Wireless Trends

Hi all! I have not been as prolific in posting to my blog the past few weeks. I have been very busy with work (year-end stuff), school (several classes and dissertation work), and moving the family to our new home (money pit). Anyway, I’d like to share some thoughts with you on the industry.


Major trends

Major carriers continue to “tweak” their prepaid offerings. As a result of this, Leap and other prepaid focused carriers lost flow share. ARPU on the whole for the industry shows decline, although exploding demand for smart phone like devices continues to drive wireless data growth muting somewhat the voice ARPU declines. The wireline guys continue to show access line losses primarily driven by wireless substitution. The bright spot for this group is backhaul (of which they are the primary providers) and is expected to grow as more and more carriers commit to firm LTE (4G) deployment timelines. This is becoming more and more recognized as a necessity to support the exploding demand for mobile wireless data. Two other bright spots, in terms of growth, are the tower industry and data center ecosystem, both whose growth is indirectly driven by exploding mobile wireless data. As wireless carriers add a capacity to their 3G networks and begin the deployment of their 4G networks, they need to add equipment (antennas, tower top amplifiers, etc.) to the towers. Moreover, wireless data growth drives the need for routing equipment at the core and distribution layer of networks. The core routing equipment, as well as gateway equipment, is located in data centers. Data center space, power, and cooling needs are accelerating in synch with mobile wireless data adoption.

4G deployments (production and trial) are moving forward at a nice pace. VZ maintains it will have a number of large markets up and operational network year. Clearwire has launched additional markets with more planned. A significant number of carriers in the North America and abroad are conducting 4G trials, with LTE garnering most of the attention. The main driver for deployment and adoption of 4G by carriers is the explosive adoption of mobile wireless and the data usage that comes along with that. To provide a cost effective experience, carriers need faster networks that make better use of their available spectrum. 4G, and in particular, LTE, does this through a number of powerful techniques. The first is a new and improved modulation technique known as 64QAM. The second is the access technique known as OFDM. The third is MIMO, which uses multiple antennas to transmit and receive the signals. Lastly, wider spectrum bands magnify the above technological efficiencies.


The major factor that will potentially throttle deployment of LTE and other 4G technologies is building a full suite of end user devices. The device ecosystem is critical and could be a constraining force. Nevertheless, it is believed that devices will roll out in this order: single mode devices, dual chip solutions, and multi-mode devices solutions.

Additional thoughts…

Consensus is building that ATT will be losing its multi-year iPhone exclusivity in 2010, most likely mid year. Moreover, consensus is building that a CDMA version (CDMA/WCDMA) will be available next year. Some of the reasons for this belief are that the F.C.C. is looking into whether exclusive deals impede competition in the market, Apple sales soar in those markets where exclusive deals do not exist, and lastly, Apple most certainly does not want to help Android gain any better a foot hold. By the way, the Droid by all accounts is doing well. However, by all accounts and many, many reviews, the Droid is not an iPhone killer. It probably poses more of a threat to BlackBerry® and Palm Pre than it does to the iPhone.