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Deloitte: Spectrum Issues to Cause Network Congestion
Suggests Carriers Raise Rates to Handle Problems
by Karl Bode 09:50AM Monday Jan 21 2013
Stat farmers Deloitte are again predicting an Internet capacity apocalypse, even if every single past prediction of this type has proven to be incorrect. In their latest compilation of predictions, Deloitte insists that carriers simply aren't going to be able to keep pace with the data demands of smartphone users. The result will be Internet capacity and performance issues becoming widespread in just the next several years, with carriers jacking prices sky high to manage these problems.

"Major metropolitan areas in some geographies should expect to see continued deterioration in end user experience," the report states. "The other alternative is that carriers may want to increase what they charge for data and speeds: if spectrum truly is a scarce resource, then using price to signal its value is likely to reduce demand to the point where service standards do not fall."

Of course you don't have to be Nostradamus to predict that carriers will raise prices whenever possible regardless of the "facts on the ground," but what about the capacity crunch on wireless networks?

Deloitte's predictions come just as industry press and analysts are finally noticing that claims of spectrum armageddon were dramatically over-stated. There's often plenty of spectrum, it's just being used inefficiently by government and industry, and in many cases is being squatted on to prevent new market competitors.

Meanwhile companies like Verizon and AT&T who repeatedly claimed spectrum crisis have now publicly stated they have plenty of spectrum to build out LTE networks here in the states. Even third and fourth place Sprint and T-Mobile find themselves in great shape in terms of spectrum; Sprint's acquisition of Clearwire means they'll now have the most spectrum holdings of any carrier.

Deloitte has been wrong about these sorts of predictions before. Back in 2007 Deloitte predicted that we'd be facing brown outs and capacity issues on fixed line networks by now. Smart network engineers and modest network investment more than handled any growth in demand, and predictions of an Internet apocalypse fell well short of the mark. Deloitte seems to have learned a lesson, and while they're still predicting some capacity doom and gloom that won't happen, the firm at least acknowledges there's a lot more carriers can do to handle user demand, ranging from cognitive radios and additional Wi-Fi offloading to picocell and femtocell use.

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ArrayList
netbus developer
Premium
join:2005-03-19
Evanston, IL

why do we keep giving these guys a mic?

Seriously, why do you guys keep publicizing their BS? It's BS. Don't share it.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

2 recommendations

Re: why do we keep giving these guys a mic?

said by ArrayList:

Seriously, why do you guys keep publicizing their BS? It's BS. Don't share it.

Perhaps you should read the full report before deciding they have nothing worthwhile to say. It is much more in depth and nuanced than the BBR headline implies.

»www.deloitte.com/assets/Dcom-Aus···2013.pdf

Start on page 49 for the spectrum section.

--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.

ArrayList
netbus developer
Premium
join:2005-03-19
Evanston, IL

Re: why do we keep giving these guys a mic?

Yes, I should read the shill report. _

the only accurate thing is that ISPs do not have adequate infrastructure. We all agree that they need to do the right thing and improve it. They can skip a few generations and get on with the fiber.

michieru
Premium
join:2009-07-25
Miami, FL
Reviews:
·Comcast Business..
·AT&T U-Verse

1 recommendation

So I have read the report section for spectrum crunch and they are implying that in order to fix the issues with spectrum the industry will need to utilize more efficient methods such as LTE and re purpose spectrum from older technologies to improve service in very populated areas.

The only fear they have is that the continued growth of wireless devices that are attached to cellphone networks is not slowing down and the current technology would not be able to keep up with user demand. So in order to fix the issue they suggest more spectrum and understand the differences between the kinds of bands that are good for building penetration and those that aren't.

Therefore the report does not seem crazy at all and at the very least the title of that chapter is misleading.
Skippy25

join:2000-09-13
Hazelwood, MO
Knowing that Deloitte probably charges no less then $400/hr for their services and probably closer to $800/hr for partner work, I want to know who paid for this "report" before I make any decisions concerning its "accuracy".

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: why do we keep giving these guys a mic?

said by Skippy25:

Knowing that Deloitte probably charges no less then $400/hr for their services and probably closer to $800/hr for partner work, I want to know who paid for this "report" before I make any decisions concerning its "accuracy".

They have thousands of clients. Looking forward reports to 2013 like this are shared costs across their whole clientele list. It wasn't tailored for 1 client. You don't get to see those - only the client does.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: why do we keep giving these guys a mic?

Thanks for the lesson.

I can tell you 1 thing for sure. They wont be putting man hours on a report that they are not directly charging a client for. They may have pooled a few together, but this was done with intent and it was determined whom was paying, a client code was setup and staffing was determined before a single minute was put on it.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: why do we keep giving these guys a mic?

said by Skippy25:

I can tell you 1 thing for sure. They wont be putting man hours on a report that they are not directly charging a client for.

Of course they will. It is part of the PR/marketing/advertising budget used to get new clients that all companies budget for.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: why do we keep giving these guys a mic?

I guess my 22+ years at one of the big 4 firms has taught me nothing and you know better.
komal

join:2003-02-16

1 recommendation

Re: why do we keep giving these guys a mic?

said by Skippy25:

I guess my 22+ years at one of the big 4 firms has taught me nothing and you know better.

I strongly doubt you have any work experience at a Big 4 firm if you didn't even know that they frequently publish market research in order to make the news.

Dark is right.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: why do we keep giving these guys a mic?

Think what you will but after 22+ years and I am yet to see one released by my firm nor hear about it in a company announcement. But as I said it simply could be that he knows better than me as I would have no interest in any of them and would probably forget them as soon as I heard about them.

Regardless, once money is involved any report is tainted as it is either tailored to those paying for it or it is tailored towards the ones they think they will get the most for it. Just like doing surveys.

michieru
Premium
join:2009-07-25
Miami, FL
When it matches the opinion and views of this site in terms of moving over to LTE and improving spectral efficiency I think this report should be applauded instead of demonized. So who ever influenced them with cash it was in our favor.

cableties
Premium
join:2005-01-27

You ruin'd me pipes!

Start at 1:31 and on to 1:44

»www.youtube.com/watch?v=15egFvDh69Q

--
Splat
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1

Now we know where the shortage experts from Enron went.

It looks like all of the dirt bags that were responsible for creating the fraudulent shortages while they worked for Enron, got jobs with the wireless carriers and their mouthpieces. The scheme is to shut down a few towers for maintenance or not use bandwidth they are authorized to use and then claim that they have to raise prices in order to encourage conservation of bandwidth.

fuziwuzi
Not born yesterday
Premium
join:2005-07-01
Atlanta, GA

Re: Now we know where the shortage experts from Enron went.

Follow the money. How much does Deloitte have invested in carriers? It is quite amazing, really, that these FUD sellers now are nearly transparent. They don't even have to mask themselves very effectively anymore.

Welcome to the Corporate States of America, one nation, under greed.
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Teabaggers: Destroying America is Priority #1
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Now we know where the shortage experts from Enron went.

Deloitte is not an investment firm, they are an accounting firm.

fuziwuzi
Not born yesterday
Premium
join:2005-07-01
Atlanta, GA

Re: Now we know where the shortage experts from Enron went.

said by Skippy25:

Deloitte is not an investment firm, they are an accounting firm.

And they don't invest any money in anything, living totally on charity?
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Teabaggers: Destroying America is Priority #1
Androidian

join:2012-12-14
Purcellville, VA
Reviews:
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said by fuziwuzi:

Follow the money. How much does Deloitte have invested in carriers?

That would be something quite hard to determine, given that Deloitte is not a public entity and its Partners and Principals do not have to disclose their private holdings to anyone but the firm's compliance personnel.

That being said, how many here would be incredibly surprised to discover that AT&T and Verizon are Deloitte clients?

I have to wonder if this is a way of helping those wireless companies "legitimize" their continually upward spiraling pricing strategies, or if there is something else involved. Not long ago, Deloitte was trying to make a name for itself in the arena of analytics. This could be an attempt to garner some attention in that area and bolster their reputation as well.

As much as I don't like their suggestion that raising prices would help prevent capacity problems, basic economic principles would indicate that lower usage rates could be achieved through this route. The question that wireless carriers have to determine for themselves when faced with raising prices is how it will impact their bottom lines -- something determined primarily through strategies employed by their competition and price elasticity of wireless consumers.

NotTheMama
What Would Earl Do?

join:2012-12-06

The Mayans are alive and well

and working at places like Deloitte.

chip89

join:2012-07-05
Independence, OH

1 edit

Liars

Why are we giving these liars something to say in the first place.
jvanbrecht

join:2007-01-08
Bowie, MD

Everyone needs to pay a little more attention

Within this document, the first references to any particular US carrier, is at the end of the document referencing source material. And it is not specific to the US, it also includes China, Japan, and a bunch of others.

This document was not paid for by any particular client, this is something Deloitte consulting has done for many years now, and is a global document, not a US specific one. The document was not even prepared by US based partners, it came out of Australia.

Whether or not you agree with the results and stats within it, is fine, everyone is entitled to an opinion, but there is not reason to immediately come to the conclusion that it was paid for by a telco. Have any of you even looked at the past years TMT documents, not related to wireless at all in some cases.

As a side note, in the interest of full disclosure, I am a Deloitte employee, but have nothing to do with the Consulting side (Deloitte consists of many different entities).

A second side note, don't think I just came here and registered an account to defend the company, I have been here for years.