WASHINGTON-For the wireless industry in 2000, the outlook is LOOK OUT! Wireless and the Internet have found each other. The high-tech Big Bang is not over. Creative forces are still reshaping the digital universe, but patterns are emerging.
At the dawn of the new century, the wireless industry is about to be turned upside down and inside out.
Today the industry comprises distinct service sectors: mobile telephony, paging, dispatch, wireless local loop and mobile data, to name a few. In tomorrow’s world, wireless will not be an industry. It will be one of several access technologies (along with cable, fiber, copper and satellite), a virtual gateway through which worlds of information-voice, data and video-will pass. Applications will rule. Hello, brave new world.
Some studies even predict wireless will carry nearly half of all e-commerce in the future. Yet a new U.S. News & World Report survey found respondents are mostly disinclined to using wireless gadgets for Internet links.
Still, most signs-including the fact that wireless and the Internet are the two fastest-growing industries around-point to boom time for wireless data.
“Wireless e-commerce is it,” said Andrew Cole, vice president and head of the wireless practice at Boston-based Renaissance Worldwide Inc.
The big fight, according to Cole, will be for ownership of the customer. Who will control the subscriber? The AT&Ts and Sprints of the world? Or the AOLs and Yahoo!s of the world?
Price, value, branding and speed to market will be keys to keeping customers and achieving success, Cole stated. He noted that voice services might be given away as a loss leader by data-strong underdog carriers that need market share.
Typical of the New Age wireless entrepreneurial spirit is Dan Trajman, an Israeli who co-founded CTI Squared Inc. in 1996.
Now with a U.S. presence in Burlington, Mass., the firm is marketing an open communication platform that seamlessly integrates voice and data among the public switched telephone, wireless, Internet, Intranet and cable networks. The idea: to offer virtual office services with anywhere-anytime access.
“Over time, every business is becoming a portal,” said Trajman.
The wireless Internet revolution brings together wireless carriers and manufacturers, computer hardware and software vendors, system integrators, dot.com firms, Web wizards, content providers, infrastructure architects, and others. And marketing geniuses make it real.
This radical transformation of the wireless industry will not happen overnight. Though it has pizzazz and looks big today, wireless data-particularly wireless Internet-is in a formative stage.
Wireless data standards are still being refined. Data speeds for mobile applications remain slow, slow and slower. The fat pipe for mobile applications doesn’t exist; more spectrum is needed. Wireless service is not ubiquitous; systems are littered with holes.
“My belief is that if people buy [Web] phones and they are out of coverage, they’ll throw them against the wall,” said Andrew Seybold, a top wireless analyst.
Seybold said the industry should know better than to be declaring 2000 the year of wireless data. “I think 2000 will be a great year for data, within reason,” said Seybold. “The big challenge for industry is figuring out how to [reconcile] the hype with the reality.”
Scott Goldman, new head of the Wireless Application Protocol Forum, remains confident and is undeterred by skepticism.
“I really believe it is the breakthrough standard that will tie all this together,” said Goldman, referring to WAP. He said WAP applications will start rolling out in the middle of next year.
As such, beginning in 2000, everything will move or be forced in the direction of wireless access. Technology will lead. Everything else-policy, marketing and sales-will follow.
Wireless executives will be forced to modify or even scrap existing business models and replace them with ones built around wireless access, data applications and the Internet. Or they will whither.
The White House, Congress, federal regulators and the courts have two options in the new high-tech order: Jump on the bandwagon, or get out of the way. As such, high-tech policy in 2000 and beyond will be largely one that reacts and accommodates.
The political party that occupies the White House or controls Congress after the 2000 elections will be forced to follow rather than lead the digital revolution.
Telecom policy makers increasingly will be marginalized. That is happening already. The Federal Communications Commission and the Justice Department have approved nearly all mega-mergers that have come their way in recent years. That won’t change in 2000. Consolidation and bankruptcy will be watchwords of the New Millennium.
The Baby Bells, for their part, will continue lobbying to skirt the ban on long distance by lobbying Congress to pass legislation that would let them offer unfettered broadband telecom services throughout the country.
But federal, state and local officials will not be cut out of the picture completely. If 1999 is any indicator, the Securities and Exchange Commission and Federal Trade Commission in 2000 will be dragged further into a new wave of high-tech scams.
Federal regulators also will be forced to sort out the plethora of privacy issues that already have begun to surface.
Moreover, a battle royale over e-commerce taxation will get bloodier and bloodier in 2000 and will become an issue for wireless firms.
Carriers and manufacturers in 2000 will lobby for more deregulation and additional spectrum, yet insist on governmental direction. Congress likely will split the difference by keeping the FCC in existence on a diminished basis.
The intra-industry food fight between the well-heeled wireless incumbents and wireless startups over relaxing the 45 megahertz spectrum cap will heat up in 2000.
Efforts will continue next year to translate new, global third-generation mobile phone standards into Internet-friendly wireless products. The administration will be under pressure by the industry to support global 3G spectrum harmonization at the World Radiocommunication Conference in Turkey next spring.
Wireless trade liberalization will continue, despite the political convulsions that will erupt when the GOP-led Congress considers giving China Normal Trade Relations status on a permanent basis next spring or summer.
Whether global digital commerce leads to global democratic reforms-as the Clinton administration and others predict-is a big question that awaits an answer in the next century.
