Monday, 11 March 2013

Mobile networks splendidly off-the-rails

Olaf Swantee, CEO of mobile operator EE, posted last week about the parallels between digital connectivity and the planned new UK high speed rail link. As well as the parallels, there’s an important difference, which explains why the UK government is investing in railways but not in mobile networks, and why Olaf has done well in choosing which business to work in.

There are only two sorts of railway engines: the charming ones, which look like this,

and the quick ones, which look like this:
Every other railway engine is just an approximation to one or other of these archetypes.

The same is true about the business problems that railways solve. They move people from A to B and they move goods from A to B. Those are the business problems that railways solve. Railways brought radical change to the world’s economies in the nineteenth century, but since then the innovations in railways have been just minor adjustments to a very stable business model based on a very gradually evolving technology.

The UK government can invest in a railway line that may take twenty years to build, because it can be confident that in twenty years time, a railway will still be in demand. A railway in 2033 cannot help but be very much the same as a railway in 2013, 1963 or 1913. For the government, it’s a safe bet.

Not so with Mr Swantee’s business. I helped in the big design team behind his launch of the EE 4th-generation network brand last year. The launch was a bold move, because until launch day, nobody really knew what UK users would do with 4G mobile networking. Every technical development in mobile networking is exciting like that: not because of any geeky fun in doing cool new technology, but because nobody ever knows in advance what new uses, applications or business models the technology will throw up.

Nobody in 1993 could have predicted the extraordinary richness of today’s mobile communications experience, or the extraordinary diversity of business models that it supports. Nobody today can make worthwhile predictions about what telecommunications will do in 2033, or what it’ll be used for. The technologies, and their usage, are so very far from stability or maturity.

So it’s not surprising that the UK government is willing to invest in railways, but just treats the mobile communications industry as a source of windfall revenues from spectrum auctions. Governments in peacetime don’t invest in risky ventures - or for that matter in very interesting ones. Olaf would be bored on the railways, I’m sure.

Stephenson's Rocket drawing from Mechanics Magazine, 1829, (Wikimedia Commons).
Bullet Train photograph by Ben Salter (Wikimedia Commons)

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