Summary
1. Since the onset of the World Wide Web, this has been a topic of constant discussion. 2. There is no doubt that the demand for internet access is increasing by leaps and bounds. 3. However, companies providing the access points are constantly monitoring this growth and have and will respond to future growth using existing and future technology. 4. Some of this demand will be satisfied by the growth of wireless broadband including WiMax.
Analysis
The article states quite the obvious. This has been the pattern since the early nineties albeit the growth was slow initially but then so was the growth of the access points. The article also correctly points out that most of the clogging is in the “last mile”. No major issues with the major internet highways but the consumers and businesses will be affected if their service to the “last mile” is a small pipe. This may not affect individuals so much as it will to businesses. Individuals may get frustrated when their YouTube downloads takes longer than a couple of minutes but that is no big deal. The real crunch will come when businesses face reduced hits on their sites and links because individuals are unable to get a faster connection. This will be a “growth” Killer and can bring down the internet to its knees and which will in turn bring down the small businesses.
So much for the doomsday prediction. This is not going to happen. Increased demand can only mean one thing for companies and investors. Higher prices and Profits! This has been the model in the past and will continue to be so. The US companies have lagged their European counterparts in one big way, usage of microwave backhaul and fiber technology. Some companies like Verizon are undoubtedly going to emerge victorious in their endeavor as they are implementing fiber to the premises.
Take a look at Google. They are now bidding on the coveted 700 MHz spectrum and if successful, they will force the big carriers to deal with them. Google’s Open Handset Alliance is a good example of how Google operates and gets what they want. I am not exactly sure why Verizon came upfront and have stated that they will support Google and the Android platform especially as there are no alliances yet. What Verizon might be banking on is that Google might get the coveted wireless spectrum and then lease it out to Verizon. Regardless, as one can see, companies are always on the lookout for more avenues and all of these will lead to an increase in the number of access points.
Sprint and its WiMax initiative is also an example of where companies will tread especially when they see demand. Having said that, Saleh’s statement that the incoming CEO for Sprint will need to think carefully on how to proceed with this initiative has led to some concerns that Sprint may completely abandon this completely.
Bottom line, the internet usage will continue to grow leading to a need for more access points. This in turn will make companies spend more money on research and provide more access points using conventional methods and where that fails, use innovative methods to grow. This is a good problem to have and investors and companies alike will translate this to their benefit.
