Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from NPD Group’s Ross Rubin, Enderle Group’s Rob Enderle and more.
“So, what was the big buzz from [insert major tradeshow here]?” We’ve all gotten the question when returning from Barcelona, Cannes, Orlando, Atlanta or wherever. It’s a simple function of any buzz-driven industry.
Yet here in the quiet space between Mobile World Congress and CTIA, it’s worth thinking about the wireless networks buzz of years past. Of course, the “big buzz of years gone by” (my planned golden years nickname) need not be rehashed. We’re living it in the form of EV-DO Rev. A upgrades, HSPA launches, mobile WiMAX certifications, etc.
The undersized buzz, however, makes for a fun bit of reminiscing — you know, the topics that were on everyone’s lips a few years ago, but have since been squeezed out of vendor marketing. Why? Even when a technology doesn’t live up to the expectations surrounding it, it can still live on and still be useful. If nothing else, it can be useful as a cautionary tale, or a way of putting things into the proper perspective (i.e., where technologies can be successful, how they can or should be launched, how excited we need to be about them) as we head to Vegas at the end of the month.
What, then, are my favorites from years gone by and my expectation for 2008?
Push To Talk
Do you remember when Push to Talk (aka, Push to Talk over Cellular or PoC) was its own business model? When every wireless vendor — in an attempt to drive ARPU on par with Nextel — had a solution for delivering push to talk services over 2G and 3G networks? When an interest in the easy-to-understand application was enough to launch companies like Kodiak and Sonim? I do. But where is it today?
To be fair, the application has been widely deployed by operators large and small. Usage is an entirely different question. Perhaps more importantly, it’s no longer a standalone business. Just like the VCC (Voice Call Continuity) buzz that followed it, PoC is now positioned as part of a larger solution, just one application in an operator’s toolkit.
IMS
And, what’s the solution Push to Talk is, most often, positioned within? IMS. By supporting real-time applications across multiple access technologies while pulling in application supports like presence, the fit seemed obvious. Vendors even used their initial Push To Talk wins as proof of IMS momentum. It would be wrong to cast IMS and PoC in the same light. It would be even more wrong to call the buzz surrounding IMS “undersized.” Yet, a quick stroll through the show floor at Mobile World Congress gave the impression that operators were afraid of the term — or maybe even forgot about — this year.
After spending a lot of money selling operators on sometimes convoluted, sometimes funny service propositions that were either difficult to realize, difficult to monetize or just plain wacky, the pullback on messaging is understandable. Dig beneath the surface though, and the message is still there, particularly when looking forward to a future 4G, all-IP world, operators and vendors do see IMS playing a pivotal role in delivering voice and data applications.
Assuming that operators would make a quick jump to an entirely new network architecture based on questionable service economics was a clear mistake. Assuming that an inevitable — though slow — move to IP will grow the importance of IMS is a little easier to swallow.
Content charging
There was a time when “content charging” was used as shorthand for the concept of deep packet inspection (DPI). In reality, it was an explanation of how operators could leverage DPI to make money. By gaining insight into the user traffic running across their networks, the theory went, operators could squeeze added revenues out of their subscribers. The scenarios were intriguing: Web browsing charged differently from e-mail traffic; music streaming charged differently from peer-to-peer traffic; and service and performance tiers based on diverse price plans.
The rush to unlimited voice pricing in the U.S. makes it clear that mobile data will become more and more important, making these capabilities important. Yet the fact that operators are still capping traffic usage as a proxy for usage intelligence (i.e., if you’re using more than 5 GB of data, you must be a Slingbox user) tells you how deeply they’re being used.
Far short of the once lofty goals, content inspection tools are being used for something more akin to “shallow packet inspection,” providing insight into traffic amounts, usage duration, time of day, and traffic type — but not actually acting on them in a particularly granular way. Given the limited amount of mobile data running on 3G networks, it might simply be a case of not needing to take this step. And, it’s not as if subscribers really need a more complicated bill. That said, when operators begin to price data services aggressively or a real commitment to “open access” brings new and unpredictable applications onto operator networks, the need will materialize.
450 MHz
Back when major CDMA operators just beginning to plot their migrations to GSM and WCDMA, CDMA450 started capturing attention. I remember questioning the size of the opportunity, the amount of spectrum available and the fragmented nature of the spectrum. Right or wrong, then, other technologies jumped into the fray. We got FLASH-OFDM at 450 MHz. We got TD-CDMA at 450 MHz. We even got plans for GSM at 450 MHz.
Forgetting for a moment that T-Mobile Austria is returning its 450 MHz license, networks and services continue to get launched. The CDMA Development Group noted a boatload of CDMA450 devices (110+) and about as many operators offering or planning commercial CDMA450 services. And, the official subscriber count at the start of last year? 12 million people. For those 12 million people, the technology is undeniably important. It could become even more important if the prospect of globally harmonized spectrum at 450 – 470 MHz pans out, following the World Radiocommunication Conference (aka WRC) agreements reached last year.
Yet, in the broader wireless picture, it’s still a niche — a niche that, despite the growth of wireless services in emerging markets — is not enough to support the long-term viability of any standard if the rest of the market decides to move in another direction.
And the winner for 2008?
Against this backdrop, what’s likely to be the “little buzz that could” (my current nickname) of 2008? It will need to trace a fairly clear trajectory: lots of marketing focus this year, followed by relative success — often after rethinking or repositioning the technology — in the longer-term. Femtocells don’t count: the messaging has been consistently high for a few years now. LTE doesn’t count: it will take a while to develop, but the eventual success should be big. Mobile TV doesn’t count: success has been slowly growing and may require rethinking the technology as part of a broader service offer, but it’s definitely not new for 2008. This leaves one prime contender: Green.
Back in high-school I had a t-shirt that simply read “green.” The message was ambiguous (at least outside the Ivy League) and that’s what made it quirky and cool; you wouldn’t believe the number of dates I got just because of that shirt. Today, “green” has taken on a life of its own as the shorthand for environmental consciousness, and it has steadily crept into the sales story being told around wireless networks.
Where capacity and form factors were once the watchwords of co
mpetitive positioning, new metrics are taking on a life of their own: power consumption, energy-efficiency, carbon footprint. The year after Al Gore won a Nobel Peace Prize, the emergence of “Green Telecom” should surprise nobody. It is only partly about the environment and improving the world we live in. On a very basic level, advancements in energy efficiency and alternative network powering (solar, wind, sheep manure) help to keep an operator’s OpEx in check. On a more cynical level, energy efficient network kit should help operators and vendors alike get in front of potential, climate-focused regulations in the future. If you want to be socially conscious, consider sponsoring me in an upcoming charity bike ride. No, really (click here)!
However, do not fool yourself into thinking that a green telecom focus is fully about the environment. It’s just as much about business; and this is why it will evolve from a buzzword into an integral part of networks marketing and the way networks get built going forward.
Questions or comments about this column? Please e-mail Peter at pjarich@currentanalysis.com or RCR Wireless News at rcrwebhelp@crain.com.
