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Year End WAP-up -- Telecom Vulnerability
Posted: 24-Dec-2000 [Source: WAPsight]

[A WAP-up on the state of the industry as we enter the mobile millennium.]

by Jean Panke -- Just over a year ago at COMDEX in Las Vegas I had the opportunity to use the Motorola Timeport P7389 for a few days during the show. The opportunity for wireless Internet had the industry buzzing with excitement and anticipation over what was to come.

At the time of the CTIA show in February in New Orleans, Vodafone's new CEO Chris Gent and NTT DoCoMo's Dr. Tachikawa were becoming telecoms new gurus. Gent was riding the wave after Vodafone's successful bid for a 3G license in the UK. This auction brought in a record US$34billion and set a pace for bidding wars, which turned chaotic by the time of Italy's licensing auction in October.

By then, the large amounts being paid for licensing were undermining the growth of the industry. The downturn in the markets began to dry up funding. The possibility of not having the resources to pay for expensive licensing as well as build the necessary infrastructure became a forced reality.

A major theme of the keynote addresses at CTIA in February was the need for standards to promote seamless service on a global scale. Although WAP had gained a strong foothold in Europe riding the back of GSM, the US continued to flounder in developing a sense of direction. The impatience was strong, as developers and users pressured companies to integrate while in reality they continued to carve out their own territory clinging tightly to their own preferred standard. This was all happening against a darkening back drop of telecom stocks continuing to rumble and tumble.

A large number of alliances, mergers, and partnerships developed over the past year on many levels. We see CDMA and its various forms attempting to claim Southeast Asia and China. Latin America and parts of South America are going TDMA. Europe remains steadfastly GSM. The US continues to have GSM, TDMA and CDMA developing simultaneously. It is apparent that developing a seamless wireless infrastructure is a daunting task. Many are waiting for technology to resolve this issue through integration, making standards in effect, a non-issue in relation to seamless service.

Meanwhile the target dates for 3G implementation keep moving further into the future. Recent research from the Strategis Group projects 3G in Asia and Europe in 2002 and 3G coming to the US in 2004. By 2006, Strategis projects China to be the leading 3G market. To complicate matters, there is a growing voice questioning the need for 3G. The possibility that GPRS and already available technology will make 3G obsolete before it's time is also grist for the mill.

Many folks have apparently decided to stand on the sidelines and wait this one out. They are taking their money out of technology, afraid to plant their flag anywhere, and continue to wander around waiting for the next financial tsunami. It's not coming -- certainly not anytime soon.

I'm wondering where we will be next year after such an adventurous 2000. By next year at this time, GPRS will have been around for a while and people will begin to appreciate the benefits of being always connected. At that time, I believe the revenue stream will gain increasing focus.

Once we have the ability to be always connected and have the devices with all the bells and whistles -- graphic capabilities, voice activation, location-based services, interactive games, e-mailing with photo attachments, etc. -- the question remains, how will the carriers charge for services. And, will they need to price these services so high in efforts to recoup their investments that "early adopters" may well be the only adopters.

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