Still on track for 5.5 million

My favorite pessimistic telecom commentator, Dean Bubley, has recently recapped his outlook on network evolution in his 500^th blog post.

Given his general skepticism regarding UMA as a viable technology for dual-mode handset services, I suppose I’m honored that UMA was listed as the very first item he chose to list as ‘over-hyped’.

[Side note: considering UMAToday is the only site ‘hyping’ UMA, I hardly consider it ‘over’-hyped, certainly when compared with other things on the list like WiMAX. But I’ll take that as a compliment that we’re doing something right, thanks Dean.]

But given the comments, I think Dean's jumping the gun a bit:

UMA (unlicenced mobile access) - well, it still hasn't got much traction after another 30 months. Maybe 1.5m subscribers at Orange & T-Mobile US, plus some hopefulness around femtocells. My original forecasts (considered horribly pessimistic at the time) of 5.5m UMA homes at end-2009 now actually look insufficiently pessimistic after all.

First, the comment ‘after another 30 months’ seems a bit odd. Orange only launched 18 months ago (October 2006), and T-mobile just 9 months ago (June 2007). True, we’ve been talking about dual-mode services and UMA for some time, but there hasn’t even been one 30 month period, let alone ‘another’.

But second, I think the forecast Dean made relating to UMA-based dual-mode handsets might actually be one he gets right*. I happen to believe 5m units is within range for 2008. At the end of his prediction period (YE 09), I suspect there will be well over 10m units sold, easily meeting his prediction of 5.5m homes by YE 09.

Thanks for the vote of confidence Dean!

[* Dean is a big fan of the ‘naked SIP’ handset revolution, suggesting that this is the way, rather than UMA, that the market will embrace dual-mode services and VoIP.

In this model, subscribers buy/acquire a Nokia E or N series phone and download a third party SIP client onto the handset. The idea is to bypass those nasty mobile operators and make calls for ‘free’. It's the TruPhone model. Of course, there are several reasons why this won’t work:

1. Spending $500 on a handset to make cheap calls doesn’t compute. Anyone shelling out $500 for a phone isn’t so concerned about saving pennies on phone calls that they’ll download a second client onto a phone.
2. Putting a second client and a second phone number (the SIP service) on a handset is a hassle. Consumers and prosumers want a single number that’s available all the time, not just when the handset is connected to Wi-Fi.
3. Oh, you want to run this SIP client over the 3G network as well as Wi-Fi? Round trip latencies for today’s 3G access network are 200 msec, and that’s just ‘your side’ of the call. It does not take into account the rest of distance those packets must travel. That’s an unacceptable delay for voice calls, even free.

For some reason, Dean’s prediction of 220m ‘naked SIP’ phones shipped in 2008 wasn’t captured in his list of ‘over-hyped’ technologies. I don’t honestly know how many ‘naked SIP’ phones shipped, let alone how many are actually use the application he describes. But I'm willing to guess it's a lot less than 22o million.]