The wireless auction is finally over and the successful bidders have been announced. There has been a significant amount of commentary relative to the amount of money paid for the available spectrum; some suggestions for the distribution of the funds raised; and the possible business models of the winning bidders.
Maybe it is time to take a moment and look at this from the perspective of the mobile user.
What could the affect be for customers?
With new entrants in the market, it is possible that we may see a fourth or even a fifth mobile network. With smaller companies in the market, we may see regional rather than national providers. Finally, with new business models we should have the opportunity to take advantage of fresh approaches to services.
As these new companies launch their services, clearly there must be a distinctive value proposition for people to move their service to a new provider. The new companies could have some interesting effects on the traditional wireless business models. With 4G services now being discussed, the opportunity to build services from the ‘ground up ‘, although costly, has the advantage of installing the latest wireless technologies without dealing with the issues of having sunk investment in existing legacy infrastructure and equipment.
What about the affect on current wireless providers?
The additional carriers will have the impact of putting pressure on price, even if the new entrant is regional, and there may be changes to some of the traditional billing methods and services.
The closest comparison in the wireline business is the impact that companies such as Vonage and Skype have had with respect to the acceptance of IP Telephony as an alternative to traditional wired services.
If this level of creativity and fresh approaches to providing service enters the world of mobility services, we could experience some interesting changes in the wireless marketplace.
Rhetorically, what would be the impact of a new mobile provider partnering with an IP Telephone company to provide the key linkage to wired services?
This could result in a new approach to things such as billing for long distance charges on incoming calls when the wireless phone is out of the local calling area.
Creative thinking will be the marketing edge that these new companies will need to effect significant and rapid market penetration once their networks are in place.
As users and early adopters of next generation technologies, Fox Group looks forward to monitoring and trying out potential new services as they roll out with the new wireless providers. This enables us to report back on the real business benefits and challenges possible from emerging technologies.
Bill Elliott is a director at the Fox Group Telecom Consulting.
