March 17th, 2004

More on Horizontal Layering…

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chaos.jpgIn my previous entry, I discussed about the changes in the telecommunication industry to a world where data, IP Packets particularly, is the main revenue generator1 and Voice would become just one of the many application/service provided on top of the data world.

Now, such radical change is extremely disruptive even though it is likely to span across many years. The fixed wired industry just barely started on the transition; In Singapore, you can find a pure IP access provider like Pacific Internet2 who owns no infrastructure but carry their data over other infrastructure providers. But the mobile industry is still a happy family in their wall-garden with voice in the center.

Now imaging what happened on the fixed wired industry now been pushed onto the mobile industry. (In certain ways, it’s already started with 802.11 challenging 2.5/3G) and the havoc it will create, with mobile industry crying fouls (“I paid so much for the spectrum and spend billions on the infrastructure! You have to protect me!”) and the service providers and consumers on the other end demand open access!Then, take note that whatever we see in fixed wired industry is only the tip of the iceberg and we can expect even more changes to come; failed attempts to climb higher in the value chain or moving downward to control the infrastructure when they should focus on doing well in their own area of expertise, etc. Extrapolate this to the converge world of wired and wireless, imaging 10 times the chaos, where incumbents collapse, law enforcement struggling with uncontrollable end-to-end services and demanding control. And of the “Internet Governance” issues raised in WSIS like pornography and spams, it represent only a tiny slice of the problems we going to face in future. With less then 10% of the world population online, we going to get a lot more social problems…

At the same time, this is going to fun! Telecommunication prices will falls, more people with online services, explosion of interesting services we can’t anticipate now. Every decades have its slice ‘Killer Apps’, from Email and Usenet in the 80s, Web and P2P in the 90s, this decade will not be any different. It is plausible that two person could be physically world apart but still connected together. It is also plausible that in future, they could be in a virtual/immersed or transposed reality, always on, everywhere. You don’t call each just talk. Ringtones would be a thing of the last century replaced by Virtual Doorbells..and all these available to the general public at prices no more then what we paying now for our telecommunication services.


1 To be exact, data is a horrible revenue generator with its low margin (SMS is an exception). In a discussion with Jun Murai, I suggested we should look into how to do differential pricing for different data packets. The concept borrowed from the transport industry (where different charges are imposed on different goods) is inspired by Andrew Odlyzko’s paper.

2 Public Declaration: I own shares in Pacific Internet.

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