CHICAGO-The NXTcomm 2007 conference offered a glimpse into a bright telecom future in which mobility and convergence are a key component, with new networks and new services evolving designed to change consumers’ lives as well as offer new revenue opportunities to the companies that pursue such avenues.
Wireless is seen as a crucial advantage in telecom companies’ competitive battles with cable, since most cable companies are only beginning to explore adding mobile to their bundle of services-with the major operators in a joint venture with Sprint Nextel Corp.
Telecom vendors will need to offer unique wireless services to entice new subscribers-rather than simply bundling wireless service with other telecom offerings, according to a panel of speakers at a Digital Hollywood session during the pre-show conferences at NXTcomm.
Wireless is a “very unique” part of multi-play packages, and customers respond at different levels of interest depending on whether they are offered wireless as part of their bundle, according to Vince Vittore, senior analyst with the Yankee Group. He noted that cable operators, though still behind telcos as the preferred company through which customers want to buy a communications service bundle, are catching up, and he said he expects that within the next three to four years consumers will be equally comfortable buying a bundle from a cable company.
Customers who bundle are most interested in a single bill and a price discount on services, Vittore said-however, he noted, broadband customers tend to view bundling as a positive thing that moves them into a higher tier of service, but wireless customers remain skeptical.
“A lot of people don’t necessarily believe that they’re going to buy mobility just because it’s part of a package,” Vittore said. Wireless customers, he added, are much more concerned about issues such as network coverage and quality than whether the service is offered as part of a bundle.
Panelists urged the audience to explore applications, such as caller identification over the television, as ways to add value and differentiation to their services-and possibly as a way to justify price increases rather than continued discounts on bundled services. Other applications likely to be offered by service providers-
either directly to consumers, or to companies who then can extend the offer to customers-include home health monitoring, home security monitoring applications and energy use monitoring.
WiMAX’s shadow
Some of those new services may come with the advent of WiMAX, which Sprint Nextel had plenty to say about. The technology, gaining momentum domestically and globally, will serve to “mobilize the Internet” in a way the voice-centric networks of cellular could never do, according to Barry West, president of Sprint Nextel’s 4G business unit.
In a speech to attendees of the WiMAX Strategies conference, West envisioned a world where a powerful, reliable, low-operatingcost WiMAX data network would have the same growth-spurring effect as the introduction of cellular technology-as long as the service was affordable and usable. Indeed, West said he expects the same growth curve for WiMAX as for the early days of cellular, particularly as WiMAX becomes embedded in a variety of devices such as gaming gadgets and digital cameras.
However, it’s not the performance of WiMAX that worries West-it’s the challenges to backoffice systems that come hand-inhand, such as verifying and charging users for what they actually use. “I’m worried about the back-office, I worry about new mechanisms for fraud,” he said. “We’re working on all of that stuff now.”
Did someone say “iPhone?”
Of course, the conference couldn’t go without speculation and hints about the upcoming launch of the Apple Inc. iPhone.
AT&T Inc. CEO and Chairman Randall Stephenson talked up the highly anticipated iPhone in his opening keynote address as an example of AT&T’s commitment to a strategy of wireless-centric innovation. He noted that the device will work both on AT&T Mobility’s EDGE and Wi-Fi networks. In gearing up for the imminent launch of the iPhone, Stephenson said AT&T is “hiring and training hundreds of employees to handle the rush” as well as working to ensure that the “best network experience is available from day one.”
During a press conference following his keynote address, Verizon Communication Inc.’s Ivan Seidenberg was questioned about the potential impact of the iPhone on Verizon Wireless. Seidenberg said the company expects the device to stimulate the entire wireless space. He said the company believes it would hold its own against the exclusive offer of the much-anticipated device.
Seidenberg noted that Verizon Wireless has consistently led the industry in terms of growth and “we don’t have any reason to believe that’s going to change” with the advent of the iPhone.
AT&T execs have repeatedly referred to the iPhone as a “gamechanging device,” but Seidenberg said that the high-priced entrant doesn’t change Verizon Wireless’ game plan for segmenting the market and attracting users with various handset price points and packages.
“The burden is on them to prove that the market will change,” Seidenberg said.
More from AT&T
AT&T did have other things to talk about, however, as it launched its first IMS application, Video Share, in three markets last week. The service, which allows live oneway video feeds to accompany voice calls, will roll out to all AT&T Mobility 3G markets in late July.
Stephenson said the initial launch markets include Dallas, Atlanta and San Antonio. Stephenson added that the service wouldn’t be a wireless-only feature for long.
“Expect us to quickly reach the other two screens,” Stephenson said: the television and the personal computer screens, that is.
