Even with the promise of a tech recovery and emergence of new applications for wireless gadgets aimed at free-spending teenagers, information-starved road warriors and the rest of us, 2004 is apt to be no more than a sexed-up version of the year that was.
Most of the action will be in the states and industry, the latter already light years ahead of official Washington. But it will be worse in 2004, a presidential election year. Except for a few major initiatives here and there-oh yes, there’ll be endless more about cybersecurity, homeland security and sorting out sordid allegations about mobile-phone system licensing in Iraq-wireless and high-tech policy-making likely will come to a screeching halt next year. Some critics say we’re already there. However, the Bush administration has promised to issue two spectrum reports in 2004.
“I think it’s a good-news, bad-news story for wireless,” said Rudy Baca, a wireless analyst for the Precursor Group, an independent research firm.
The good news, says Baca, is federal policy makers will largely leave industry alone next year. “The bad news is states are positioning to move into that regulatory void,” said Baca.
Even though Congress this year failed to pass relocation-fund legislation so essential to securing military frequencies for third-generation wireless systems and a bill banning Internet access taxes, lawmakers approved a sweeping anti-spam measure designed to protect the airwaves from the same digital trash that so litters cyberspace today. Hey, it’s a start.
Meantime, if the California Public Utilities Commission pushes through a bill of rights for telecom consumers, look for other states to follow suit. State attorneys general and trial lawyers show no sign of letting up on the wireless industry in 2004. Gen Xers and Gen Yers-the industry’s future-not only want wireless services and applications customized to their needs, they want it to work all the time, especially during personal crises. Got it?!
In 2004, the challenge again will be to survive and grow in an environment as hostile as it is unpredictable. It is a world of paradoxes, where risk can be at once essential and fatal. The margin for error is small, but sitting still is not an option. With profits elusive, but ultimately essential, wireless firms have no choice but to roll the dice and hold their breath. But which way to jump? Start with outsourcing.
The mass ability to manipulate 1s and 0s is shaking the foundation of contemporary communication, entertainment, government, business, education, health care, environmental protection, public safety, just about everything. The Digital Revolution and the Information Age-paradigm shifts made popular by the wired Internet-became truly transformational when the cord was cut. Wireless technology is the killer app for all time. Time, space and distance have been conquered. Managing it profitably is another story.
It is the beginning of the end of the old order, with little hint of what’s to replace it in 2004 and beyond. This is not about a single big bang, as some first theorized when the Internet caught fire, but more like a perpetual state of chaos-provoked by intermittent mini bangs-that will force wireless executives to earn their pay like no time before.
Wireless technology, already used by hundreds of millions of Americans, is becoming something different-part of something far bigger than itself or possibly anything else. This is as much an information revolution as a cultural revolution, one without borders or limits.
“Wireless is not a separate island anymore,” said Mark Lowenstein, managing director of Mobile Ecosystem, a wireless consulting firm.
It’s all about broadband, wireless style. Wireless connectivity has become a powerful magnet for Silicon Valley and Hollywood.
Where is it all headed in 2004 and beyond? Hard to say. There are as many possibilities as potential pitfalls. One hopeful sign is high-tech initial public offerings will return to Wall Street in 2004. Another bubble in the making or some good bets?
Be sure to bring your dancing shoes. Verizon Wireless, Cingular Wireless L.L.C., AT&T Wireless Services Inc., Sprint PCS, Nextel Communications Inc. and T-Mobile USA will continue to talk mergers in 2004, and may even try to do one or two.
Where will Justice Department antitrust lawyers draw the line?
“At most, we think they will allow two big deals,” said David Kaut, regulatory analyst at Legg Mason.
Kaut said the Federal Communications Commission’s ruling on how to fix interference caused by Nextel Communications Inc. to 800 MHz public-safety radio systems will help shed more light on the wireless carrier’s place in industry’s future. Likewise, he said activity in 2004 by NextWave Telecom Inc. could signal to what extent, if any, the carrier’s carrier experiment will impact the wireless market.
In 2004, the traditional industry structure may come under further pressure from disruptive sources. For sure, services and products seem to be undergoing metamorphoses of sorts.
Is it a phone or a camera or an organizer or a computer or a game-player or a gambling lever or a video player or an MP3 or a global positioning system receiver or even a credit card? Who needs a wallet? Wireless technology is all those things and potentially lots more. Voice, today’s calling card for industry, will carry wireless operators only so far. There simply is no future without data. Executives will never be content without content.
More head-scratching time in 2004. What will make money? What does the consumer want? And just who is the consumer? How will mobile-phone carriers retain existing customers and attract new ones now that local number portability is in effect? The sky didn’t fall Nov. 24. More likely, migration of subscribers among wireless carriers will be gradual and thereby be less of a shock to the wireless system. That’s not what Verizon Wireless, the No. 1 mobile-phone operator, was counting on.
If that’s all wireless executives had to worry about, life would be a piece of cake.
There are those confounding technology issues to grapple with.
The CDMA2000 vs. W-CDMA debate will continue to rage here and overseas. It is a global market after all. Where do OFDM and UMTS-TDD fit in? We know TD-SCDMA has a home somewhere in China, whose largely unwired land of 1.3 billion people make it the mother of all mobile-phone markets.
Motorola Inc., Qualcomm Inc., Lucent Technologies Inc., Nokia Corp. and Nortel Networks Ltd. are all betting on emerging markets. Look out for Samsung Corp.
In the operating system space, Microsoft Corp., Symbian, PalmSource and now Linux OS-and the software they accommodate-will continue to duke it out for market share in 2004.
Billions of dollars are riding on the right or wrong decision by wireless executives. The decisions can’t be made in a vacuum either.
For example, there are Wi-Fi and WiMax to worry about. But not so fast. “2004 is too early for WiMax,” said Andy Seybold, a leading wireless industry expert.
Don’t forget Bluetooth for that matter. Even ultra-wideband will be a factor if proponents can ever decide on a standard. Oh, that’s only the beginning. Mesh networks, ad hoc networks, smart antennas, cognitive radios-long off the drawing board-are percolating in tech labs and headed to market. Will VoIP crash the party in 2004? By all indications, the party has begun. Good luck trying to figure out universal service in 2004.
Maybe the lost-in-space technology-mobile satellite service-will have better luck on terra firma. But MSS will have to withstand court challenges in 2004 to satellite licenses and the FCC’s Orwellian-sounding regulatory gift to licensees known as an ancillary terrestrial component, or ATC.
Cellular pioneer Craig McCaw, a major MSS player, appears ready to pivot and return to less grandiose entrepreneurial pursuits in fixed-wireless broadband in 2004. Land-based, that
is.
Most likely the Big Six won’t be alone at the dance. Some experts suggest mobile-phone carriers can expect a tap on the shoulder by a regional Bell telephone company or a long-distance carrier or cable TV operator.
“You’re likely to see a lot of companies in the ecosystem get positioned,” said Richard Siber, partner, communications and high-tech group at Accenture. Yet, he cautioned, “There are so many wild cards.”
Siber predicted more energy would be directed toward service delivery platforms in 2004.
Mobile virtual network operators could begin to be a bigger factor next year, experts say.
Given all the disruption and uncertainty, perhaps 3G will come to stand for Three Guesses. Indeed, by the time there’s a legislative fix for 3G spectrum and service rollout, we’ll be well on our way to 4G.
Lowenstein sees all this boiling down to a fierce battle for the in-building business. And he believes wireless will be right there.
Wireless execs will have to be good money managers in 2004. In addition to business decisions, there will be federal mandates-pesky as they are costly-to continue to worry about. The FCC will be doing more next year than just overseeing LNP implementation. The agency will continue to monitor the rollout of enhanced 911, hearing-aid compatibility, lingering digital wiretap issues, priority access service and others.
With wireless firms fighting for their lives and increasingly taking shots at each other, Steve Largent, new president of the Cellular Telecommunications & Internet Association, will be challenged to hold the mobile-phone industry together.
Has industry reached a point-20 years and 150 million subscribers later-where there is more that divides wireless carriers than unites them?
All that said, if you’re looking for a real window on the world in 2004, keep an eye on Korea.
