The CTIA Super Mobility conference last week showed the wireless industry as an incredible growth engine. While that is true, not every company will win going forward. The latest carrier to fail is Syringa Wireless, which offers service to rural areas in Idaho. Companies like AT&T Mobility, Verizon Wireless, Sprint and T-Mobile US are winners, but what about smaller carriers like U.S. Cellular, C Spire Wireless and others?
During the conference, CTIA showcased a lot of the transformation of the wireless world. It is very exciting. However, I don’t believe every wireless carrier, handset maker, consumer or business service provider will be successful in this new and growing space.
Growing, cresting or falling on the growth curve
The wireless industry seems to be splitting into groups. One group is the larger carriers like AT&T Mobility and Verizon Wireless, which are rapidly growing and transforming themselves and other industries. They have roughly 70% of the market share and blend their wireless and wireline to deliver video and audio in new ways over their data networks.
Sprint also has a very strong spectrum position, however it is wireless only so is in a different category. Sprint is changing and will be a player in the wireless end of this race.
T-Mobile US is growing, but it has a weak spectrum position, so while things look great today, I don’t see it continuing to grow at this pace unless things change.
Smaller carriers like U.S. Cellular and C Spire may face challenges with limited spectrum going forward. New providers like Google’s Project Fi want to challenge the existing wireless model. There are, in fact, many that would like to change wireless, however most are not successful. Just consider Amazon.com’s Fire Phone and the Facebook phone.
Handset makers have gone through a major transformation over the last few years. The leaders used to be Nokia and BlackBerry, but today the leaders are Apple iPhone, Google Android and Samsung Galaxy. There are also plenty of other devices.
App makers for both consumers and business customers are finding this marketplace to be perfect, but highly competitive.
I see things differently
At the show last week, we heard so many heavy hitters from wireless and other industries talking about new growth areas: Everything from expanding the traditional way we watch television to helping other industries transform themselves.
Some say traditional industries like cable television will continue and we will simply add new technologies to the mix. While I see some truth in this, I also see things differently. On one hand, cable television may not go away for a long time because of the traditional customer base, which is shrinking. However, I see a complete reinvention of many industries including cable TV. And that change is underway today. Some cable TV companies will change and continue to grow. Some won’t.
This is not news. We have seen this several times in several industries over several decades. Remember how iTunes transformed the music space, causing traditional music providers to struggle? Or how Amazon transformed the book business putting retail book giants out of business? Then they started recreating the book business with Kindle digital books downloadable from anywhere. Or how the iPhone and Android transformed wireless, causing past leaders like Nokia and BlackBerry to struggle virtually overnight?
Wireless is ground zero for this transformation
Either way, the wireless industry is ground zero for so much change and growth for the wireless industry itself and for other industries like music, books, movies, television, entertainment, health care, automotive and many more. This is the delivery method to a mobile society.
Going forward, the ability to offer richer video will continue to eat up spectrum demands. This is a fact the wireless industry struggles with every day.
CTIA vs. CCA
CTIA represents the entire wireless industry, while the Competitive Carriers Association is more focused on small wireless carriers or more specialized wireless carriers for consumers and business customers and the companies that serve them. Both are holding their shows within a few weeks of each other.
While they both are important, and while they both focus on many of the same issues, both are very different. One focuses on the entire industry and the other focuses on smaller carriers.
As spectrum is a growing issue, the question is: Will smaller wireless carriers be able to continue to win going forward? That’s the million-dollar question. We see smaller carriers struggle to get their hands on spectrum in order to remain players in the wireless space. Fortunately they are able to lease spectrum from larger carriers like Sprint, which helps them through this rough time.
Some companies will win, others will fail
Just because a company has been successful in the past, does not mean it is guaranteed to be successful going forward. Many carriers don’t have as much wiggle room as they need. That means when things start getting rough, things can turn sour pretty quickly. Just consider Syringa Wireless.
Spectrum is one big trouble spot. Carriers like AT&T Mobility, Verizon Wireless and Sprint have plenty of spectrum for their needs today. However, all other carriers have very little or no spectrum and may be on a dangerous and slippery slope.
Success in wireless going forward requires incredible and continual investments, faster speeds, better quality and reliability, reach and spectrum. It is getting trickier and more expensive to remain a strong competitor in the wireless industry when available spectrum is a key element.
That means over the next several years more small carriers may start to struggle. More competitors may disappear. We may have fewer small, regional wireless carriers, meaning we will have to choose one of the larger, national wireless carriers as our provider.
We must make sure larger carriers have access to spectrum since they have the vast majority of market share. We also should, however, make sure smaller carriers at least have access to spectrum as well so they can continue to compete. This is one of the difficult problems we wrestle with today as an industry.
The choice the average consumer or business customer always has is reach, reliability, speed and innovation of larger carriers vs. price of smaller carriers. Fortunately there are plenty of customers in both arenas.
Which wireless carriers and companies will win going forward?
I fully expect the wireless industry to continue its rapid and healthy growth curve. New technologies and new competitors will continue to infuse lots of energy into this industry, and others, which will use wireless as their new launching pad. But even with all this excitement, there will always be companies that fail.
So be sure to stay aware of the different sectors and the companies in each sector – which ones are growing, cresting or falling. Companies on both the consumer side and the business side. Each company has its own place in the growth curve, and some are growing and others are not. If you choose well, whether you’re a customer, worker or investor, you can stay in the right growth curve.
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