Posts Tagged ‘Mobile Speed’
March 21st, 2014 at 4:23 pm
Sprint Chairman Misses the Mark in U.S. Telecom Market Comments
Posted by Print

Softbank CEO Masayoshi Son came to Washington a week ago to discuss “the state of America’s wireless communications industry and the competitive global landscape.”  Despite being Chairman of one of the top wireless companies in America, Sprint, Mr. Son spent the majority of his speech at the U.S. Chamber of Commerce explaining why he believes the U.S. telecom market falls short.  The data we’re looking at, however, tells a far different story.

As an initial matter, peak mobile speed in the U.S. actually doubled from 7.5 to 15 megabits per second between 2012 and 2013, despite the fact that the U.S. is the clear leader in LTE connections.  We make up 50% of the world’s LTE connections, while only constituting 5% of the world’s overall wireless connections.

That data stands in stark contrast to Mr. Son’s claim about lagging LTE speeds in the U.S., particularly in comparison to Japan.  His data derived from anecdotal evidence from mobile users who voluntarily download an app from OpenSignal to track data signal strength.  If he wants to trust that methodology, however, Mr. Son should consider another OpenSignal study claiming Japan had one of the slowest LTE experiences.

Moreover, American consumers  reap the benefits of faster connections for education, health and entertainment at a lower price point.  Americans use their mobile devices significantly more than their European counterparts, with five times more voice minutes and twice as much data.  Despite that, in terms of data alone, the price per MB has fallen more than 93% in the past five years.  That is also reflected in the broadband space, where the U.S. maintains the lowest entry-level price of any OECD country, and that price continues to drop as measured on a per-MB basis.

Most significantly, the U.S. telecom industry has achieved those gains with comparatively fewer burdensome regulations.  Unfortunately, the US company in which Mr. Son now has a significant ownership stake, Sprint, seeks to exploit government intervention and corporate welfare to prop it up against its competitors.  Despite its status as the “king of spectrum,” Sprint wants the Federal Communications Commission (FCC) to set rules for the incentive auction that would artificially favor Sprint and T-Mobile while limiting the ability of AT&T and Verizon to freely bid on coveted spectrum just as a spectrum crunch looms.  Additionally, despite using spectrum in the 2.5 band for its “enhanced” LTE network, Sprint doesn’t want the FCC to count all of its 2.5 spectrum in the spectrum screen.  Keep in mind that the standard for inclusion is suitable and available for mobile broadband use.

In the end, Mr. Son is right:  America’s wireless market is not Japan’s.  Not only are Americans enjoying faster speeds at lower prices, our wireless companies are achieving that by competing in our comparatively free market.  That’s how America’s wireless market was built in the first instance, and that’s the model it should keep in order to continue our global leadership position.