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New Apps Driving Wireless Growth

by Gene J. Koprowski
Chicago (UPI) Mar 18, 2005
The wireless industry may be poised for another massive expansion in the coming years - perhaps contrary to conventional wisdom - as new voice and data applications emerge and network quality dramatically increases, experts told UPI's Wireless World.

"Demand for cellular service by consumers will continue to grow," said Doug Tribble, a telecommunications expert and attorney with Pillsbury Winthrop in San Diego. "The major suppliers of service are shoring up their national platforms."

The heads of America's largest mobile carriers - Nextel, T-Mobile, Alltel, Sprint and Cingular - this week participated in a panel at the CTIA Wireless 2005 trade show in New Orleans and discussed a new report by the CTIA - also known as The Wireless Association - which found wireless subscriptions had increased by 13.4 percent during 2004.

The report indicated over 60 percent of consumers now use mobile phones in the United States, and there are more than 180 million wireless subscribers here. Last year, for the first time ever, consumers used 1 trillion wireless minutes.

The cost of an average wireless phone bill was $50.64, the CTIA report found. Capital investment last year in the wireless telecommunications sector reached $28 billion.

Overseas, growth may be even higher, some speculate.

"We would like to say that the statement from the carriers isn't entirely accurate," a spokesman for SmartTrust, a leading provider of mobile software for 100 carriers globally, told Wireless World.

"Per capita in developing markets like India, Latin America, China and now even in Africa, are seeing mobile penetration at much higher rates of growth than in the United States."

Industry analysts had thought wireless may have peaked, because the majority of those who wanted mobile phones already owned them. This may no longer be true, however. Carriers are continuing to target new niches and roll out new technologies that are driving today's growth.

"The growth in wireless will continue in the United States thanks largely to one segment - MVNOs, or Mobile Virtual Network Operators," said Dave Mock, author of a new book, "The Qualcomm Equation" (Amacom Books, 2005).

"MVNO's like Virgin Mobile and Boost Mobile have been very successful at tapping into the young-adult and teen markets that have had a very low penetration in the U.S. previously."

Those companies may have provided momentum for other, smaller firms to enter the market, too, Mock said. "There's a whole host of new MVNOs coming as well, with AMP's just announcing theirs this week."

For that customer segment, the key to success is marketing.

"MVNOs have proven much better at marketing and capturing subscribers in particular demographics," Mock said. "They have helped the carriers grow their customer base dramatically."

For more established markets, like older adult consumers, and businessmen, new technologies are the drivers of growth.

"With real-time communications, we are now living in a society where businesses no longer need to return to the office to grow profits," said Lindsay Peroff, a spokeswoman for 1-800-GOT-JUNK?, a junk-removal franchisor.

"We find it bewildering that more businesses are utilizing the wireless technology in this manner. We believe it will not be long before the majority of businesses will be required to function on this wireless level to compete."

Peroff said her firm uses e-dispatch technologies and Wireless Application Protocol, or WAP, phones to enable employees to work while on the road. WAP enables mobile phone users to browse the Web. That technology has "doubled our revenues every year," she said.

Internet telephony, though not now considered a factor driving revenues for mobile companies, may be one in the future.

"At some point in the future, mobile calls themselves could be VOIP (Voice Over Internet Protocol)," said Robert D. Atkinson, author of "The Past and Future of America's Economy: Long Waves of Innovation That Drive Cycles of Growth" (Edward Elgar, 2005). Right now, the technologies of VOIP and mobile phones are "complements, not substitutes" for each other, he added.

The ability to make free long-distance wireless calls is what will compel consumers and businesses to eye the technology further, said Atkinson, who also is director of the New Economy Project at the Progressive Policy Institute, an arm of the Democratic Leadership Council in Washington, D.C.

Traditional land-based phone carriers are not likely to sit back and let all this happen without a struggle, however, so they are starting to innovate, too.

"Companies such as SBC are now offering consumers a full package of telecommunications services with one stop shopping, including cellular service, along with DSL and other products," Tribble said.

"It is clear that all of the major players will be marketing their services and products to the consuming public much more aggressively than ever before, which will lead to further penetration."

All rights reserved. Copyright 2004 by United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of by United Press International.

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