Telecom 2012: Wireless Pervades Top Five Business Developments

By Joan Engebretson December 13, 2012

As 2012 winds down, I thought it would be worthwhile to review what seemed to me to be the most important telecom headlines of the year. When I looked over what I had selected, what struck me was the fact that nearly every event on the list involved wireless in some manner – from Softbank’s investment in Sprint and T-Mobile’s plan to purchase MetroPCS, to AT&T’s proposal to replace traditional voice service with wireless in some areas.

In this week’s post, I’ll look at the top business developments of 2013. Next week I’ll look at the top technology trends.

So here’s this week’s list:

Carriers Aim to Minimize Reliance on Traditional Phone Networks

AT&T has asked the FCC to allow the company to move voice-only customers to a new service that allows a traditional landline phone to work over a cellular connection. Initially, the company is only targeting remote areas but could eventually implement the solution more broadly. AT&T argues that traditional copper infrastructure is too costly to maintain and that the money could be better spent on broadband deployments. 

Verizon is also moving away from traditional copper infrastructure, announcing this year that it would no longer sell DSL in markets where the company’s fiber-based FiOS service is offered. Moving forward, we may see Verizon emphasize its HomeFusion offering, which offers fixed broadband service over an LTE connection as an alternative to DSL.

Verizon Wireless and Cable Companies Co-Market Each Other’s Services

Late 2011, Verizon Wireless made deals with four of the nation’s largest cable companies to market one another’s services. Since then Verizon’s wireless business and its cable partners have opened up market after market, luring customers with the offer of Visa gift cards when they sign up for a service bundle that includes Verizon Wireless along with video and/or broadband service from the local cable company. There’s been no word on how well the companies are doing but judging by their rapid expansion, it would appear that the promotions are working. 

Verizon Wireless agreed not to partner with the cable companies in markets where its parent company’s FiOS triple play service is available, but that still left numerous markets up for grabs. The co-marketing deals are only the beginning, though. Verizon Wireless and the cable companies are working behind the scenes to co-develop integrated wireless and wireline offerings – and the industry will be watching closely to see what materializes.

Google Launches 1 Gbps Service

Google finally launched the long awaited fiber-based gigabit service the company agreed to build in Kansas City. Rumors that the offering would include video as well as broadband began circulating early in the year and proved to be true when the company announced service around mid-year.Even this story has a wireless element, as Google Fiber customers who sign up for video service get a Nexus 7 tablet to act as a remote control. 

Google took a novel approach to service deployment, asking customers to pay $10 to register for service – and prioritizing builds based on the level of interest in each neighborhood. There’s no word on whether Google expects to expand beyond the Kansas City area, but the company undoubtedly is gaining valuable information about how people might use ultra-high-speed connections (and while they’re at it, how people might use a tablet-based remote control.)

Wireless Industry Economics Drive New Wireless Company Pairings

Scale matters in the U.S. wireless industry – accordingly we have not yet seen the end to wireless industry consolidation. But the easy deals involving carriers that use the same network technology are largely over.

Incompatible networks didn’t stop T-Mobile from making plans to acquire MetroPCS, however. With 65 percent of MetroPCS customers upgrading their devices annually, the plan is to move those customers to the T-Mobile network, which has plenty of capacity, when they make the upgrade.

Before long, the MetroPCS network will be freed up to be re-farmed to support LTE – and it seems LTE will ultimately be the great technology equalizer.

Meanwhile, Sprint’s prospects are looking better, now that the company has received a cash infusion from Japan-based wireless carrier Softbank, and has obtained a controlling share in Clearwire. On a conference call to announce his company’s investment in Sprint, Softbank CEO Masayoshi Son said he would like to see U.S. consumers receive a higher-speed mobile offering than they have currently and

I’m looking forward to finding out what he meant by that.

Carriers Ponder the Second Screen

Various researchers have noted that a lot of people use their tablets or other smart wireless devices such as smartphones or laptops while watching TV. Carriers that offer video services are looking to capitalize on this by offering Web-based content that relates to specific video programming, including content rooted in social media. The carriers are still finding their way in this market, which is likely to be an area of increased activity in 2013.

***

I look forward to completing this list with you next week when I’ll look at the top telecom technology developments of 2012.



Contributing Editor

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