The PhoneBoy Blog


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Why Don’t Telcoms Do This In The US?

Cell TowerGary Kim lets us know about an interesting development in the Indian mobile operator space. The infrastructure of the three mobile operators is being joined together as a separate entity that all three entities will own a stake in and lease capacity from. The selling of the service and the actual mobile service itself will be provided by different companies.

What does this mean for India’s mobile phone network? It means there’s a single company in charge of maintaining what amounts to a single GSM network. Three different providers don’t have to build a redundant network to provide service. Everyone in India can expect the same level of signal strength and coverage regardless of provider choice.

What makes Bharti Infratel Ltd., Vodafone Essar Ltd. and Idea Cellular Ltd.’s service offerings different, then? There’s more than just the wireless infrastructure. The main ones: pricing and customer service.

The Telecommunications Act of 1996 would have been a hell of a lot more effective if instead of requiring the local exchange carriers to sell unbundled network elements at cost, they legally separated the retail and wholesale portions of the Baby Bell business. That way, there was no “conflict of interest” between selling the service yourself and having to sell the service “at cost” to someone who competes as you.

In the mobile phone space in the US, this wouldn’t necessarily work due to the conflicting standards (GSM versus CDMA). Of course, with AT&T and Verizon Wireless going LTE, we could finally end up with a single network standard in the US. I’m delusional, though. It will never happen.


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