Service Providers Optimistic About Mobile IP Plans; Market Issues Cited as Main Challenge to Deployment in Sage Research Study

Business Wire, Dec 6, 2001

Business/Technology Editors

NATICK, Mass.--(BUSINESS WIRE)--Dec. 6, 2001

A new study of service providers in North America, Europe and Latin America conducted by Sage Research reveals optimism about mobile IP services while identifying significant deployment challenges. "Most of the wireless service providers in this study have fairly aggressive plans to deploy mobile IP services and applications in the near future," notes Chris Neal, Project Manager. "Across all regions, most of these service providers are cautiously optimistic about mobile IP services. They expect significant revenue growth from mobile IP services, plan to increase their currently modest infrastructure investments, and anticipate spending more on development efforts such as application development, integration and testing."

The research also shows that service providers see some significant roadblocks to successful deployment of mobile IP services. "Unquestionably, these service providers consider security as both the most important and most challenging capability necessary for the success of mobile IP services, " notes Neal. "The vast majority want to offer security guarantees to their customers." Market environment issues, however, are perceived as the single most important challenge to mobile IP deployment, ranking higher than technology or infrastructure issues. "Unfortunately, despite the importance of these market issues--such as regulatory, interoperability, spectrum, and standards issues--they are largely outside the control of the service providers," according to Neal.

Further, the study shows that the service providers are most likely to pay equipment premiums for capabilities for which they themselves can charge premiums. The report details their willingness to pay premiums for value-added service capabilities including VPN support, location-based services and unified messaging, among others. This represents an enormous opportunity for mobile infrastructure vendors who can help service providers deliver those services that they perceive to be critical for successful mobile IP deployment.

The study also confirms the growing importance of GSM-based standards for migration to next generation IP networks. "Even service providers in North America and Latin America, where TDMA and CDMA-based networks have been the norm, plan to support GPRS (21% and 36%, respectively) and W-CDMA (28% and 32%, respectively) next generation standards more frequently than we expected," according to Neal.

For this study, professionals from a total of 364 service providers from North America, Europe, and Latin America, were surveyed about their plans, expectations, requirements and perceived challenges to mobile IP service deployment. All participating service providers currently or plan to provide mobile voice and/or data services, or content delivery services for mobile data.

For more information about the series of reports, "Mobile IP Opportunities and Challenges," please contact Sage Research at (508) 655-5400 or by email at reports@sageresearch.com. Three separate reports are available for North America, Europe, and Latin America.

About Sage Research

Sage Research, Inc. is a full-service market research firm providing demand-side research to IT vendors and Service Providers. The firm combines expertise in both qualitative and quantitative research methods with an in-depth knowledge of technology markets. Since 1993, Sage Research has delivered objective and reliable data, insightful analysis, and actionable recommendations to industry leaders and innovative start-ups. For more information, visit www.sageresearch.com.