LAS VEGAS-The wireless industry has seen some major changes in the past few months, from Cingular Wireless L.L.C.’s launch of the world’s first HSDPA high-speed mobile data network to Sprint Nextel Corp.’s announcement to form a joint venture with several cable companies to the recent move by AT&T Inc. to acquire BellSouth Corp.
At last week’s CTIA Wireless 2006, Andy Seybold’s Wireless Data University took wireless novices and pros through those developments to a forward-looking industry overview.
By mid-2007, the United States will boast three high-speed nationwide networks run by Sprint Nextel, Cingular and Verizon Wireless. The jury is still out on T-Mobile USA Inc., although the carrier is expected to be a big player in the upcoming advanced wireless services spectrum auction later this summer. Sprint Nextel’s partnerships could lead to it being a big auction player, too, commented Jim Hobbs of Outlook 4Mobility. “With all the partners Sprint is taking on, it makes you wonder when they might run out of spectrum.”
However, the speakers noted, the wireless industry is one that thrives on hype, and the much-touted 3G networks are no exception. Seybold said that in testing done by Outlook 4Mobility, networks from GPRS and EDGE to CDMA2000 1x EV-DO and HSDPA showed real-world speeds significantly slower than the speeds touted by the carriers, and speeds are even slower for uploads than for downloads.
However, Seybold added, data speeds are expected to increase in 2007 and 2008, and uplink speeds as well as downlink speeds should improve. And, he noted, since 3G network speeds are comparable, carriers won’t be able to depend on speed as a selling point-they’ll have to turn to other things, such as content and applications, to differentiate their services.
But the wireless industry still has very little idea of how much customers are willing to pay for various types of content. It is also unclear how much consumers are willing to spend on their total telecom budget, Hobbs noted, although he said that figure likely will become clear as companies such as AT&T and Verizon Wireless pursue those dollars.
Part of the strategy for competition includes mobile virtual network operators and affinity marketing to the extent that new branded handsets are likely to come from content companies such as Walt Disney Co., ESPN or the network operators themselves, instead of traditional device vendors. Related to brands, Seybold added that he thought it was a shame that the new brand Cingular worked so hard to build will be subsumed by the old AT&T brand.
“I guess we’re going back to old and stodgy,” Seybold said.
Among the trends likely to become realities, Hobbs predicted that the industry will begin to see increased competition for spectrum as various industries focus on convergence, and an evolution from bundles that merely put multiple services on one bill to integrated and hybrid services that make use of multiple technologies. Economies of scope and scale matter, Hobbs noted, and a la carte pricing for broadband wireless-dependent services such as video and music are likely to move toward flat-rate pricing that customers have come to expect through their experiences with the Internet.
