S P E C I A L R E P O R T

10 Trends inWireless Mobility

Consolidation continues to be a major force in thewireless ecosystem among both wireless providers

and their network infrastructure partners. In 2005, thetop five wireless carriers controlled 83% of the U.S.cellular market; today including Verizon Wireless’planned purchase of Alltel, the top four carriers couldcontrol more than 90% of the market. Whether it isAT&T Mobility picking up Dobson or VerizonWireless uniting with Rural Cellular Corp., a handfulof operators control the wireless landscape.

As the big carriers get bigger and the small getbought, the world’s infrastructure companies have hadto consolidate in order to compete for business fromfewer customers. While 2007 marked the year of pow-erhouse matchups between first-tier network vendors(most notably French powerhouse Alcatel with NewJersey’s Lucent and Nokia’s networks business withthat of Siemens,) look for more second-tier suppliersto merge in order to maintain the critical mass neededto continue to offer product to their network and car-rier customers.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 1 : C O N S O L I D AT I O N

Links to related stories about vendor consolidation:

Alcatel-Lucent, NEC partner for LTE

Moto, Nortel deal in the works?

CommScope again goes for Andrew in $2.6B deal

Nokia Siemens Networks readies for takeoff

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Links to related stories about operator consolidation:

Verizon Wireless picks up Californian carrier

AT&T Mobility nabs 19,000 subscribersthrough W. Va. carrier buy

By the Numbers: Top Ten U.S. WirelessService Providers, 2007

Who’s left? T-Mobile buys SunCom in latest rural roll-up

By the Numbers: Top Ten U.S. WirelessService Providers, 2008

Third time’s a charm:VZW to acquire Alltel

RCRWirelessNews.com10 Trends in Wireless Mobility

# 2 : S P E C T R U M

Links to related stories:700 MHz auction

T-Mobile USA, Leap move closer to AWS launches

FCC moves on 2155-2175 MHz spectrum band

FCC details plans for free nationwide wireless broadband

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Wireless service providers can’t sell their wareswithout spectrum. It’s the lifeblood of the

wireless industry. While today’s third-generationnetworks aren’t overloaded, carriers realize thateventually they will need more spectrum toaccommodate data-heavy applications like stream-ing video. Further, with the 700 MHz auctionbehind us, the nation’s top wireless providers willhave to develop individual strategies for how toincorporate their newfound 700 MHz spectruminto their business models. Even operators whostayed away from the 700 MHz auction, like T-Mobile USA, which owns frequencies at 1.7-2.1GHz from the 2006 AWS auction, and SprintNextel Corp., with its 2.5 GHz spectrum, mustfigure out how to offer services over a number offrequency bands.

In the meantime, the federal government mustdecide how public-safety and homeland-securityneeds impact commercial spectrum issues. TheFederal Communications Commission has set asidespectrum at 4.9 GHz for homeland security, and

mandated that some 22 megahertz of 700 MHzspectrum be used by first responders. Neither ofthese measures have had much success to date.Indeed, the sale of 22 megahertz at 700 MHz,considered prime real estate, failed to capture theminimum bid mandated by the government, prob-ably because it was to be shared between commer-cial and public-safety interests. The FCC is in theprocess of deciding how to re-auction that spec-trum, and is also looking to auction another 25megahertz of spectrum. Initially, it appears thegovernment would like some of that spectrum tobe offered free to qualifying households.

Wireless carriers – and their networkpartners—are moving beyond being

the phone to become Internet companies.This trend is deeper than just AT&TMobility and Verizon Wireless offeringfiber-to-the-home service via their parentcompanies. Nokia, the world’s largesthandset manufacturer, has grand plans tobecome a multimedia company, as doesrival Samsung. Motorola has publicly stat-ed it wants customers to have “liquid con-nectivity,” where content is transferredseamlessly from your home TV to the cell-phone in your hand to the in-dash enter-tainment system in your car. Everyone iswatching this marriage of mobility and theInternet to see if it will be as fruitful asindustry imagines.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 3 : B E Y O N D T H E P H O N E

Links to related stories:

Hardware, and beyond: Nokia and Samsung race to provide Internet services

Nokia moves to realize Internet ambitions

Nokia’s vision based on constant connectivityKR

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RCRWirelessNews.com10 Trends in Wireless Mobility

# 4 : E N T E R TA I N M E N T

Links to related stories:

462M to subscribe to mobile TV servicesby 2012

Consumers (still) want location-basedservices

Cellphones to dominate for navigation,study finds

S.E., Nokia set to battle in D-2-C space

Acellphone isn’t just about making a voicecall anymore. It’s an entertainment medi-

um. People use phones to listen to music, playgames, read news, check horoscopes and getsports scores as well as find friends and other-wise network. This trend will only continue togrow as today’s youth demand more entertain-ment applications.

One of the hottest areas of venture capitaltoday speaks volumes to that youth market:mobile social networking. No one has hit upon

a successful business model, but a lot of com-panies are investing heavily in the promise.

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Wireless is expanding – everywhere. Wirelesswill connect your home, your office, your

car, etc. Wireless connections will be everywheresomeday. Workers are demanding wireless appli-cations on the go as well as in the office.

Gaming-console makers are adding Wi-Fi con-nections to their gadgets.The most exciting devices cited by WiMAX tech-nology proponents are not laptops or handsets,but nontraditional devices with wireless connec-

tivity, like digital camcorders, gaming consolesand the like.On the enterprise side, large machinery andsmaller dispatch services are relaying informa-tion back to the office via machine-to-machine applications. It’s difficult to find agadget or application that wouldn’t benefitfrom some type of wireless connectivity.Indeed, wireless connections outnumber wiredconnections today.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 5 : W I R E L E S S C R E E P

Links to related stories:

Infotainment on the move: The future ofin-vehicle consumer infotainment

AT&T snags Starbucks Wi-Fi agreement

The mobile enterprise, 2008: ‘all over themap’

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LTE; WiMAX; UWB; software-defined radiosthat sniff out the best frequency (which would

enable open-access), near-field communications,Bluetooth, xMAX. Engineers are continually push-ing the limits of today’s technology. These advancesare welcome by existing operators but also pose thethreat of becoming disruptive technologies thatwould enable new competition in an already-crowded field.

Likewise, new potential competitors (Intel,Microsoft, Google, Yahoo, Skype, Vonage) all posea threat to how business is done today.

Traditional handset makers like Nokia andSamsung are making inroads to develop their ownrelationships with customers, not just goingthrough the carrier for those relationships.

Further, Apple’s iPhone showed that one success-ful product can turn the industry on its ear, andcreate new models for conducting business.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 6 : F U T U R E T E C H / C O M P E T I T I O N

Links to related stories:

Technology:

WiMAX opportunity bright, though challengesremain

Verizon Wireless’ LTE decision puts ball inUMB, WiMAX court

FCC begins new round of white-spaces testing

Competitors:

Skype’s rallying cry

Yahoo’s impressive mobile run

A changing tide? Ovi, Android loosen carriers

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Wireless carriers are increasingly under pressurefrom state and local governments to treat

their customers better. There are two issues at hand:a) carriers don’t want to have to comply with regu-lations like their wireline counterparts do. Theyargue wireless is successful today because it’s beenself-regulated by competition. And b) Even worse,having to comply with myriad regulations state bystate and city by city would be expensive. If it costsa wireless provider $5 more per person to do busi-ness in Colorado than Utah, should the Coloradocustomer pay more?

Lately lawmakers have targeted open access andearly termination fees as two areas to regulate moreclosely. Many wireless carriers have said they willstart pro-rating early termination fees in response tothis legislative pressure.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 7 : H E AV Y H A N D O F R E G U L AT I O N

Links to related stories:

CRACK DOWN: Proposed bill would giveFTC some mobile authority

Klobuchar: Wireless carriers require federaloversight

State’s role in consumer protection bill pondered

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Afew years ago customers didn’treally complain about LG

Chocolate only working on VerizonWireless’ network. However, with theiPhone/AT&T bundle, consumershave rallied around the open-accesscry, and want the wireless ecosystemto act like the wired Internet world,where devices and applications canwork with any ISP. The irony behindthis movement is that the iPhone,which caused the uproar, is singularlytied to AT&T Mobility’s network inthe U.S. through revenue-sharingagreements.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 8 : O P E N A C C E S S

Links to related stories:

Martin to oppose open-access mandates

Open access: Paradigm shift or an open question

House introduces net neutrality bill

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The rise of mobile TV, mobile advertising,mobile search, social networking and loca-

tion-based services. These areas have the poten-tial to be some of the fastest-growing consumerapplications in the coming years, but only if thewireless value chain offers these applications atthe right price, to the right person, at the righttime.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 9 : C O N S U M E R A P P L I C AT I O N S

Links to related stories:

Parsing reality from the hype

A bright future for ad-funded mobile entertainment

Garmin punches into cellphone market withiPhone-style navigation gadget

Dish to test satellite-based mobile TV serviceusing 700 MHz spectrum

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Further fragmentation of the device mar-ket even as it tries to standardize.

Application developers are frustrated thateach time they introduce a new app, theyhave to tweak it to work on a variety ofoperating systems. Whether Java, Linux,Symbian, Microsoft, Android or Apple, theindustry is likely to continue to see a varietyof OSs in the marketplace.

RCRWirelessNews.com10 Trends in Wireless Mobility

# 10 : D E V I C E F R A G M E N TAT I O N / O S

Links to related stories:

Analyst’s crystal ball on device trends

Open access: Paradigm shift or an openquestion

Android floats in spaceISTO

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