Fat Pipe Dream

Overhype

from the private-buildup-of-infrastructure dept

I’ve been hearing plenty of stories about Softbank’s latest push to bring high speed internet into the homes of everyone in Japan via Yahoo! BB, but I hadn’t heard much about the details. Wired Magazine is running an article looking at Masayoshi Son’s plans and suggesting that he’s crazy to think it will work out. They say he’s repeating his dot com mistakes, and selling dollars for 80 cents (and making it up in volume). They’re literally giving away DSL modems in the streets and getting people to sign up for cheap broadband service, with the hopes of making the money back… somehow. They’ve built a very nice (though expensive) gigabit ethernet network around the country that lets them do a lot more than other networks – such as offering crystal clear VoIP and even TV over IP. Still, they’re losing money like crazy, and some wonder how long it will last. From the article, it sounds like so many capital-intensive buildouts lately. The company that does the buildout will end up going bankrupt, but someone will end up buying the infrastructure for pennies on the dollar, and creating a profitable service. At some point you wonder if companies will think twice about building out infrastructure, or if there will always be a new group that things “this time will be different”.