Talking to millionaires is always exciting. They always look at telecom bills and think there is money in this market. However, the nature of the market has been rather capital-intensive and requires a great deal of marketing. We have people like Ron Lauder, who took his perfectly good cosmetics monies and threw them away in telecom. Likewise, we have companies like Light Squared being the latest big letdown.
A particular friend was looking to invest in wireless alternatives. He started with Wi-Fi, the great starting point of low-capital costs. If you think bandwidth is unlimited and phone calls and browsing in automobiles are not a concern, you can make a case for Wi-Fi in a geographic-specific region (normally the density and competition impact the opportunity). I pointed out, though, that when it comes to chipsets, ARM-based cellular is a giant commodities market in comparison to Wi-Fi, so economies in the long run win for the LTE family of solutions.
I am not sure he agreed, but we moved on.
We then turned to spectrum and Charlie Ergen, the CEO of Dish, buying up said spectrum. I pointed out that terrestrial sharing was about to become a reality in regulation so there was sound logic that applied to Dish (and few others). Then we got on the subject of spectrum purchasing in general. I once again pointed out that much of the business was capital-intensive and unless you have a ready-made market, the economies were skewed against you.
I think at that point, I talked myself out of a consulting gig.
The following day, I was asked about LTE Cat 0. To my way of thinking, Cat 0 in wireless is the equivalent of Quality of Service discussions. People want to tell you it gives you cheap alternatives, but its real purpose is not technological.
Having said that, if I still worked in the carrier, I would like Cat 0, because it would give me a single purpose IoT chipset that would keep me from giving a backdoor for video, voice and Web to a bunch of smart sensors that in theory should not be transmitting a lot of traffic. The problem is that sensors get to be smarter all the time, and without some sort of mechanism, carriers are going to worry about pirated transmissions.
There are lots of people advocating Cat 0 now at a time when companies are just starting to explore the possibilities of what can be learned from the edge. The general sense that I get then, is that we are going to have two markets. Single purpose sensors with known requirements will be offered in conjunction with carrier pricing and partnerships, while another group of integrators and developers are going to keep exploring the edge and find Cat 0 inhibits their creativity.
Let me know if you agree.
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