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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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In April, a Chinese government minister proudly announced that there are now 152m people using 3G mobile phone services in China.
An ongoing story in the Apple world is that the world’s largest mobile phone company, China Mobile (which has about 650 million customers and 70% of the mainland Chinese market), does not offer the iPhone to its customers. There has been much speculation as to when Apple and China Mobile will “do a deal” in order to offer the iPhone to its customers, many stories written by financial analysts (many working for large equities houses) expressing their puzzlement about the lack of such a deal and pressuring the two companies to get on with it. There has been much discussion as to what the business reasons for the lack of such a deal might be – possibly the two companies are at odds about shares of revenues when they sell Apps and music and movies to iPhones over their networks. Such arguments have long characterised arguments between handset vendors and mobile networks elsewhere in the world, although generally Apple has won the argument outside China.
This seems puzzling, however. There is a great deal of money to be made, right now, and this money is simply not being made by anyone at the moment. It requires parties to be very stupid indeed to concede that two parties will have 100% of nothing, rather than undecided shares of many billions of dollars, which is apparently happening here. Neither Apple nor China Mobile are stupid.
This isn’t it. There is more going on here. Or possibly less.
Last week, another piece of information came out of China. The real number of 3G users in China was in fact only half this – between 75 million and 80 million. China Mobile had “mistakenly” provided the whole number of devices sold using its TD-SCDMA technology rather than the number using 3G data services. As well as using this technology for 3G data services, China Mobile also uses it for cordless (but fixed) telephone services. The vast bulk of devices sold had been very simple essentially fixed telephones that could just be used for simple voice and text services.
So how many 3G customers does China Mobile have? Well, there are two other mobile networks in China. China Unicom operates a 3G network using W-CDMA (people who refer to “UMTS” or “HS(D)PA” are generally also talking about this technology, although the terms actually mean slightly different things), the technology used exclusively in Europe, by AT&T and T-Mobile in the US, by NTT in Japan, and by the majority of carriers elsewhere in the world. China Telecom operates a 3G network using the CDMA2000 (often referred to simply as “CDMA” in the US), used by Verizon and Sprint in the US, KDDI in Japan, and by many carriers elsewhere in the world, although far fewer than the number that use W-CDMA. China Unicom apparently had 51 million 3G customers in April. China Telecom claimed 45.56 million.
China Telecom’s number is easier to exaggerate than is China Unicom’s number, as the CDMA2000 technology was developed as a gradual evolution of the (2G) CDMAOne technology, and where you draw the line between “2G” and “3G” is somewhat arbitrary for this technology. W-CDMA was an all new air interface compared to its 2G predecessor, so (if you are being at least reasonably honest, which is never guaranteed in China) it is harder to fudge the numbers than it is for CDMA2000. Assuming that the 51 million number for China Unicom is relatively sound, and bearing in mind that China Telecom has around half the overall market share of China Unicom, a fair estimate might be that China Telecom really has around 25 million 3G customers, assuming that “3G” means people achieving similar data speeds to what is being achieved on China Unicom’s network. (China Telecom clearly do have a significant number of 3G customers. 3G devices bearing their brand were readily available and being sold aggressively in the electronics markets of Beijing when I visited last November, as were those of China Unicom. China Mobile, much less so). So that would mean that the two smaller carriers, China Unicom and China Telecom, have around 75 million 3G customers in all. Which would suggest that China Mobile, the largest mobile phone operator in the world, has, as a first order estimate, none.
This might help explain why they are unable to offer the iPhone.
So, it appears that the largest Mobile carrier in the world, in a country perceived as being rapidly advancing technologically, may have no 3G customers. Why is this?
To answer this question, we need to go back around 20 years. → Continue reading: How the Chinese screwed up their 3G mobile phone networks
Dr Fred Singer says that Mitt Romney should exploit the energy issue to get himself elected President of the United States. You don’t have to agree with everything Singer says nevertheless to be optimistic about the impact that the kind of arguments Singer refers to might have during the campaign. I basically agree with Singer. The new energy Singer refers to is such a huge economic open goal (as we here in the soccer mad UK would say), and at a time when the entire Western world needs economic open goals like almost never before, that not even Romney will be able to avoid at least aiming kicks in its general direction, even if for some reason or another he would rather not.
The economy is the basic issue in this Presidential election, as it almost always is. If you are happy about how well you and your loved ones and friends and neighbours are doing, you vote for the incumbent or his younger friend. If not, not.
Meanwhile, a vast apparatus of energy sabotage has been created, the excuse or the reason for that being that energy of the sort that the modern world likes will ruin the climate and destroy humanity, in accordance with the C(atastrophic) A(nthropogenic) G(lobal) W(arming) story alluded to acronymically in the title of this posting. Only energy of the most non-energetic sort, such as solar panels and silly big propellers, should be allowed, say the CAGW-ers. President Obama either really believes all this CAGW stuff or has lots of supporters who really do believe it, or supporters who placed business bets at a time when they really did believe it, or when they reckoned that a lot of other idiots really did believe it, so Obama is now looking like a green saboteur himself.
It gets worse for Team Obama. Americans want their energy to stop being sabotaged into being much more expensive, and to go back to being cheap again. And, says Singer, new sources of non-green energy now coming on stream might make this happen. Singer’s argument may not be true, what with politicians being politicians, but it is at least plausible. Vast new underground oceans of stuff you can set fire to and power four wheel drive vehicles with have recently been discovered under America. Or, they have always known this stuff was there but now they also know how to suck it out. Or push it out. Or some such thing. The point is, here’s a potential economic bonanza. Do we bonanzify it and go with the flow? Or do we ignore it, to save the planet from climate doom? Although Team Obama has changed its tune about this new, bad, energetic type energy somewhat, it hasn’t changed it enough to be convincing. Fred Singer says Romney should talk up this new energy, and that if he does he will make Obama look an even bigger economic saboteur than he looks already.
According to Singer, not only is the story of the economy as it is now bad for Team Obama. So is the new story, of the economy as it might be. I agree with Singer. I think this is one of those situations where what the contending Presidential teams merely say might actually make a big difference. → Continue reading: Solyndra! Solyndra! How the US Presidential campaign is hastening the end of the CAGW scare
In the United States, as elsewhere, groups plotted to better themselves without consideration for others or the nation as a whole. They were encouraged by an aggregation of incongruous theories called the New Deal, which put the nation $40,000,000into debt and in some departments degenerated into a money-oiled machine for keeping politicians in power. Chiselling public funds, once the prerogative of politicians, became the aim of millions. The formula that citizens must not starve in a land of plenty became for many a means of living off the government rather than by the sweat of the brow.
– Upton Close (Josef Washington Hall): “1930-40: Decade of Deceit”
All you have to do, is to see whether the law takes from some what belongs to them in order to give it to others to whom it does not belong. We must see whether the law performs, for the profit of one citizen and to the detriment of others, an act which that citizen could not perform himself without being guilty of a crime. Repeal such a law without delay… If you do not take care, what begins by being an exception tends to become general, to multiply itself, and to develop into a veritable system.
– Frederic Bastiat
There are a some ideas that are useful when thinking about markets. People act rationally; they act in their own best interests; they follow incentives; their preferences are revealed by their actions; and so on. This leads to such things as arbitrage, which the rationalist Harry Potter has figured out.
So not only is the wizarding economy almost completely decoupled from the Muggle economy, no one here has ever heard of arbitrage. The larger Muggle economy had a fluctuating trading range of gold to silver, so every time the Muggle gold-to-silver ratio got more than 5% away from the weight of seventeen Sickles to one Galleon, either gold or silver should have drained from the wizarding economy until it became impossible to maintain the exchange rate. Bring in a ton of silver, change to Sickles (and pay 5%), change the Sickles for Galleons, take the gold to the Muggle world, exchange it for more silver than you started with, and repeat.
Today I ordered a new HTC One S for my wife. For £15.50 per month over two years we get the handset for “free”, and various voice, SMS and data services. That means that we pay £372. But by buying via a cashback site site such as Quidco we get £30 back — this is commission that would otherwise have gone to some middleman. So we are paying £342 for the handset and the service.
The cheapest I can find the handset online on its own is £350; more typically it costs £400. For equivalent voice, SMS and data services I would pay at least £8.50 per month.
Arbitrage does seem to be happening. On eBay there are people selling phones that have been removed from their original packaging to be unlocked. Someone has taken out a contract with free handset and is then selling the handset without the service for more than they paid for the handset plus the service.
There are other oddities. My wife is an Orange customer. The deal we wanted is available on both T-Mobile and Orange, in both cases only to new customers. One can not simply arrange a new deal with one’s existing supplier because then it is impossible to keep the same phone number. One can “upgrade”, but by doing this the best deals are not available. The only rational thing for a customer to do is switch network operators every two years. My wife switched to T-Mobile. If she had been a T-Mobile customer she would have switched to Orange; nothing else would be any different.
The only way that this makes sense is if most customers do not understand it. The strategy must be to lure new customers with cheap deals and then charge them ever more by confusing them into staying loyal. And it must work, because otherwise this state of affairs would not be stable. People act rationally all right, but they are often acting on limited information.
The rather obvious lesson is that it pays to have more knowledge than the next man.
Incidentally, while it is not strictly relevant because my story could be true of any network operators in the UK, both Orange and T-Mobile are owned by the same parent company, EverythingEverywhere.
Over at the Big Hollywood site – one of many started by the late Andrew Breitbart – it points to how the singer Lady Gaga (full confession – I have some of her tunes on my iPod) pulled out of a tour in Indonesia, a country with a big Muslim population, on the grounds that her material would offend some of the locals. She has cancelled the tour, although she has made rather mealy-mouthed comments on it. Now just imagine what typically happens if, say, a Christian organisation complains about the tone and content of a singer’s material? I remember back in the 1980s when Madonna’s lyrics and videos incurred the wrath of some. And yet such singers regard it as almost a badge of honour to offend Christians. But with Islam, or certain varieties of said, somehow that delight in causing offence does not exist. And we know why: because those who cause such offence, such as Theo van Gogh can reach a very sticky end. As some of our more colourful music entertainers are finding out, there are limits on your willingness to test freedom of expression in the face of potential violence.
Tim Sandefur has done what looks like an excellent piece of historical detective work. He writes about some of the images that are sometimes brought up by those who want to claim that there was no real proof of any serious communist threat to the US and that Joe McCarthy was a deluded fool, etc, etc. The entry is quite a long one so it is worth reading over a coffee break. Here is how it kicks off:
“You’ve probably seen this amusing poster somewhere or other; a bookstore near my house has it displayed on the wall. It’s often cited as an example of Cold War hysteria—the evils of McCarthyism—how foolish our grandparents were, that they would believe such silliness! They must have been really backwards.”
We then are shown the supposedly sinister poster and told how it might have been created, and where from.
This period of US history fascinates me. When I was studying history at school and university, the standard line on the 1930s and subsequent decade and a half in the US was that a lot of the fears about the “Reds” were massively overblown, misused for various purposes, etc. And yet it turns out that even Joe McCarthy might have had a case, as our own Brian Micklethwait wrote some time ago.
It remains a notable fact of US politics that “socialist” is a pretty dire term of abuse. Even those who are, in my view, socialists – such as Barack Obama – seem to want to deny it.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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