PARSIPPANY, N.J.-Third-generation wireless revenue will increase from $4.3 billion in 2002 to $63 billion in 2007, while wireless infrastructure purchases will grow from $4 billion to $34 billion during the same five-year period, according to a new study from The Phillips Group.
“For those companies involved, including AT&T Wireless Group, Verizon, SBC Communications and Sprint PCS Group, 3G is their opportunity to build the wireless Internet,” said John Freidenfelds, a consultant for The Phillips Group, a global research and consulting firm focused on the telecom industry. “Operators are already testing the waters using today’s [second-generation] technology, for example, with Wireless Application Protocol-enabled phones. But 3G will really bring us into the new wireless Internet era.”
Freidenfelds went on to say that consolidation in the market has provided new wireless operators with increased buying power. Verizon Wireless now has more than twice the number of wireless subscribers as AT&T Wireless Services Inc., while SBC Communications, having incorporated Comcast, Ameritech and BellSouth, is almost twice the size of AT&T.
“The combination of technology uncertainty and customer volatility will, however, create tremendous financial risk throughout the industry,” Freidenfelds continued. “The winner will be willing to deplete their cash flow and reserves to win.”
The study noted that infrastructure vendors will also be challenged. They already must invest in multiple technologies so as not to be locked out, and in the future will face increasing competition from new data and application-oriented suppliers.
