CTIA: Wireless Execs Crave Spectrum, Less Regulation
On the Federal Communications Commission's ambitious and expensive national broadband plan, executives from AT&T and Samsung were quick to weigh in with their expectations not only for wireless service and device makers but also for mobile app developers and consumers, saying they'll play an integral role in milking every last bit out of the increasingly crowded wireless spectrum.
"We are at a critical point in our industry," Ralph de la Vega, president and CEO of AT&T's mobility and consumer markets, said. "Our past success is no indicator of the future and spectrum is the lifeblood of our industry."
"Consumers have gotten a taste and now it's clear their appetite seems unlimited," he added.
The numbers back up de la Vega's claims. The U.S. boasts more than 117 million 3G wireless subscribers, or 18 percent of the worldwide customer base, and 33 percent of the subscribers using the most advanced HSPA and EV-DO technologies.
U.S. carriers such as Verizon (NYSE: VZ), AT&T (NYSE: T), Sprint Nextel (NYSE: S) and T-Mobile will spend 80 percent of their investment capital, or $45 billion, on mobile broadband this year with roughly $23 billion going directly to wireless infrastructure. This investment and the estimated 2.5 million jobs the industry provides is only possible, de la Vega said, because thus far the industry has been kept mostly "free of heavy-handed regulation."
"Mobile broadband is this decade's economic growth engine," said AT&T CEO Randall Stephenson. "Our future leadership is not a birthright. We've lost our lead in manufacturing, steel and the automotive industries."
"The stakes are high and the opportunities are incredibly large," he added. "As a country, we can't afford to mess this up."
Mobile Application Data Crunch
Hyperbole and indirectly lobbying aside, Stephenson and other wireless leaders paint an accurate picture of just how explosive this market has become in just a few short years.
More than 1.1 billion applications were downloaded to smartphones last year in the U.S. alone, and mobile app spending is currently pegged for compounded annual growth of at least 20 percent a year through 2012.
And smartphone users generate 10 times the amount of broadband traffic generated by the average non-smartphone user, a trend that's only going to accelerate for the foreseeable future as more device makers enter the market and more developers write new applications to capitalize on the demand.
AT&T said worldwide wireless data consumption surged more than 3,000 percent in the past three years and more than 5,000 percent at AT&T. This stress on the finite wireless spectrum will only increase as 4G technology takes root and enterprise companies embrace more cloud-based applications accessed through smartphones in the field.
"Consumers flock to it and they love it," de la Vega said. "We already know about the skyrocketing demand. The question now is how do we deal with it? How do we meet that demand?"
Advanced new wireless devices and services, and an iPhone for the mobile enterprise
J.K. Shin, president of Samsung's mobile communications unit, hammered home this point when he told attendees that smartphone makers sold more than 178 million units in 2009 but are now forecasting nearly 400 million units by 2013, or roughly 25 percent of all the handsets sold worldwide.
And because consumers never can get enough content, Shin said Samsung will make video fans happy with the release of its new Samsung Galaxy S, an Android smartphone with a four-inch Super AMOLED screen designed to deliver high-quality video, GPS, e-mail and social networking apps on a screen that's 20 percent brighter, 80 percent less reflective and improves battery life by 20 percent.
Samsung's new smartphones will use 1GHz processors and include new content such as full-length movies, TV shows and books.
AT&T said it's already testing new technology that will let the carrier send messages to any device in a particular geography (exact dimensions were not disclosed) without needing to know every recipients' IP address, a service that would be especially helpful during national disasters like earthquakes, tsunamis and hurricanes.
The company also rolled out an application called WorkBench that will bring enterprise applications to the iPhone. It's also developing U-verse mobile to let people watch TV shows on wireless devices or from Wi-Fi hotspots.
But all these new technologies and potential revenue streams are contingent on finding or reallocating spectrum, company officials said.
The FCC's national broadband plan calls for freeing up about 500MHz of wireless spectrum in the next decade, with about 300MHz expected to be available for mobile broadband development within five years.
While CTIA and its member companies are pleased with this development, there's concern that it may be far too little and far too late to keep pace with demand and drive private investment for the next-generation wireless infrastructure.
Cisco Systems (NASDAQ: CISCO) predicts there will be more than 3.6 million terabytes of broadband traffic per month by 2014, with mobile broadband outpacing every other platform in both volume and rate of growth. By 2020, mobile devices will be the primary Internet devices for most of the world's population.
"We applaud the FCC's plan to free 500 MHz of free spectrum," de la Vega said, though he added, "It will take years."
"Demand is not going to wait. Even with additional spectrum, it may not be enough."