Greek Complexity

Ahonen on the future of mobile telecoms

Tomi Ahonen wrote recently about his vision of the future of mobile telecoms. Makes for interesting reading.

I contrasted this with Ray Kurzweil's essay The Law of Accelerating Returns, which I read recently. The two essays are comparable because, although Kurzweil provides much more detail, his essay essentially deals with the ways in which computational advances will change our future. So, very similar themes.

But the comparison doesn't really flatter Ahonen. His conclusions are all very interesting but what I would have been more interested to know is how he arrives at each of these ideas. After all, there is no way for us to verify any of this aside of waiting 20 years! Kurzweil does provide both empirical and theoretical bases for his ideas.

So, a better way, IMHO, for Ahonen to have presented and discussed ideas would have been to go through a logical set of arguments, with the final conclusion taking a relative backseat.

(NOTE: I'm not saying his conclusions are wrong! I'm no expert and he certainly is! All I'm cribbing about :-) is that his predictions seem to be driven by imagination, rather than reason. Not that imagination is a bad thing...)

That takes care of the more general criticism.

More specifically (and this is all shamelessly inspired by Kurzweil's essay), I don't quite agree with the thought process in some specific areas. For example, he writes:

I argued that in very rough terms and considering the performance and specifications, a mobile phone of today will be like a laptop computer 5 years ago; a desktop PC 10 years ago; a mainframe computer 15 years ago; and a supercomputer 20 years ago. With Moore's Law we can expect those trends to roughly hold true into the next 20 years. So to see roughly what kind of processing power we can expect from top-end "smart phones" of 2025, we can look at a supercomputer today - such as the IBM BlueGene/L, which as 16 Terabytes (=16,000 Gigabytes = 16 million megabytes) of memory and which runs at 70,000 Teraflops (=70 Trillion floating point operations per second) of speed.

In contrast, Kurzweil's main thesis is that technological progress is inherently non-linear. It grows not just exponentially but "double-exponentially". (Read his essay for details.) If one were to accept Kurzweil's thinking--and it is difficult not to given the amount of background he provides--then Ahonen's simple extrapolation doesn't work. The amount of progress that we achieved over the past 20 years will be much, much lower than the amount of progress we will achieve over the next 20 years. Kurzweil goes so far as to say (and "prove") that the 100 years of the 21st century will see 20,000 years of progress as measured at today's rate of progress.

I wonder what Ahonen and others think.

Link: Ottawa and 20 year future of mobile telecoms: My most challenging conference presentation ever.

Sharing (broadcasting) video

An interesting idea thrown out by James Enck:

Let's say I have a TV tuner slotted into my PC. If I can share my desktop with 200 people, and that desktop happens to be displaying a live tranmission of the latest episode of "Desperate Housewives," then what are the chances that we could add the audio channel and rebroadcast the program live to users around the world?

Is this possible? What if it were possible?

Link: EuroTelcoblog

Wish all girls would read this

Link: Nerds make better lovers

Enough said!

Uploaded some photos to Flickr

See http://www.flickr.com/photos/murli if interested.

Another bigger lot coming soon -- I finally managed to transfer my hundred-odd photos off my cameraphone to a PC!

A tale of two banks

Let me tell you a story. Well, two stories.

Once upon a time, there lived a guy in Singapore who decided that he was ready for his first credit card. He'd held out for a while but thought it was time he got one. So he shopped around on the Internet for a good deal and decided on a couple of banks. Both seemed to have pretty good deals and both had good reputations. So the guy went to each bank's website and filled in the application form.

The first bank said, "We'll get back to you about the documents we need. Until then, sit tight."

It turned out that the guy didn't really have that much sitting around to do. The bank sent him a letter a couple of days later with instructions on how to proceed. The guy was pleasantly surprised at the speed of the whole affair. He followed the instructions he'd been given and was soon the proud possessor of a piece of pearly plastic.

And what of bank number two? After he'd filled in the online application firm, the website displayed a fax number and instructed the guy to send in his supporting documents within two days. Stick to the deadline and we'll give you a little freebie, said the bank.

The guy was well prepared. He sent in his documents the same day and sat back to wait for the plastic to arrive in the mail.

Days turned into weeks. The guy couldn't feel his bum anymore what with all that sitting around.

Then, a phone call: "Sir, we need you to send in your documents again."

"Oh. Why, what's the problem?"

"No, sir, sorry, sir, the fax didn't print okay. Could you try again?"

"Ok, sure. But it's been a few weeks now. Do I still get my freebie for meeting your submission deadline?"

"Don't worry about that, sir. I have it right here ready for you."

So the guy faxed them his documents again.

A few days later: "Sorry, sir, it didn't work this time either. Please try again."

"Hmm. Okay."

(Time check: 6 weeks since the original Internet application.)

Then: "Now we need you to submit this other document."

"You've got to be kidding me. Please just cancel my application."

"I'm so sorry about all this, sir, but I understand how you feel."

Fifteen minutes later: "Hello, is this Mr The Guy? I'm a manager at Bank Number Two and I just heard you decided not to apply for our card."

"You heard right, buddy. You guys had me training for the Faxing Olympics. Thanks, but no thanks."

"Oh, I'm sorry. Bye-bye then."

"That was weird", thought the guy. "I thought these chaps knew what they were doing. Obviously not. The really weird thing is, this manager chappie took the time to give me a call but he didn't seem to care enough to redeem the situation. Maybe it was just standard operating procedure and he was making the token call. If he'd done something to clean up the mess, I might even have switched from being a disgruntled prospect to an evangelistic customer of the bank. After all, I'd been patient enough to wait this long so I was already mentally invested in this."

Some days later, the guy was checking his banking records (bank #3) and noticed he'd been charged an annual fee for a debit card he'd held for a few years now. He decided he'd just cancel the card. After all, he didn't really need it now that he had a credit card (issued by bank #1).

So he gave his bank a call and explained that he'd just been charged a fee for a card that he didn't really need. What would they suggest he do? Hang onto the card for a year since he'd already been billed for the year in advance? Or convert the debit card to a credit card? Either way, he just knew for a fact that they wouldn't refund the fee if he simply cancelled the card.

To his amazement, the bank officer offered to cancel the card then and there over the phone and credit a refund of the fee to the guy's bank account.

The word "refund" had been uttered by a bank employee! Surely they had rules about these things? A list of banned words? Wasn't the phone call being taped?

Was it because he was a long-time customer of the bank? Was it because the amount to be refunded was so, well, piddly?

The guy pushed his luck further. "Can you tell me if I have any recurring bills linked to this card? I'll need to move those over to my credit card. I don't know if you have that information."

"Yes, sir. You have an arrangement with __ company. No one else. Can I help you with anything else?"

"No, that's all. Thank you, you've been very helpful."

And the guy lived happily ever after.

---

So. Two very different stories. Anyone want to guess who banks #2 and #3 are?

Rambling post: risk management, asset securitisation etc

I was watching a show on TV where they were talking about how well-off but not devastatingly rich people can now fly in private jets and avail of exotic holidays because of the availability of time-sharing schemes. The ideas weren't new to me but then the show surprised me: time-sharing for supercars?

It seems a certain company (in the UK?) now allows the affluent to lay their hands on a vast fleet of top-of-the-line cars for a yearly fee. You're allowed to drive these beauties for a certain number of hours every year. Time-sharing for cars then.

Then I watched quite a different show on a different channel. This one was about grid computing. About how "utility computing" would transform the way businesses thought about and used their IT infrastructure. This isn't time-sharing, of course; it's pay-as-you-go.

The time-sharing schemes are essentially call options. Utility computing efforts are even simpler financial instruments. The focus is on maximising utilisation levels and constantly increasing efficiencies. They're essentially operating leases.

These are some of the reasons why finance (and, to an extent, economics) interests me so much. The efficient allocation of resources. Minimisation of transaction costs and transaction sizes, and the corresponding growth in markets that comes about as a result.

Perhaps the best known example of the real benefits that finance can bring to everyday life is mortgages. Or rather, mortgage-backed securities. (Michael Lewis' book Liar's Poker is perhaps the most fun and entertaining introduction to MBS's.) The liquidity that MBS's brought into the market created value for all market participants -- even those who were not actively participating in it, such as homeowners.

But you probably know all this already. The reason I started writing this post was that it occured to me that advances in technology, advances in mathematical/analytical techniques, the ability to target & analyse individual customers and the sheer diversity of players in financial services (it's not just banks anymore as the examples above illustrate; it's also IT firms and holiday companies) can only serve to accelerate the types and number of financial innovations in the market.

A tiny seed of an idea has been germinating in my head for the past month or so about how similar innovations will soon make themselves apparent in risk management (as opposed to consumption of goods or making investments). And again, I don't mean risk management in the purely financial sense of hedging against currency risk and things like that. I mean risk management in the sense of, say, a guaranteed quality of service provided by a firm to its client. Clients sometimes need more than just the plain vanilla service at the lowest price; they may need an ironclad guarantee that it will work as promised, and they will be willing to pay for it. (Sorry, I know this all sounds abstract/vague/lightweight but I did say it was only a germ of an idea!)

For instance, how about risk management for consumers? Perhaps the only area where this is developed to a degree of sophistication is in insurance. Even there, I'm not sure that consumers are not overpaying. And apart from the price, not everything I want covered is covered. I can't design a custom policy for myself.

I will share with you in a separate post how I got started thinking about risk management. As a matter of fact, it was because of an article I was reading about a technology company that has started using risk management techniques in its procurement processes. ("How cool is that!" thought the geek.) This post is only meant to be an introduction and a way for me to define my own thought process.

If this random, rambling post has made any sense to you :-), I'd like to know what your views are on risk management's broadening scope and the opportunities this presents. Send me an email or leave a comment. Or post on your blog and TrackBack.