SPECIAL REPORT
10 Trends in Wireless Mobility
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10 Trends in Wireless Mobility # 1 : C O N S O L I D AT I O N
onsolidation continues to be a major force in the wireless ecosystem among both wireless providers and their network infrastructure partners. In 2005, the top five wireless carriers controlled 83% of the U.S. cellular market; today including Verizon Wireless’ planned purchase of Alltel, the top four carriers could control more than 90% of the market. Whether it is AT&T Mobility picking up Dobson or Verizon Wireless uniting with Rural Cellular Corp., a handful of operators control the wireless landscape. As the big carriers get bigger and the small get bought, the world’s infrastructure companies have had to consolidate in order to compete for business from fewer customers. While 2007 marked the year of powerhouse matchups between first-tier network vendors (most notably French powerhouse Alcatel with New Jersey’s Lucent and Nokia’s networks business with that of Siemens,) look for more second-tier suppliers to merge in order to maintain the critical mass needed to continue to offer product to their network and carrier customers.
Links to related stories about vendor consolidation: Alcatel-Lucent, NEC partner for LTE Moto, Nortel deal in the works? CommScope again goes for Andrew in $2.6B deal Nokia Siemens Networks readies for takeoff
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Links to related stories about operator consolidation: Verizon Wireless picks up Californian carrier AT&T Mobility nabs 19,000 subscribers through W. Va. carrier buy By the Numbers: Top Ten U.S. Wireless Service Providers, 2007 Who’s left? T-Mobile buys SunCom in latest rural roll-up By the Numbers: Top Ten U.S. Wireless Service Providers, 2008 Third time’s a charm: VZW to acquire Alltel
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10 Trends in Wireless Mobility #2: S PECTRUM
ireless service providers can’t sell their wares without spectrum. It’s the lifeblood of the wireless industry. While today’s third-generation networks aren’t overloaded, carriers realize that eventually they will need more spectrum to accommodate data-heavy applications like streaming video. Further, with the 700 MHz auction behind us, the nation’s top wireless providers will have to develop individual strategies for how to incorporate their newfound 700 MHz spectrum into their business models. Even operators who stayed away from the 700 MHz auction, like TMobile USA, which owns frequencies at 1.7-2.1 GHz from the 2006 AWS auction, and Sprint Nextel Corp., with its 2.5 GHz spectrum, must figure out how to offer services over a number of frequency bands. In the meantime, the federal government must decide how public-safety and homeland-security needs impact commercial spectrum issues. The Federal Communications Commission has set aside spectrum at 4.9 GHz for homeland security, and
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mandated that some 22 megahertz of 700 MHz spectrum be used by first responders. Neither of these measures have had much success to date. Indeed, the sale of 22 megahertz at 700 MHz, considered prime real estate, failed to capture the minimum bid mandated by the government, probably because it was to be shared between commercial and public-safety interests. The FCC is in the process of deciding how to re-auction that spectrum, and is also looking to auction another 25 megahertz of spectrum. Initially, it appears the government would like some of that spectrum to be offered free to qualifying households.
Links to related stories: 700 MHz auction T-Mobile USA, Leap move closer to AWS launches
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FCC moves on 2155-2175 MHz spectrum band FCC details plans for free nationwide wireless broadband
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10 Trends in Wireless Mobility #3: BEYOND TH E PHONE
ireless carriers – and their network partners—are moving beyond being the phone to become Internet companies. This trend is deeper than just AT&T Mobility and Verizon Wireless offering fiber-to-the-home service via their parent companies. Nokia, the world’s largest handset manufacturer, has grand plans to become a multimedia company, as does rival Samsung. Motorola has publicly stated it wants customers to have “liquid connectivity,” where content is transferred seamlessly from your home TV to the cellphone in your hand to the in-dash entertainment system in your car. Everyone is watching this marriage of mobility and the Internet to see if it will be as fruitful as industry imagines.
Links to related stories: Hardware, and beyond: Nokia and Samsung race to provide Internet services Nokia moves to realize Internet ambitions Nokia’s vision based on constant connectivity
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10 Trends in Wireless Mobility # 4 : E N T E R TA I N M E N T
cellphone isn’t just about making a voice call anymore. It’s an entertainment medium. People use phones to listen to music, play games, read news, check horoscopes and get sports scores as well as find friends and otherwise network. This trend will only continue to grow as today’s youth demand more entertainment applications. One of the hottest areas of venture capital today speaks volumes to that youth market: mobile social networking. No one has hit upon a successful business model, but a lot of companies are investing heavily in the promise.
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Links to related stories: 462M to subscribe to mobile TV services by 2012
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Consumers (still) want location-based services Cellphones to dominate for navigation, study finds S.E., Nokia set to battle in D-2-C space
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10 Trends in Wireless Mobility #5: WI RE LE SS CRE E P
ireless is expanding – everywhere. Wireless will connect your home, your office, your car, etc. Wireless connections will be everywhere someday. Workers are demanding wireless applications on the go as well as in the office.
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Gaming-console makers are adding Wi-Fi connections to their gadgets. The most exciting devices cited by WiMAX technology proponents are not laptops or handsets, but nontraditional devices with wireless connectivity, like digital camcorders, gaming consoles and the like. On the enterprise side, large machinery and smaller dispatch services are relaying information back to the office via machine-tomachine applications. It’s difficult to find a gadget or application that wouldn’t benefit from some type of wireless connectivity. Indeed, wireless connections outnumber wired connections today.
Links to related stories: Infotainment on the move: The future of in-vehicle consumer infotainment AT&T snags Starbucks Wi-Fi agreement The mobile enterprise, 2008: ‘all over the map’
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10 Trends in Wireless Mobility #6: FUTURE TECH /COM PETITION
TE; WiMAX; UWB; software-defined radios L that sniff out the best frequency (which would enable open-access), near-field communications,
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Bluetooth, xMAX. Engineers are continually pushing the limits of today’s technology. These advances are welcome by existing operators but also pose the threat of becoming disruptive technologies that would enable new competition in an alreadycrowded field. Likewise, new potential competitors (Intel, Microsoft, Google, Yahoo, Skype, Vonage) all pose a threat to how business is done today. Traditional handset makers like Nokia and Samsung are making inroads to develop their own relationships with customers, not just going through the carrier for those relationships. Further, Apple’s iPhone showed that one successful product can turn the industry on its ear, and create new models for conducting business.
Links to related stories: Competitors: Technology: Skype’s rallying cry WiMAX opportunity bright, though challenges remain Verizon Wireless’ LTE decision puts ball in UMB, WiMAX court FCC begins new round of white-spaces testing
Yahoo’s impressive mobile run A changing tide? Ovi, Android loosen carriers
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10 Trends in Wireless Mobility
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# 7 : H E AV Y H A N D O F R E G U L AT I O N
ireless carriers are increasingly under pressure from state and local governments to treat their customers better. There are two issues at hand: a) carriers don’t want to have to comply with regulations like their wireline counterparts do. They argue wireless is successful today because it’s been self-regulated by competition. And b) Even worse, having to comply with myriad regulations state by state and city by city would be expensive. If it costs a wireless provider $5 more per person to do business in Colorado than Utah, should the Colorado customer pay more? Lately lawmakers have targeted open access and early termination fees as two areas to regulate more closely. Many wireless carriers have said they will start pro-rating early termination fees in response to this legislative pressure.
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Links to related stories: CRACK DOWN: Proposed bill would give FTC some mobile authority
Klobuchar: Wireless carriers require federal oversight
State’s role in consumer protection bill pondered
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10 Trends in Wireless Mobility #8: OPE N ACCE SS
few years ago customers didn’t really complain about LG Chocolate only working on Verizon Wireless’ network. However, with the iPhone/AT&T bundle, consumers have rallied around the open-access cry, and want the wireless ecosystem to act like the wired Internet world, where devices and applications can work with any ISP. The irony behind this movement is that the iPhone, which caused the uproar, is singularly tied to AT&T Mobility’s network in the U.S. through revenue-sharing agreements.
Links to related stories: Martin to oppose open-access mandates
Open access: Paradigm shift or an open question
House introduces net neutrality bill
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10 Trends in Wireless Mobility # 9 : C O N S U M E R A P P L I C AT I O N S
he rise of mobile TV, mobile advertising, mobile search, social networking and location-based services. These areas have the potential to be some of the fastest-growing consumer applications in the coming years, but only if the wireless value chain offers these applications at the right price, to the right person, at the right time.
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Links to related stories: Parsing reality from the hype A bright future for ad-funded mobile entertainment Garmin punches into cellphone market with iPhone-style navigation gadget
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Dish to test satellite-based mobile TV service using 700 MHz spectrum
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10 Trends in Wireless Mobility # 10 : D E V I C E F R A G M E N TAT I O N / O S urther fragmentation of the device market even as it tries to standardize. Application developers are frustrated that each time they introduce a new app, they have to tweak it to work on a variety of operating systems. Whether Java, Linux, Symbian, Microsoft, Android or Apple, the industry is likely to continue to see a variety of OSs in the marketplace.
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Links to related stories:
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Analyst’s crystal ball on device trends Open access: Paradigm shift or an open question Android floats in space