RIM (RIMM) maker of the iconic Blackberry smartphone, warned that bandwidth has started to become scarce in markets like the US. It would make sense. The 3G high-speed infrastructure which was built over a half decade ago is aged. AT&T (T), Verizon Wireless, and Sprint (S) are at work to add cell towers and increase traffic capacity.
The dawn of 4G is still over a year away. Sprint has begun to install WiMax, but the LTE standard used by other carriers may not be available for two or three years.
The RIM alarm could be a slap at rival Apple (AAPL) which has had trouble with data congestions on the AT&T 3G network. RIM may simply want to spread bad press about its competitor. Or, the bandwidth shortage could be real.
The number of smart phones sold well outpaces the sale of more simple handsets. That will continue to racket up the traffic which flows through 3G networks, and, like landline broadband, traffic can congest the system.
The 3G carriers and smart phone makers may find out soon that they outsmart themselves. Their products may be crippled enough by lack of capacity that customer satisfaction will go to hell.
Douglas A. McIntyre
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