ATLANTA -- In a keynote panel discussion this morning at CTIA Wireless 2004, top executives from leading U.S. wireless...
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carriers agreed that next-generation network infrastructures will lure enterprise customers like never before, but they sparred over the future of push-to-talk services and local number portability.
During a fast-paced discussion led by CTIA president and CEO Steve Largent, the industry leaders concurred that 3G and 4G networks, which most carriers are building or developing, will soon provide enterprise users with the high-speed mobile services they crave.
Nextel Communications Inc. president and CEO Timothy Donahue said that his firm's successful 4G network tests in the Raleigh, N.C., area confirm that businesses will find value in high-speed wireless applications.
For that reason, Donahue said that he expects that his company and the industry will pick up many new enterprise customers as high-speed services roll out across the United States. "It's here and it's here to stay, and it will be a big part of our business," he said.
Stan Sigman, president and CEO of Cingular Wireless, said he expects enterprise usage of high-speed data services to take off quickly. With that increase in revenue and usage, U.S. carrier will be able to build out their networks to the point where coverage and services are comparable to those in Asia and Europe.
Verizon Wireless president and CEO Denny Strigl, whose company will invest $1 billion dollars during the next two years in its nationwide 3G Evolution-Data Optimized (EV-DO) network rollout, said that its strategy represents the perfect evolution path for the industry, because enterprises are flocking to high-speed wireless data services.
"I'm finally convinced that, if we build it, [enterprises] will come, and they are coming," Strigl said.
Attendee Borika Vucinic, an account manager with Canadian carrier Bell Mobility in Mississauga, Ontario, said she also expects that enterprises will be drawn to high-speed data services. Even though, she said, customers don't care which air interface technology carriers use, Bell Mobility is particularly interested in the technology chosen by the U.S. carriers, because the company doesn't want to implement an expensive technology like EV-DO and be forced to replace it two years from now.
The panel wasn't as willing to agree about the growing competition in the push-to-talk segment. Nextel has built its reputation largely by providing high-quality, low-latency PTT service. Today, Nextel has more than 10 million subscribers to its proprietary network, largely because of the success its walkie-talkie-like service has enjoyed among small and medium-sized businesses.
When asked about the growing competition in the push-to-talk segment, Donahue joked that he had yet to see any. He also said that the limited PTT offerings of Sprint PCS and Verizon Wireless haven't affected his company.
"We've had a good run with push-to-talk, and we're the leaders," Donahue said. "We feel we're still king of the hill."
But Len Lauer, president and chief operating officer of Sprint Corp., suggested that the size of Nextel's PTT hill isn't large enough to be significant. He hinted that customers wanting a complete wireless experience with high-quality handsets and superior services know to look elsewhere.
Executives agreed that local number portability was another key issue. Portability rules went into effect in November, granting wireless customers in major markets the option of keeping their phone numbers when they switch from one wireless carrier to another.
"[It's] probably the biggest change this industry has seen in years," Strigl said.
But Strigl also said that the impact of local number portability has been overstated. In the fourth quarter, only 20% of the company's net customer-adds involved local number portability. Even though number portability was the right thing to do for customers, the new regulations have been a burden on the industry, Strigl said. They required carriers to spend time and money implementing complicated changes when the carriers could have been focusing on increasing the quality of their offerings.
John Stanton, chairman of T-Mobile USA Inc., urged his colleagues and others to continue embracing local number portability and other industry innovations that benefit customers because, if they don't, upstarts will quickly emerge to offer them. He said that the true test of local number portability's value will begin May 24, when the remaining two-thirds of the nation will be able to take advantage of number portability for the first time.
Largent asked the panelists whether thin profit margins were hurting the industry, but Stanton said that industry-wide profit margins average about 33% and continue to grow. He said that barriers such as government controls on competition and radio frequency spectrum limitations have been challenges.
"Thanks to Stan, that's changing," Stanton said, lightheartedly referencing Cingular's acquisition of rival AT&T Wireless, including its spectrum allocation.
Attendee Terri Ellison, a project manager with Southern California Edison Inc., in Rosemead, Calif., said that she had hoped the executives would discuss how the Cingular-AT&T Wireless merger will affect the wireless infrastructure. Her firm, which leases cellular towers to wireless carriers, is hoping that Cingular will end its leasing partnership with T-Mobile. If that happens, then T-Mobile would likely have to lease towers directly from Southern California Edison.
Prior to the keynote panel, New Orleans Saints wide receiver Joe Horn made an appearance on stage with Largent. The NFL player, who announced that hiptop maker Danger Inc. was the recipient of the CTIA's Winning Wireless Widget award, gained infamy earlier this year for making a cell phone call as part of an on-field celebration after scoring a touchdown.
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