(from our Atlanta desk)
I attended the Wireless Technology Forum, Atlanta meeting on 18 Nov. The topic was “2011 Analyst Outlook” – an excellent one as we all are very curious to know what comes in 2011 in Wireless. Here are the notes from the meeting :
There was an excellent lineup of speakers –
Keynote : “Prospects for LTE in 2011″ by Steven Leonard, Regional Director, Data Sales, Verizon Wireless
- Phil Hendrix, Principal Analyst, Institute for Mobile Markets Research (or IMMR)
– Jorge Fuenzalida, Vice President, Strategy and Technology Group, inCode Telecom Group (now part of Ericsson)
- Jeremy Schneider, Principal, Telecommunications, McKinsey & Company, Inc.
- Robert Prudhomme, Vice President, Client Services, Telecom Practice, The Nielsen Company
Moderator : Gerry Purdy, Principal Analyst, MobileTrax
Steven Leonard (Verizon Wireless) on LTE in 2011 :-
LTE offers 10 times faster speed compared to 3G networks. Verizon will have LTE in 38 markets by 2011. Verizon has the valuable 700 MHz spectrum which allows high speed and data accuracy in network transmission. LTE utilizes the MIMO technology. MIMO (Multiple Input, Multiple Output) is a technology that increases in data throughput and link range without additional bandwidth or transmit power.
Another key aspect of 2011 is the growth of Tablets and accompanying data demands. 181% growth expected in Tablet usage in 2011 over this year. Verizon is the only carrier with contiguous 4G spectrum in USA (AT&T may disagree : )
Lte is 3.5 times faster than CDMA in how far signal will travel without diluting. It offers Latency near 30 ms where earlier it was 150 ms.
Verizon 4G leadership (per Steven) :-
– Joint innovation lab
– Open devl
– Verizon developer community
– LTE innovation center
– M2M management center in partnership with Qualcomm
Note : M2M or Machine-to-Machine is the new wireless industry developing around putting wireless chips in home appliances, hospital equipment and other such non telecom functions).
Verizon Launch mkt this year – Athens and Atlanta are included
Wireless broadband features in LTE include :-
1 Advanced applications :- like Entertainment and Music
2 Innovative devices
3 Location agnostic : Whereever you are availability
As per Steven, Verizon 4g network rollout will be completed in 2013 in the USA.
Phil Hendrix (IMMR) :-
Phil gave a presentation on Mobile Commerce, an area which is rapidly evolving. The most happening event in USA on Mobile Commerce has to do with NFC phone proliferation expected in 2011 with Google Nexus S and Apple iPhone – both NFC enabled phones coming out potentially as per reports.
As per Phil, Mobile Commerce has three perspectives :-
– Consumers : mobile shopping
– Brands : mobile advertising
– Retailers : m-commerce
8 dimensions which together constitute mobile commerce:-
– Mobile Shopping
– Mobile Funds Transfer
– Mobile Advertising
– Mobile Rewards
– Mobile Coupons
– Mobile Booking
– Mobile Offers
– Mobile Payments
Today we are only in the initial stages of Mobile Commerce.
Certain trends are accelerating Mobile Commerce. These Accelerators include :-
– Hyper Local sensitivity – what is around us
– Social Media
– Yield Management
– Supply Chain integration
– Big Data
Jorge Fuenzalida (inCode) :-
inCode Telecom Group, the telecom strategy consulting firm, has been acquired by Ericsson recently. inCode is famous for its “top 10 predictions” in wireless every year. Jorge said that these are not finalized for 2011 but offered a Sneak preview of the top 10 :-
1) Over the Top goes over the top (in other words, over the top video/OTT or IPTV accelerates and everything in video goes online)
2009-Netflix becoming very popular – CPE based OTT
2011-all content goes online eg Google TV or other such offerings
2) Tablet rush – in 2011 it will overtake netbooks
3) The new Gold Rush in 2011- wireless rural broadband – due to government stimulus
Well said, Jorge.
Jeremy Schneider (McKinsey) :-
Core wireless has matured. Revenue growth has slowed in voice and messaging
What is next then? Three predictions (since it is the day of 3 predictions from all analysts : ) :-
1) Data will grow much more than what most analysts are calling for. McKinsey thinks 17 times growth from 2009 to 2012 in mobile data
McKinsey thinks that even this number is relatively conservative. They think it could be 25 times growth by 2012.
Tablets, mobile video and broader consumer adoption of mobile browsing will drive mobile data growth.
2) Enterprise will outstrip Consumer in wireless (this is surprising as per me as consumer has been the bigger driver of smartphone data via apps so far)
Enterprise mobility will enable employee mobility etc
– 6 times higher willingness to pay in enterprise consider to consumer
– big market. M2M sensors estimates keep rising on a daily basis
– many verticals are ripe for innovation
Healthcare is particularly exciting in the M2M arena.
Healthcare will expand in 5 trillion dollars overall in 5 yrs. At current rates healthcare will be 30% of us GDP
* Remote Monitoring
* Remote Consultation
* Medication Management
* Health and Wellness
3) New directions in Application Architecture
– Data growth needs efficient network
* 30% time waiting on mobile browsing
– Platform independent tech like HTML5, JIL (Java Intermediate Language), WAC (Wholesale Application Community – the operator consortium), SNs (?)
– Delivered in the cloud (aha – Cloud Computing – we know it)
* Consumer – Large portions of iPhone apps already on the Amazon Cloud or EC2
* Enterprise – 40% savings by moving to cloud
Robert Prudhomme (Nielsen) :-
Growth has slowed in postpaid the USA. Prepaid is going well.
Only verizon and AT&T were able to get net adds in Pospaid this year. However, all of these came at the expense of T-Mobile or Sprint (no wonder, with 80%+ market penetration for wireless in USA, you can only get new customers by poaching from your competitors)
AT&T is doing well with its Connected Devices business, however a concern is that Standards and Business models around these new devices are not clear and their financial worth is not known.
The erstwhile prepaid kings, the carriers Cricket and Metro are suffering as the Big-4 wireless operators are getting most of the prepaid now.
Sprint is competing on pricing while it tries to retain its customers who are churning fast. The No 1 reason to win a customer now is promotion and pricing. This means price wars as are seen in $50 all you can eat plans from some carriers. Now, Sprint is even undercutting T-Mobile in pricing. (my conjecture is that the profit margin in $50 all you can eat plan is really next to nothing).
Of course wireless has lot of bright areas too on the premium side – mainly Record smartphone sales. On premium side, smartphone (driven by top smartphones like iPhone and Android phone) sales are driving fast growth.
Wireless Tablets remains an unpredictable play for the operators. This is depicted by the fact that only 1/10th of iPad tablets sold are activated on the AT&T network. Rest are using WiFi or exported out of the country. (But AT&T still scores as it has a respectable nationwide WiFi network – of course free public WiFi for broadband customers is a customer retention strategy by carriers like AT&T and not really a revenue generator).
Smartphones are driving increases in App adoption (finally a direct reference to Apps)
– 59% smartphone owners download apps
– 9% feature phone owners download apps
AT&T – 74% postpaid net adds in last quarter are iPhone customers (did I get it right – 74% ?).
Interesting stat from Nielsen : -950,000 netadds lost from AT&T if they lost iPhone exclusivity per Nielsen estimates. In other words, with the impending Verizon iPhone and potentially on other carriers too, AT&T might loose almost 1 million net adds per quarter. A significant number but one AT&T is already planning for most likely.
In France and other European countries, when iPhone exclusivity ended with one carrier, Apple doubled their share or more in some cases. So one can conclude that the Apple stock price may be trading at a discount if its market share is about to rise (now let me run and buy some Apple stock.. : )
Overall an excellent discussion on the 2011 Outlook for US wireless by some Industry heavyweights in the Analyst world. Congratulations to the team at Wireless Technology Forum (Atlanta) and especially to Gerry Purdy of MobileTrax for putting together this awesome event.
November 22nd, 2010