The future of wireless cellular
The future of wireless is green???
At a decidedly lackluster hockey game last night, I had the pleasure of talking to my favorite telecommunications engineers. I won’t mention his name or his organization since it wasn’t an official interview, but I want to pass on some of his ideas that struck home with me on how the wireless industry will change in the next 2-3 years.
In summary, the conversation was about how things today may not be what they appear. And for an industry that seems to move at a glacial pace sometimes, change is happening and faster than most of us realize.
No long term contracts
One of the biggest complaints with many consumers these days is the issue of cellular contracts. Many people don’t understand that when you sign up for a 2-3 year contract in order to get a Blackberry or IPhone for $99, you are actually signing 2 documents blended into one price plan. The first is the obvious one, a month-to-month wireless contract, and the other is basically a loan/lease agreement to offset the cost of your device that should have cost you somewhere between $500-1500. This model was introduced back in the days when a cell phone really did cost over $3000 and nobody could afford one. In the very near future the major carriers will be getting you to sign two separate documents. The first will be for your voice/data plan, and the second document will be a separate lease agreement for the device if you choose to go that way. Why, well its simple, people are replacing their devices faster than the 24-36 month contract terms and feel locked in by the longer contract and hate the “buy out”. The new model is basically a “buy in” arrangement that is similar to what is done in Europe today. If you want the subsidy you will be able to still get it, but your base plan won’t have the up-charge built in to cover any subsidies. That means for most of us, our voice/data plans will actually cost about $10 less/month. Great news for consumers generally and those of us who change our devices regularly.
One SIM, any device
This isn’t really new, but the carriers are realizing that people HATE having multiple plans, numbers etc between devices (IPAD/IPhone/House phone). The idea is that carriers will basically sell you the SIM and you customize a-la-carte what you need on it in terms of options dependent on your preferred device. Want a different phone for a fancy night out, get the latest Nokia. Heading out to Ski, get a device with an emergency transpoder, GPS and weather alerts. Carrier lock down and lock in are finally going away. You will be free to move your SIM to the device of your choice.
Unlicensed Mobile Access or UMA
Again not a new one, but one feature that will be standard in all handsets. UMA is sort of the holy grail for consumers who are looking to downsize their bill. The idea is you use your internet bandwidth instead of the carrier bandwidth when at home or work. By moving the voice call to IP, carriers forgo some air-time minutes. In exchange the carrier can reduce their build out costs to ensure penetration in your neighborhood or building. You the consumer are essentially providing the network. Remember minutes are not where carriers make money, subscriptions and value-add are. It is also important to realize that from a carrier perspective, your home (think evenings and weekends) and work (PBX) are not money makers today so why worry about it. On a side note, it was made clear to me that the easiest way to avoid ANY roaming fees when traveling was to disable your GSM modem before leaving the country. In this way, the carrier is unaware that you are outside the country as your last known location was on their network. In so doing the carrier can’t disable UMA allowing you to use UMA for voice/data during the duration of your trip. Unfortunately, if you do turn on the GSM modem at any point, the carrier must disable UMA because of jurisdictional and legislative issues. It’s a don’t know, don’t tell policy.
IP everywhere
Carriers are rushing to upgrade their back-end infrastructure to pure IP offerings. This simplifies their networks, reduces the complexity of introducing new technologies and devices and gives them the option to deliver additional services. We know that it is tough to compete with free VoIP today. So why compete when it just becomes a service on your network. Instead of competing on services that you can’t effectively compete, offer the pipe and charge for premium services on top of it. In that way they get the revenue from the data plan, even if you do choose to use Skype. Again, this is a recognition that minutes are not where the money is.
One device, one access point, one service – The ultimate bundle
The consistent deployment of these four pillars ultimately leads to this one point. The goal of the wireless carrier is to get you off of any land line services. The future of devices is that your phone will act as a WiFi hotspot to the network. That means that when you are in your car, your car will be IP enabled because it can get data out through your phone’s data connection. When you are at home your home phone will not be plugged into the wall but a box that wirelessly links to your cell. Even your TV will download its content via IP service, which again, is just your phone.
We are not far from that reality today. In the discussions last night we discussed how more people are going to Apple Itunes Store for movie and TV show rentals. How some carriers can offer cellular data hybrid repeaters that allow you to use your home cordless phone and provide a WiFi hotspot today. How cars come equipped with GPS units that talk to each other and can download content like real time traffic statistics, route maps, music or other.
The limiting factor today isn’t the technology, the network or the ideas. It’s the data plans, the lack of integration and the old business models.
