Geo-Monopolies?

These past few Qs has seen some significant pain coming to some OEMs such as Nokia and SonyEricsson. Don’t get me wrong, I have friends at both of these OEMs and I think they both produce amazing devices but I’m wondering if there is an another reason for their pain.

Yesterday, I went to the T-Mobile store to look at some device packaging. I specifically wanted to see the images on the boxes. In 2005, when I last did this exercise, you’d often see details such as megapixels, video support, screen size and 3G written on a box. This time, it wasn’t a single detail about the device but actually the logos of each web service that worked (ie Facebook, Youtube, Pandora, Google, Twitter etc). I’ve knew this trend was coming and it is something I’ve been evangelizing for the last couple years – it’s about the services the device supports and not the device specs (or at least not as much).

What’s interesting though, is if you are start to look at each of these logos, you realize they are all US Web 2.0 companies. A monopoly by normal definition is usually when a company has an over-riding control of a specific vertical such that they can dictate the terms for the rest of the ecosystem (ie owning the entire operating system space, ha!). Horizontal monopolies are less common these days but I’m wondering if the US has a geo-monopoly on Web 2.0? Is that even possible and obviously not in the traditional sense.

Given that the next generation devices from TVs to vehicles to phones and other electronics are going to be differentiated by the services they include (ie access to Twitter and Facebook, or being able to search via Google or watch video via YouTube) – this points to an interesting problem. If you are an OEM and you do not have significant marketshare in the US, how do you convince the Web 2.0 folks in the US to build to your platform first (this is under the presumption that most Web 2.0 startups / companies will build for their home territory first). Sure, they may be able to pay these Web 2.0 companies to build for them or incentivize the top 10 guys but how do you convince the long-tail which easily represents 70-80%+ of all the apps / services and usage.

What’s even more painful is that the pain has a downward spiraling effect – ie, Nokia has to convince these Web 2.0 developers to build killer services to sell more phones but if the first doesn’t happen (or to the extent necessary), the 2nd issue becomes an even larger problem. I guess you see the same effect with the brains of Silicon Valley – there is no brain drain IMO, if anything, I see more and more very talented people choosing to live here.

Taking this a step further, you could being to look at Web 2.0 as a resource. Resource control spread by geo is well understood (ie gold and oil are great examples). Can Web 2.0 be considered a necessary resource like gold or oil?

Interesting thought experiment, I would love to get your feedback.

Measuring AT&Ts Network

I’ve been meaning to this post for a while – it’s inspried by a similar analysis of Vodafone coverage in Germany via WirelessMoves. Note, I’m definitely not an expert when it comes to carrier infrastructure especially since I’ve spent my whole career on the software side of the mobile biz :)

Anyways, I recently read that it’s estimated that ATT has approximately 50K cell sites in the US. I’m not sure what’s the split between GSM and UMTS base-stations but from a subscriber standpoint, I have read that approximately 30% of US subscribers are 3G subscribers meaning they have a 3G handset and are connected over 3G. In any case, let’s do some simple math assuming all 80M ATT subscribers were connected over the 50K cell sites. This means each cell site is serving 80M / 50K = 1600 customers. Base stations are usually split into three sectors meaning each sector covers 1600 / 3 = 533 customers. Now, the average ATT subscriber uses 760 voice minutes each month so now multiply 766 min * 533 customers and you have 408,278 voice minutes per sector. Now obviously, most of the calls are within a certain set of hours each day, I will assume 16 so you then have 408,278 minutes / 30 days / 16 hours = 850 minutes per sector per hour. A sector is typically equipped with 2-3 transcievers which can each server between 6 and 8 voice calls meaning the potential maximum would be 60 minutes * 3 transceivers * 8 voice calls = 1440 minutes per sector per hour – I have no idea if that is reasonable or not :)

Lots of assumptions here and I’d love to get some more accurate data. It’d be interesting to look at data consumption per sector and see if we are really under-capacity. Obviously, it’s not as simple as 50K cell sites since there is quite a bit of tower leasing meaning only partial capacity as well as a significant number of subscribers being prepaid and/or part of an ATT MVNO (ie Tracfone estimated at 14M prepaid subscribers). We also assuming an even distribution across the country which definitely doesn’t hold, you’d expect a higher density within urban centers.

In any case, interesting as it is – let me know if you have better data.