small town in Indonesia or rural Turkey - to name two places I have been in the last year and where I have actually seen it - and almost inevitably it is run by some bright kid, who is the only person in the town capable of setting up such a thing. The bright kid might come from a well off or well educated family, but maybe not. (Even in these kinds of places, or perhaps especially in these kinds of places (I don't really know) being a geek is not that fashionable I suspect). The extent to which some bright kid can nag his or her way into getting access to such a system can really be really quite impressive.
Of course, even in situations like that, access is a long way from being universal: it only goes to a very particular sort of bright kid, who may ultimately discover that he is stuck in the small down in Indonesia even despite knowing a lot. But it is something that very definitely is there, and which wasn't there even a few years ago.
Asparagirl is reminiscing about watching the 1997 Mars Pathfinder mission over her high school's T1 link.
I am around ten years older than she is. When I was at high school, the most exciting space mission would have to have been Voyager 2, which got to Uranus in 1986 and Neptune in 1989. To see the photographs that Voyager had take, I could either watch perhaps 30 seconds of footage on evening network news bulletins, compiled by people who really didn't care (Australia had no cable or satellite television in those days, so there was no chance of hoping the Discovery Channel or similar would show something) or look at a blurred black and white photograph in a newspaper. To see a good selection of colour photographs, I had to wait a couple of months for a copy of New Scientist of Scientific American with a photo spread on the subject to arrive in Australia (by sea mail!) from Britain or America.
I was at university in 1989, and I had access to the outside world via Usenet and UUCP based e-mail by that time. (Full internet access between Australia and the outside world was a few months when Voyager got to Neptune). It still didn't really help, as sending pictures over computer networks was not something people did at the time.
(Part of this was that Australia was and to some extent still is a fairly provincial place. However, Australians can not downoad anything they want over the internet from NASA, just like anybody else, not to mention watch the Discovery Channel. (No, Nasa TV, though).
Despite this, this time of post telco-boom post-tech boom depression, it is sometimes easy to forget the extent of the revolution that has occurred in the last decade. It is phenomenal beyond words. In the 1980s, particularly if you were a teenager without much money, information about anything was generally difficult to obtain. Your local (or school) library might contain a book about a subject, but it would often be simplified and/or a decade out of data and/or written by somebody who didn't understand the subject properly. If you wanted to know something about the law, that was what you had to rely on. Today, you can look at the statute directly, and look every judicial case that has ever been concerned with the subject. If you want to know almost any statistic about almost anything, you can get to the source, and get the most accurate and up to date information imaginable. If you don't understand something and are generally interested in the subject, you can get an expert's view on a lot of subjects very quickly. (Just send the expert an e-mail, or ask a question on Usenet, or hang out on the right message boards). I was at my most curious and my most hungry for knowledge when I was about 15, and, quite frankly, I was starved of knowledge about the things I wanted to learn. Today, I wouldn't be. I think I would give almost anything to have had the access to knowledge and information at 15 that is available to anyone who wants it (at least in the rich world) today.
To be truthful, it's available in a reasonable amount of the poor world, too. Go into an internet cafe in a small town in Indonesia or rural Turkey - to name two places I have been in the last year and where I have actually seen it - and almost inevitably it is run by some bright kid, who is the only person in the town capable of setting up such a thing. The bright kid might come from a well off or well educated family, but maybe not. (Even in these kinds of places, or perhaps especially in these kinds of places (I don't really know) being a geek is not that fashionable I suspect). The extent to which some bright kid can nag his or her way into getting access to such a system can really be really quite impressive.
Of course, even in situations like that, access is a long way from being universal: it only goes to a very particular sort of bright kid, who may ultimately discover that he is stuck in the small down in Indonesia even despite knowing a lot. But it is something that very definitely is there, and which wasn't there even a few years ago.
Monday, October 07, 2002
A Tenth Planet
This discovery is unbelievably cool. I have heard a little bit recently about the likelihood of there being objects of Pluto's scale in the Kuiper Belt. Although this is a little smaller than Pluto, you really have to say that if Pluto is a planet, so is this. And if this isn't, neither is Pluto. (Some people in recent years have been trying to argue that Pluto is not really a planet, but I doubt you will ever get the majority of people to let go of the idea that it is). Either way, the picture of the solar system we have had since 1930 - nine planets - now has to go. Psychologically, for me at least, this is a big deal. It's actually much less important than the discovery of the many planets orbiting other stars which we have seen over the last couple of decades, but this is so much closer to home.
This discovery is unbelievably cool. I have heard a little bit recently about the likelihood of there being objects of Pluto's scale in the Kuiper Belt. Although this is a little smaller than Pluto, you really have to say that if Pluto is a planet, so is this. And if this isn't, neither is Pluto. (Some people in recent years have been trying to argue that Pluto is not really a planet, but I doubt you will ever get the majority of people to let go of the idea that it is). Either way, the picture of the solar system we have had since 1930 - nine planets - now has to go. Psychologically, for me at least, this is a big deal. It's actually much less important than the discovery of the many planets orbiting other stars which we have seen over the last couple of decades, but this is so much closer to home.
Good Walkies, Grommit?
Andrea See is talking about the pleasant experience of watching Chicken Run outdoors under the stars.
My favourite line out of that movie is I think "Good Heavens No. I'm a chicken".
I went to Bristol, home of Aardman Animation, a month or so back. It's a really nice city. (Sea ports or former sea ports often have a very nice, cosmopolitan feel about them. The town is also helped by having an extremely good university).
Between Bristol and the Severn Estuary, the River Avon goes through an immense gorge, and over this gorge goes the extremely famous Clifton Suspension Bridge , built Isambard Kingdom Brunel, the great Victorian engineer. At the Bristol end of the bridge is the suburb of Clifton, full of nice houses, shops and stuff. The people of Bristol, unlike the English in general, seem to take great pride in the great works of engineering in the town). I sat in a pub named "The Brunel" and had a very pleasant meal and a couple of pints of ale. But I digress.
Clifton does, as I said, contain nice houses, and I got the impression this is one of the posher parts of Bristol to live in. Near the end of the bridge, I walked into a perfectly ordinary English newsagency: the sort of place that is in a small shop, and that sells newspapers, a few magazines, a few groceries, which has an immense array of chocolate bars to choose from, and contains a fridge containing drinks, and a few things to eat, the featured item of which is almost always sweet corn and tuna sandwhiches.
Such newsagents seldom have a great selection of magazines. The local one near where I live in Croydon doesn't even stock the Economist. In any event, this newsagent stocked both The Hollywood Reporter and Variety. From this, I deduced that some rich film-making types lived nearby. Who could tell? Perhaps the guy in front of me buying the Guardian was in fact one of the directors of Chicken Run.
Andrea See is talking about the pleasant experience of watching Chicken Run outdoors under the stars.
My favourite line out of that movie is I think "Good Heavens No. I'm a chicken".
I went to Bristol, home of Aardman Animation, a month or so back. It's a really nice city. (Sea ports or former sea ports often have a very nice, cosmopolitan feel about them. The town is also helped by having an extremely good university).
Between Bristol and the Severn Estuary, the River Avon goes through an immense gorge, and over this gorge goes the extremely famous Clifton Suspension Bridge , built Isambard Kingdom Brunel, the great Victorian engineer. At the Bristol end of the bridge is the suburb of Clifton, full of nice houses, shops and stuff. The people of Bristol, unlike the English in general, seem to take great pride in the great works of engineering in the town). I sat in a pub named "The Brunel" and had a very pleasant meal and a couple of pints of ale. But I digress.
Clifton does, as I said, contain nice houses, and I got the impression this is one of the posher parts of Bristol to live in. Near the end of the bridge, I walked into a perfectly ordinary English newsagency: the sort of place that is in a small shop, and that sells newspapers, a few magazines, a few groceries, which has an immense array of chocolate bars to choose from, and contains a fridge containing drinks, and a few things to eat, the featured item of which is almost always sweet corn and tuna sandwhiches.
Such newsagents seldom have a great selection of magazines. The local one near where I live in Croydon doesn't even stock the Economist. In any event, this newsagent stocked both The Hollywood Reporter and Variety. From this, I deduced that some rich film-making types lived nearby. Who could tell? Perhaps the guy in front of me buying the Guardian was in fact one of the directors of Chicken Run.
More dot com fallout
Imagine my horror this morning when I typed www.aldaily.com into my browser this morning and discovered that Arts and Letters Daily was gone, as a consequence of the bankruptcy of Lingua Franca. As someone who still misses Feed, I spent sixty seconds contemplating the horror, before following one of the links to http://www.philosophyandliterature.com which appears to be Arts and Letters Daily under another name. It seems that the actual site www.aldaily.com has to be auctioned with Lingua Franca's other assets and that therefore Denis Dutton cannot use it any more, so he has moved. On the new site, he says
Possiby this means he will try to get the Arts and Letters Daily name, URL, and most importantly the archive back in the auction. One of the worst things of the bankruptcy of online pulications can be the loss of years of interesting material. For now we seem to have lost the A&L Daily archive. This is bad. I'll be hopeful, as I wouldn't think the site is worth anything without Mr Dutton.
Imagine my horror this morning when I typed www.aldaily.com into my browser this morning and discovered that Arts and Letters Daily was gone, as a consequence of the bankruptcy of Lingua Franca. As someone who still misses Feed, I spent sixty seconds contemplating the horror, before following one of the links to http://www.philosophyandliterature.com which appears to be Arts and Letters Daily under another name. It seems that the actual site www.aldaily.com has to be auctioned with Lingua Franca's other assets and that therefore Denis Dutton cannot use it any more, so he has moved. On the new site, he says
Welcome to our new site, which we will be operating for the benefit of readers at least until the final disposition of Arts & Letters Daily.
Possiby this means he will try to get the Arts and Letters Daily name, URL, and most importantly the archive back in the auction. One of the worst things of the bankruptcy of online pulications can be the loss of years of interesting material. For now we seem to have lost the A&L Daily archive. This is bad. I'll be hopeful, as I wouldn't think the site is worth anything without Mr Dutton.
Sunday, October 06, 2002
An odd thought
I went to a fifteen year reunion a couple of years ago at the high school I attended in Australia. I had spent most of the preceding ten years outside Australia, and I was consequently a little hard to contact. However, I heard about the event from a friend and showed up unannounced on the evening. One of the organisers told me that they were pleased I had come, and named one other person who they had also been unable to contact.
What is interesting is that the other "difficult to contact" person and I are the only two members of the class who appear first in a Google search for our names. So much for being difficult to contact. (Also, we were both widely assumed to be gay by our classmates, simply because we weren't the greatest conformists in the school. Neither of us actually are).
I went to a fifteen year reunion a couple of years ago at the high school I attended in Australia. I had spent most of the preceding ten years outside Australia, and I was consequently a little hard to contact. However, I heard about the event from a friend and showed up unannounced on the evening. One of the organisers told me that they were pleased I had come, and named one other person who they had also been unable to contact.
What is interesting is that the other "difficult to contact" person and I are the only two members of the class who appear first in a Google search for our names. So much for being difficult to contact. (Also, we were both widely assumed to be gay by our classmates, simply because we weren't the greatest conformists in the school. Neither of us actually are).
So what is CDMA2000, anyway?
Steven Den Beste of USS Clueless has a piece on developments in the various 3G mobile phone standards - in particular how the American standard CDMA2000 seems to be winning over the European W-CDMA/UMTS. This is a follow up to this Economist article, and is an interest of mine as well. I wrote Steven a ludicrously long e-mail reply, which I think I might as well post here as well.
Steven,
It was interesting to read your piece on CDMA2000. In my former job as a telecommunications analyst at CSFB in Australia, I also listened to a lot self-righteous patronising crap from GSM proponents, and I am feeling a little schadenfreude myself. I wrote a whole lot of reports a couple of years ago stating that I didn't believe that W-CDMA would work any time soon, and that IS-95 networks could be easily upgraded, and that therefore these networks were potentially very valuable assets, but it nobody much paid any attention at the time.(Of course, I lost my job in a massive downsizing, so in a way it barely matters, but I do now feel somewhat better....).
In Australia, we have a mixture of GSM and CDMA (IS-95) networks. At this point the GSM networks have most of the customers, largely I think due to Nokia's marketing skills. At the height of the boom, even the companies that owned the CDMA networks announced the intention of buiding W-CDMA networks and purchased 2.1GHz spectrum (admittedly fairly cheaply) in order to do so. The success of GSM in Europe, Asia, and Africa was such that everyone paid attention to its proponents, and paid little attention to anyone else. (Everyone particularly paid attention to Nokia). The lesson they took seemed to be that because GSM was so successful the people behind it were omniscient. IS-95 might have been the better technology, but networks that had adopted it in the past had lost out to those that had adopted GSM because everyone else had adopted GSM, and that UMTS/W-CDMA was the 'upgrade path' from GSM. Clearly everyone was going to adopt W-CDMA, so therefore we should do this too, and you couldn't even get people to talk about CDMA2000. a colleague of mine spoke to the CEO of a company (Telstra) that owned a IS-95 netowork, and he knew little about CDMA2000 whereas he had swallowed all of the hype about UMTS. His company is now becoming quite enthusiastic about CDMA2000.
Now the perception has collapsed, and people are looking at the actual technology again. This is great, as it means the of the telco/tech boom has now gone.
The whole story of what happened in Australia is quite interesting, so here goes. I have also posted this on my blog. (http://michaeljennings.blogspot.com)
(Bear in mind that I am not an engineer, although I do have a Ph.D. in applied mathematics. I am something of an engineer wannabe, however.)
In the analogue days in Australia there was a single AMPS network on 800MHz that belonged to then government owned then monopoly Telecom Australia (now Telstra). In the early 1990s the government decided to upgrade to a digital technology. Three licences were sold for 900MHz GSM spectrum. Telstra was compelled by law to upgrade to GSM, and to phase out and switch off its AMPS network by 2000. This seems to have been because the government thought that it wouldn't get a good price for the second and third GSM licences if the new players had to take on an entrenched monopoly, and forcing Telstra to shut down its AMPS network weakened that monopoly. Telstra was not permitted to upgrade its network to IS-136, as it would have liked to have done. (This happened in New Zealand, where Telecom NZ upgraded from AMPS to IS-136 and eventually built an IS-95 network alongside its IS-136 network). Three companies: Telstra; Optus (then owned by C&W, now owned by Singapore Telecom); and Vodafone set up GSM networks. The government announced that the reason for the switch off was to make the 800MHz spectrum available for newer technology, and it would be auctioned when available.
When the GSM networks went into operation, it became clear that GSM is a lousy technology for places like Australia, because Australia is enormous, and very sparsely populated. GSM works fine in densely populated Europe where base stations are close together, but it works very badly in situations where large cells are called for. (My understanding is that it fails when the time it takes for a signal to go from the base-station to the handset becomes comparable with the length of a timeslot, so it's a TDMA thing in general I guess). The fact that the AMPS network, which worked well with large cells in rural areas, was being switched off and replaced with GSM (which didn't work) enraged voters in rural areas, who had become used to having mobile phones.
Like rural voters everywhere, rural voters in Australia are upset about a lot of things. (which largely come back to the fact that agriculture is not a way to get rich in the modern world, whereas it was a century ago, and the importance of rural Australia to the country has been in decline for at least that long, but I digress). Rural voters are a political problem for the conservative government that has been in power since 1996 in particular, because rural voters have recently been flirting with parties of the far right instead of the traditional rural conservative party. In any event, in this case rural people really did have a point. The government therefore felt it needed to do something quickly.
The auction of the 800MHz spectrum took place, Telstra gained a licence and was encouraged (and subsidised) to build a national IS-95 network as quickly as it could. (Hutchison Telecom also purchased 800MHz spectrum, and built a second IS-95 network in the large cities, and signed a roaming agreement for its customers to use Telstra's network out of the cities). This solved the rural voter problem quite effectively, as IS-95 works fine with large cells. (Has this issue come up in the US? Surely it must have). Therefore, what we ended up with in Australia was a situation where Australia had two solely GSM operators, one solely IS-95 operator, and one operator (Telstra) that owned networks of both kinds.
What then happened was that the three GSM operators gained something more than 90% market share between them. Although Telstra caters to customers in rural areas if it has to, its profitability lies in customers in the large cities, as this is where the majority of the population lives, and the urban population is much richer. City people might like to pretend that they leave the city to experience the great Australian outback regularly but in actual fact they don't. Therefore, it doesn't matter to most of them that GSM phones do not work outside the cities. For the best customers, international roaming is probably more important, and this does work extremely well for GSM, and it is an issue on which the CDMA world has never seemed to have got its act together. For whatever reason, CDMA lost out badly in Australia.
I think the biggest reason behind this is simply that, for some reason, mobile phones turned into fashion accessories. People are very conscious of their brand and appearance, and it is very important to have a 'cool' . (I think this is even more the case in Europe and Asia than in the US). Cell phones almost became like watches. A $1000 watch probably doesn't tell the time any better than a $20 watch, but people are willing to pay the difference in order to have the right watch. The $20 watch may well have more features than the $1000 watch, but this doesn't matter, as the only features on their watch that most people ever use are the time and date. Nokia were first to understand that phones were like this too. (The Nokia 8210 is easily the most successful phone in recent years in Europe and Australia, but in terms of functionality, it is quite backwards. It can be used for phone calls and SMS messages and that is about it). The features that Nokia added were lifestyle features such as changeable ringtones, games, and the ability to change the casing of the phone to change its colour. Plus they concentrated their advertising on these lifestyle features. What they did was create a situation where if you are a high school student, it is social death to have a mobile phone that is not a Nokia. If you are a single woman, then the tiny little phone that goes in your handbag has to be a Nokia. Nokia have never struck me as having great engineering - Ericsson and Motorola seem to get new (technical) features onto the market much faster - but Nokia are great at creating demand for their phones. Despite having seemingly excellent engineering, Ericsson have produced phones that are ugly, and that has cost them. Motorola's phones are packed with features - my own phone is a Motorola for this reason - but they are less attractive and are weaker on the lifestyle front than are Nokia's. (Motorola have improved their game a lot in the last couple of years, however).
And in markets such as Australia, Nokia does not sell CDMA phones. Yes, they produce them for the American market, but in markets such as Australia and New Zealand, they do not sell them. When asked about this, they say that they prefer to concentrate their efforts on the GSM market. If you want to buy a CDMA phone, it will generally be made by a South Korean company - Samsung or LG or Hyundai. And while these companies make decent products, they are deeply unfashionable: they are brandnames associated with cheap cars and cheap televisions. People do not want this for a mobile phone. So they have lost out. GSM has the high prestige brands associated with it, and it has gained the reputation for a quality product, even though it is technically worse. (It seems foolish to me for Nokia to decide which of its products its customers want for them rather than letting them do this, but that's its strategy).
In Australia, Telstra responded to this customer preference by seeing its CDMA network as part of its universal service obligation and only really promoting it in rural areas, devoting most of its marketing effort to GSM, and Hutchison has simply tried to compete on price. (Its calls are cheaper than anyone else's).
In New Zealand, Telecom NZ have sold IS-136 and later IS-95, and have lost out in a similar way, although not as badly. Their only competitor, Vodafone, uses GSM, and Vodafone have done a far better job of marketing their service, at least partly by selling GSM as the world leading technology.
In 2000, vast sums had been paid in Europe for the 2.1GHz UMTS spectrum, and a similar auction was held in Australia. (They auctioned the 2.1GHz UMTS spectrum bands, but did not specify a technology). However, there were about the same number of licences as applicants in Australia, so the licences went cheaply. Telstra, Optus, Vodafone, Hutchison and Qualcomm all purchased 3G licences. Optus (who have 'vendor financing' from Nokia) and Hutchison (who have a global parent that intends to roll out UMTS networks around Europe) announced they would build UMTS networks quickly. Telstra and Vodafone said they would build UMTS with less urgency, and Qualcomm announced that it would build a network using 2.1GHz CDMA2000 and resell the capacity. The extraordinary thing is how amazingly detached the rhetoric was from reality at the time: Nobody had any idea what 3G was or was supposed to do, but they had already decided that UMTS was going to be the winner. Plus they had no idea of the value of the assets that they already owned. At the time, Telstra was fully talking the UMTS line, but in the two years since, their tone has changed a lot. They seem to have woken up to the fact that their IS-95 network is an asset, and it seems to be clear they will launch a 1x service before long. (Telecom NZ has already done so).
(There were lots of theories as to what Qualcomm was doing - my theory was that they wanted to adapt and demonstate their CDMA2000 equipment for the 2.1GHz bands that were being auctioned throughout the world by regulatory authorities who thought that UMTS would prevail put didn't feel the regulatory need to specify a technology, probably with China in particular in mind. Qualcomm have been quiet on this lately, which may suggest that capital is too expensive these days for demonstrations like this. If they were thinking about China, it may be unnecessary anyway, as China Unicom has a (quite new, probably 1X capable out of the box) IS-95 network in pace already).
I suppose the lesson to be learned from this is the same one that you are making, which is that it's a bad idea to try to pick winners. Australia, NZ, and a lot of Asia has IS-95 networks in place, even if these networks do not have huge market shares at the moment. If camera phone type applications become a big deal, as they appear to have done in Japan and Korea, then it will be very easy for these networks to be upgraded to CDMA2000/3G, and you will see an amazingly quick shift in the fortunes of the two technologies, as the infrastructure is already sitting there in most of Asia to allow this to happen. (There was an IS-95 network in Singapore that was switched off because it didn't have many customers. I wonder if they can switch it on again. Actually I doubt it as it was operating on 1900MHz and I think the spectrum was reallocated to allow overlapping 1800MHz GSM). If some companies get a big advantage from this, there will be pressure for competitors to upgrade too. This may lead to widespread 2.1GHz CDMA2000, as this is where the free spectrum is.
Actually, I think the shift in perception as to which is the successful technology has just happened. I think CDMA2000 has just won, and this will be common wisdom within six months. This leaves Sprint and Verizon in the box seat in the US. Asia is in a good position to adopt the technology because there is enough IS-95 in place to allow a fairly easy transition, but Europe is completely screwed, as it has committed itself to a technology that doesn't work, and it cannot fix this until very slow moving bureacrats change the rules. Plus there is so much bad money already invested that they will no doubt continue throwing good money after it for a while.
Just as a matter of interest, there is one interesting regulatory loophole in Europe for people who want to build CDMA2000 networks. The EC/EU only got involved in the spectrum allocation business for GSM, and prior to that allocation of spectrum for analogue services was a matter for national jurisdiction. (The resulting mass of incompatible analogue systems was one reason other than protectionism that we got a single European standard and a single European set of spectrum allocations for GSM) A lot of European governments allocated 450MHz spectrum for analogue services, and in a lot of cases this is still allocated and still subject to national rather than European jurisdiction. (This spectrum is also available in Russia and one or two places in Asia). In most cases it is at least theoretically legal for the owners of such spectrum to build CDMA2000 networks in this allocation. I know that Qualcomm have been working on developing hardware to work at this frequency, and there is also a variant of GSM designed for it. I don't know if anyone has the guts to take a gamble on building such networks in Europe, or if bureacracy would get in the way. (I think it might). At least in theory, however, it is a possibility.
I have spent the last nine months writing a book on digital television, and the European proponents of the DVB digital television standard sound exactly like GSM people. (Actually they are in many instances the same people, so this is perhaps not surprising). We will see what happens with this technology, too.
Update I have added a few more comments on this, including observations on what my related stock recomendations might be. I have also written another piece discussing the reasons as to why Europe's mobile phone market is now as schlerotic as it is.
Further update I am presently looking for a job. If anyone reading this page things they might know someone who would be interested in employing me, look here .
Steven Den Beste of USS Clueless has a piece on developments in the various 3G mobile phone standards - in particular how the American standard CDMA2000 seems to be winning over the European W-CDMA/UMTS. This is a follow up to this Economist article, and is an interest of mine as well. I wrote Steven a ludicrously long e-mail reply, which I think I might as well post here as well.
Steven,
It was interesting to read your piece on CDMA2000. In my former job as a telecommunications analyst at CSFB in Australia, I also listened to a lot self-righteous patronising crap from GSM proponents, and I am feeling a little schadenfreude myself. I wrote a whole lot of reports a couple of years ago stating that I didn't believe that W-CDMA would work any time soon, and that IS-95 networks could be easily upgraded, and that therefore these networks were potentially very valuable assets, but it nobody much paid any attention at the time.(Of course, I lost my job in a massive downsizing, so in a way it barely matters, but I do now feel somewhat better....).
In Australia, we have a mixture of GSM and CDMA (IS-95) networks. At this point the GSM networks have most of the customers, largely I think due to Nokia's marketing skills. At the height of the boom, even the companies that owned the CDMA networks announced the intention of buiding W-CDMA networks and purchased 2.1GHz spectrum (admittedly fairly cheaply) in order to do so. The success of GSM in Europe, Asia, and Africa was such that everyone paid attention to its proponents, and paid little attention to anyone else. (Everyone particularly paid attention to Nokia). The lesson they took seemed to be that because GSM was so successful the people behind it were omniscient. IS-95 might have been the better technology, but networks that had adopted it in the past had lost out to those that had adopted GSM because everyone else had adopted GSM, and that UMTS/W-CDMA was the 'upgrade path' from GSM. Clearly everyone was going to adopt W-CDMA, so therefore we should do this too, and you couldn't even get people to talk about CDMA2000. a colleague of mine spoke to the CEO of a company (Telstra) that owned a IS-95 netowork, and he knew little about CDMA2000 whereas he had swallowed all of the hype about UMTS. His company is now becoming quite enthusiastic about CDMA2000.
Now the perception has collapsed, and people are looking at the actual technology again. This is great, as it means the of the telco/tech boom has now gone.
The whole story of what happened in Australia is quite interesting, so here goes. I have also posted this on my blog. (http://michaeljennings.blogspot.com)
(Bear in mind that I am not an engineer, although I do have a Ph.D. in applied mathematics. I am something of an engineer wannabe, however.)
In the analogue days in Australia there was a single AMPS network on 800MHz that belonged to then government owned then monopoly Telecom Australia (now Telstra). In the early 1990s the government decided to upgrade to a digital technology. Three licences were sold for 900MHz GSM spectrum. Telstra was compelled by law to upgrade to GSM, and to phase out and switch off its AMPS network by 2000. This seems to have been because the government thought that it wouldn't get a good price for the second and third GSM licences if the new players had to take on an entrenched monopoly, and forcing Telstra to shut down its AMPS network weakened that monopoly. Telstra was not permitted to upgrade its network to IS-136, as it would have liked to have done. (This happened in New Zealand, where Telecom NZ upgraded from AMPS to IS-136 and eventually built an IS-95 network alongside its IS-136 network). Three companies: Telstra; Optus (then owned by C&W, now owned by Singapore Telecom); and Vodafone set up GSM networks. The government announced that the reason for the switch off was to make the 800MHz spectrum available for newer technology, and it would be auctioned when available.
When the GSM networks went into operation, it became clear that GSM is a lousy technology for places like Australia, because Australia is enormous, and very sparsely populated. GSM works fine in densely populated Europe where base stations are close together, but it works very badly in situations where large cells are called for. (My understanding is that it fails when the time it takes for a signal to go from the base-station to the handset becomes comparable with the length of a timeslot, so it's a TDMA thing in general I guess). The fact that the AMPS network, which worked well with large cells in rural areas, was being switched off and replaced with GSM (which didn't work) enraged voters in rural areas, who had become used to having mobile phones.
Like rural voters everywhere, rural voters in Australia are upset about a lot of things. (which largely come back to the fact that agriculture is not a way to get rich in the modern world, whereas it was a century ago, and the importance of rural Australia to the country has been in decline for at least that long, but I digress). Rural voters are a political problem for the conservative government that has been in power since 1996 in particular, because rural voters have recently been flirting with parties of the far right instead of the traditional rural conservative party. In any event, in this case rural people really did have a point. The government therefore felt it needed to do something quickly.
The auction of the 800MHz spectrum took place, Telstra gained a licence and was encouraged (and subsidised) to build a national IS-95 network as quickly as it could. (Hutchison Telecom also purchased 800MHz spectrum, and built a second IS-95 network in the large cities, and signed a roaming agreement for its customers to use Telstra's network out of the cities). This solved the rural voter problem quite effectively, as IS-95 works fine with large cells. (Has this issue come up in the US? Surely it must have). Therefore, what we ended up with in Australia was a situation where Australia had two solely GSM operators, one solely IS-95 operator, and one operator (Telstra) that owned networks of both kinds.
What then happened was that the three GSM operators gained something more than 90% market share between them. Although Telstra caters to customers in rural areas if it has to, its profitability lies in customers in the large cities, as this is where the majority of the population lives, and the urban population is much richer. City people might like to pretend that they leave the city to experience the great Australian outback regularly but in actual fact they don't. Therefore, it doesn't matter to most of them that GSM phones do not work outside the cities. For the best customers, international roaming is probably more important, and this does work extremely well for GSM, and it is an issue on which the CDMA world has never seemed to have got its act together. For whatever reason, CDMA lost out badly in Australia.
I think the biggest reason behind this is simply that, for some reason, mobile phones turned into fashion accessories. People are very conscious of their brand and appearance, and it is very important to have a 'cool' . (I think this is even more the case in Europe and Asia than in the US). Cell phones almost became like watches. A $1000 watch probably doesn't tell the time any better than a $20 watch, but people are willing to pay the difference in order to have the right watch. The $20 watch may well have more features than the $1000 watch, but this doesn't matter, as the only features on their watch that most people ever use are the time and date. Nokia were first to understand that phones were like this too. (The Nokia 8210 is easily the most successful phone in recent years in Europe and Australia, but in terms of functionality, it is quite backwards. It can be used for phone calls and SMS messages and that is about it). The features that Nokia added were lifestyle features such as changeable ringtones, games, and the ability to change the casing of the phone to change its colour. Plus they concentrated their advertising on these lifestyle features. What they did was create a situation where if you are a high school student, it is social death to have a mobile phone that is not a Nokia. If you are a single woman, then the tiny little phone that goes in your handbag has to be a Nokia. Nokia have never struck me as having great engineering - Ericsson and Motorola seem to get new (technical) features onto the market much faster - but Nokia are great at creating demand for their phones. Despite having seemingly excellent engineering, Ericsson have produced phones that are ugly, and that has cost them. Motorola's phones are packed with features - my own phone is a Motorola for this reason - but they are less attractive and are weaker on the lifestyle front than are Nokia's. (Motorola have improved their game a lot in the last couple of years, however).
And in markets such as Australia, Nokia does not sell CDMA phones. Yes, they produce them for the American market, but in markets such as Australia and New Zealand, they do not sell them. When asked about this, they say that they prefer to concentrate their efforts on the GSM market. If you want to buy a CDMA phone, it will generally be made by a South Korean company - Samsung or LG or Hyundai. And while these companies make decent products, they are deeply unfashionable: they are brandnames associated with cheap cars and cheap televisions. People do not want this for a mobile phone. So they have lost out. GSM has the high prestige brands associated with it, and it has gained the reputation for a quality product, even though it is technically worse. (It seems foolish to me for Nokia to decide which of its products its customers want for them rather than letting them do this, but that's its strategy).
In Australia, Telstra responded to this customer preference by seeing its CDMA network as part of its universal service obligation and only really promoting it in rural areas, devoting most of its marketing effort to GSM, and Hutchison has simply tried to compete on price. (Its calls are cheaper than anyone else's).
In New Zealand, Telecom NZ have sold IS-136 and later IS-95, and have lost out in a similar way, although not as badly. Their only competitor, Vodafone, uses GSM, and Vodafone have done a far better job of marketing their service, at least partly by selling GSM as the world leading technology.
In 2000, vast sums had been paid in Europe for the 2.1GHz UMTS spectrum, and a similar auction was held in Australia. (They auctioned the 2.1GHz UMTS spectrum bands, but did not specify a technology). However, there were about the same number of licences as applicants in Australia, so the licences went cheaply. Telstra, Optus, Vodafone, Hutchison and Qualcomm all purchased 3G licences. Optus (who have 'vendor financing' from Nokia) and Hutchison (who have a global parent that intends to roll out UMTS networks around Europe) announced they would build UMTS networks quickly. Telstra and Vodafone said they would build UMTS with less urgency, and Qualcomm announced that it would build a network using 2.1GHz CDMA2000 and resell the capacity. The extraordinary thing is how amazingly detached the rhetoric was from reality at the time: Nobody had any idea what 3G was or was supposed to do, but they had already decided that UMTS was going to be the winner. Plus they had no idea of the value of the assets that they already owned. At the time, Telstra was fully talking the UMTS line, but in the two years since, their tone has changed a lot. They seem to have woken up to the fact that their IS-95 network is an asset, and it seems to be clear they will launch a 1x service before long. (Telecom NZ has already done so).
(There were lots of theories as to what Qualcomm was doing - my theory was that they wanted to adapt and demonstate their CDMA2000 equipment for the 2.1GHz bands that were being auctioned throughout the world by regulatory authorities who thought that UMTS would prevail put didn't feel the regulatory need to specify a technology, probably with China in particular in mind. Qualcomm have been quiet on this lately, which may suggest that capital is too expensive these days for demonstrations like this. If they were thinking about China, it may be unnecessary anyway, as China Unicom has a (quite new, probably 1X capable out of the box) IS-95 network in pace already).
I suppose the lesson to be learned from this is the same one that you are making, which is that it's a bad idea to try to pick winners. Australia, NZ, and a lot of Asia has IS-95 networks in place, even if these networks do not have huge market shares at the moment. If camera phone type applications become a big deal, as they appear to have done in Japan and Korea, then it will be very easy for these networks to be upgraded to CDMA2000/3G, and you will see an amazingly quick shift in the fortunes of the two technologies, as the infrastructure is already sitting there in most of Asia to allow this to happen. (There was an IS-95 network in Singapore that was switched off because it didn't have many customers. I wonder if they can switch it on again. Actually I doubt it as it was operating on 1900MHz and I think the spectrum was reallocated to allow overlapping 1800MHz GSM). If some companies get a big advantage from this, there will be pressure for competitors to upgrade too. This may lead to widespread 2.1GHz CDMA2000, as this is where the free spectrum is.
Actually, I think the shift in perception as to which is the successful technology has just happened. I think CDMA2000 has just won, and this will be common wisdom within six months. This leaves Sprint and Verizon in the box seat in the US. Asia is in a good position to adopt the technology because there is enough IS-95 in place to allow a fairly easy transition, but Europe is completely screwed, as it has committed itself to a technology that doesn't work, and it cannot fix this until very slow moving bureacrats change the rules. Plus there is so much bad money already invested that they will no doubt continue throwing good money after it for a while.
Just as a matter of interest, there is one interesting regulatory loophole in Europe for people who want to build CDMA2000 networks. The EC/EU only got involved in the spectrum allocation business for GSM, and prior to that allocation of spectrum for analogue services was a matter for national jurisdiction. (The resulting mass of incompatible analogue systems was one reason other than protectionism that we got a single European standard and a single European set of spectrum allocations for GSM) A lot of European governments allocated 450MHz spectrum for analogue services, and in a lot of cases this is still allocated and still subject to national rather than European jurisdiction. (This spectrum is also available in Russia and one or two places in Asia). In most cases it is at least theoretically legal for the owners of such spectrum to build CDMA2000 networks in this allocation. I know that Qualcomm have been working on developing hardware to work at this frequency, and there is also a variant of GSM designed for it. I don't know if anyone has the guts to take a gamble on building such networks in Europe, or if bureacracy would get in the way. (I think it might). At least in theory, however, it is a possibility.
I have spent the last nine months writing a book on digital television, and the European proponents of the DVB digital television standard sound exactly like GSM people. (Actually they are in many instances the same people, so this is perhaps not surprising). We will see what happens with this technology, too.
Update I have added a few more comments on this, including observations on what my related stock recomendations might be. I have also written another piece discussing the reasons as to why Europe's mobile phone market is now as schlerotic as it is.
Further update I am presently looking for a job. If anyone reading this page things they might know someone who would be interested in employing me, look here .
Okay, fly the Jolly Roger
I see that pirates are now pressing CDs on ships in the Straits of Malacca.
I see that pirates are now pressing CDs on ships in the Straits of Malacca.
Subscribe to:
Posts (Atom)