inCode Reveals Ten Wireless Predictions for 2005

Jan 28, 2005

inCode, a wireless technology and business consulting firm, has announced its Top 10 predictions about the European and global wireless market in 2005:

1. Wireless Gets into the Multimedia and Consumer Product Bundle
Strong multimedia and cable TV brands must have wireless to round out their service bundles to customers. In addition, big consumer brands need wireless to enhance their customer loyalty programs. To date, Europe leads the way with Mobile Virtual Network Operator (MVNO) relationships — in which wireless operators provide turnkey, private-labeled wireless services for major brands. In 2005 that trend continues with several huge multimedia companies entering the wireless market by mid-year and dozens of other companies getting ready to follow suit. Bundling is the initial step toward true wireline and wireless convergence across all-IP networks—about five years away. Eventually, Voice-over-Internet Protocol (VoIP) will support delivery of all voice services.

2. The Killer App is Dead, Differentiated Voice Lives
In a highly penetrated and segmented market, a single killer application doesn't exist and carriers should stop looking for it. In 2005, network operators finally begin to offer different classes of voice services, including priority communications, and one-to-many or many-to-many services, such as network-based cellular conferencing, group voice messaging and more. Enterprises and consumers value better, faster communications by paying for tiered, premium voice services. The trend begins in Europe, but rapidly pops up in North America, Asia and Latin America as well. No new wireless voice services have appeared since the introduction of commercial push-to-talk services and cellular voice mail in the 1980s. These fresh service options surprise and delight subscribers, bringing new revenue streams to carriers.

3. Integration of Broadband Devices Takes Off
Wireless carriers are making broadband technology choices from the available options, including W-CDMA, 1xEV-DO/DV, TDS-CDMA, Flash-OFDM and WiMax. Some of these are personal (Bluetooth and infrared); others local (various flavors of 802.11, fixed wireless and WiMax); and the remainder wide area (UMTS, EV-DO, Flash-OFDM, HSDPA and UMTS-TD). Manufacturers will begin to integrate devices so they will work across two or more types of networks; devices bridging cellular and WiFi networks will be first. However, WiFi data roaming won't take off to any meaningful degree. Carriers initially protect their networks and their investments in technologies by refusing to let other carriers' customers on their networks, taking us a giant step backwards in terms of the advance of roaming.

4. Carriers Battle to Control Content, with Trends Towards Recorded Programs
High-performance phones and increased over-the-air throughput speeds are supporting a richer set of downloadable content. A new battleground is emerging over who controls the value of this content, and carriers will have to fend off non-traditional players. Equipment vendors try to directly attack new revenue streams - for example, Apple and Motorola have teamed up to deliver music content to iPods. This new content battleground will intensify in 2005 with new services at its heart. In addition, the trend toward viewing recorded versus live programs continues in the wireless environment.

5. Taking Wireless Seriously, Enterprises Begin to Demand Service Quality
Enterprise CIOs finally begin to mobilize their organizations as device and network performance meet expectations and enterprise wireless applications continue to emerge. With number transparency prevalent, enterprises apply wireline cost reduction strategies to their wireless spend. Corporations move big blocks of employee phone numbers to the carrier that best meets their budget and mobility needs. Using this volume business as leverage, they demand service-level agreements (SLAs) that ensure quality of service, not just quality of the network providing it. Carriers must accept these SLA demands or prepare to lose high-value customers. Opportunities arise for enterprise network management companies that develop applications enabling enterprises to measure SLA compliance.

6. The Battle for Customers Moves from the Highway to the Hallway
Increased traffic has degraded overall network quality, and subscribers are far less tolerant of dropped calls. In-building coverage becomes a big differentiator for corporate and consumer wireless users. Customer collateral material begins to include coverage information on the square footage of key indoor spaces—such as large office buildings, shopping malls, and stadiums—in addition to the square miles of highways and motorways in the service area. Enterprises begin to deploy dual-mode 802.11/GSM devices as a means to save cellular costs and improve their own in-building wireless coverage.

7. Spam Spares Wireless No Longer
The wireless industry focuses aggressively on protecting subscribers from handset spam—limited and out of the limelight until now. However, several high-profile spamming incidents will occur next year. Wireless carriers counterpunch with spam-stopping technologies and policies that could ultimately help clear the way for permission-based, mobile marketing by major brands.

8. Adult Entertainment Makes its Mark
The operator's need for increased ARPU will outstrip the pace of implementation of effective controls to block the delivery of unsuitable content to under-age subscribers. This raises the spectre of Legislation to protect minors from unsolicited or inappropriate content.

9. The Role of Wireless in Public Safety Takes Center Stage
Behind-the-scenes issues, including priority access for first responders, network interoperability and reliability, spectrum requirements for public safety, and critical infrastructure concerns move to the forefront. In the United Kingdom, Germany, the Netherlands, and Scandinavian countries, momentum slowly is gaining for a wireless E112 emergency dispatch system similar to E911 in the United States. In the interests of homeland security, governments will move closer to allowing Radio-Frequency Identification (RFID) tags on containers that pass through customs at international ports and national borders. Use of these electronic seals that detect tampering also would speed container movement.

10. Who's Who on Wireless - Directory Listing Gets a Wobbly Start, but Wins Over Small Businesses
In the US, opposition to a full-blown white pages directory of wireless subscribers is widespread and strong with Verizon leading the charge. Based on privacy and spam concerns, it's unlikely that the project will get far. However, a ‘Yellow Pages' cellular directory--covering home-based and small businesses--proves popular and profitable first of all in America but then gains support in Europe.