Blood on the streets

America's Network,  March 1, 2004  by Kirk Laughlin

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Wireless service providers are gaining both might and girth. They are penetrating more deeply into fixed-line strongholds by getting more people to dump their legacy phones, tightening their grip on the mobile enterprise and taking aggressive steps to repair chronic weaknesses in cell coverage.

The big play for carriers still, however, remains wireless data. It has to succeed and 2004 is its estimated year of arrival. The Wireless 2004 (CTIA) event this month in Atlanta is certain to serve as a reminder of what's at stake. Billions have been spent on network infrastructure. Billions more have been shelled out for licenses. That partly explains why wireless data carries a certain "can't miss" dynamism. The argument goes like this: cellular carriers will score big on data because they have studied it, smartly invested in it, and crafted their business plans around exploiting that great, insatiable hunger for packet services.

Peel back the velvet curtain surrounding the glitzy 3GSM show in Cannes last month and what is revealed is a more telling picture of the drama in store for U.S. wireless: moving to 3G and beyond is a journey plagued with conflict and risk. A festering rift between handset makers and mobile carriers broke out into the open at 3GSM largely because the bleeding edge of mobile technology occasionally bleeds poison on carriers who want things (like handsets, softswitches and application software) to work as promised.

The fixed-line community knows about those reliability issues. In fact, reliability is the cornerstone of a determined movement by fixed-line operators to halt incursions by wireless carriers into their most coveted domains.

Those domains are mainly in and around corporate campuses, universities and other concentrations of limited mobility end-users. It is increasingly apparent that this is where the real battleground is. The sudden increase of suppliers promising seamless roaming between WLANs and cellular networks, and creation of voice over WLAN solutions, reflects a serious effort by fixed-line operators to utilize wireless technologies in a way that satisfies their core customers.

Hong Lu, CEO of the thriving wireless local loop (WLL) equipment maker UTStarcom, has communicated to me on more than one occasion that service providers must be shown with one simple thing--a means to make money. Now.

3G networks and services may be dazzling, but the payoff is still uncertain. What is more certain is that technologies like Wi-Fi, WiMax and WLL are drawing interest from fixed-line carriers who see a roadmap to nearer-term profit making.

The fixed-line vs. cellular battleground is going to take many different shapes because, for one thing, a number of wireless carriers are owned by RBOCs. Such associations, as history demonstrates, does not negate the possibility of sales channel overlap and misappropriation of funding and resources. On the ground coordination and astute development of bundling programs is more critical than ever.

The real test for wireless carriers has less to do with innovation, often cited as the principle criteria for growth, and more to do with strategic planning and execution. And, of course, reliability still counts for something.

COPYRIGHT 2004 Questex Media Group, Inc.
COPYRIGHT 2008 Gale, Cengage Learning