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Insights from CTIA 2012

I have recently returned from sampling the finest of New Orleans hospitality and hanging out with my wireless friends at the CTIA Wireless 2012 conference.  CTIA provides great insights into the wireless industry in one of the world’s biggest markets and technology superpower – the USA.  It’s hard not to compare CTIA with the recent Mobile World Congress in Barcelona.  While many of the things that I observed at MWC in February were equally visible at CTIA, I also observed a number of different items, or different slants on where the mobile industry was heading.  I am always amazed and overwhelmed at just how big the mobile ecosystem and economy are.  Unlike MWC, the CTIA show floor had a very healthy representation from all parts of the mobile ecosystem – everything from device accessories, to back-up power solutions, to applications, to CNBC broadcasting live, and many things that I couldn’t understand.  It makes you realize just how big this industry is and how innovation across all parts of the value chain have fueled this phenomenon.

The U.S. wireless industry feels like it is back on top.  Once the leader in innovation and customer demand, U.S. mobile lost much of that position over the last decade as it battled amongst itself on competing 3G technologies.  The U.S. now has 105% mobile penetration and 64% of the world’s LTE subscribers.  Not to mention that innovation in mobile has shifted back to the U.S., with the likes of industry shaping giants like Apple, Google and Facebook calling the U.S. home.  While MWC was all about embracing the arrival of LTE, American carriers are declaring LTE hegemony and looking beyond their technical success to how they can drive true business value from LTE.   But, this regained position at the top table is not without challenges.  Every executive that took the stage pleaded to anyone who would listen with 3 little words:  “more spectrum … please.”  Executives spoke of the huge impact that the huge impact that they are having on the U.S. economy and its citizens’ lifestyle and wellbeing.  Much of which they feel will not be sustainable without new spectrum being made available to accommodate mobile users insatiable demand for data connectivity.  More spectrum and approval on current deals (e.g., Verizon and Comcast) and future deals (T-Mobile-Metro PCS? or AT&T-Leap?) are crucial to the strategies of incumbent operators.  I expect industry lobbying to be elevated to election class levels over the coming months and years.

We had a very interesting discussion with the audience during my mobile cloud panel that the challenge from OTTs threatens to relegate mobile operators to “dumb pipes”, similar to the fate of their wireline cousins.  While this continues to be one of the industry’s hot topic of conversation, there is growing concern that if the OTT-operator economic model isn’t fixed to be more equitable than the wireless bubble may pop.  According to a recent study from the Reputation Institute, the reputation of the wireless industry has dropped to the lowest of any major industry, even below banks and cable operators.  Executives were calling for industry-wide solutions to build trust and common privacy practices and standard platforms to ensure the long term viability of the entire mobile ecosystem.

The future is definitely mobile, but probably quite different than the industry would like.  Mobile operators continue to search for the next thing that is going to augment their declining revenues and avoid them becoming “dumb pipes.”  AT&T announced its new Digital Life home security offer, and there were many demonstrations and discussions around M2M (machine-to-machine), enterprise solutions, and BYOD (bring your own device) as the next new thing.  And of course mobile cloud.  The world of macro-cellular seems to be coming to an end and everyone is talking of heterogeneous networks that integrate these new access methods for better coverage and customer experience.  The industry would still like to put a phone in your wallet, making mobile payments all your really need.  Leading this new world of mobile payments seems to be shifting away from smaller, start-ups to the major credit cards and banks.  However, given the continued fragmentation, complexity and questionable customer value in many of these schemes it is still likely to be some time before we leave our wallets at home.

Given the tremendous changes that we have already seen this year, I expect a lot more to happen by the time the mobile industry reconvenes in Barcelona and Las Vegas in 2013.  In the meantime, Kelly Ahuja and Kit Beall will explain how the capabilities of today’s advanced mobile networks have forever changed the way we communicate, collaborate, and entertain by helping enable new devices, new applications, and new business models.

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