Carrier Execs Disagree on How Quickly 4G Will Take Hold
LAS VEGAS -- Debate about when 4G wireless will supplant 3G as an aim of carriers building out networks crackled among wireless carrier officials at CTIA Wireless 2006. During the closing keynote, Spring Nextel COO Len Lauer said his firm will decide on 4G this summer. Top Cingular and Orange officials urged caution.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“This industry is successful because of innovation and we need to continue to push this envelope,” Lauer said. “We have been deploying 3G service, we're seeing very good returns from it, and we're planning to roll out 4G.”
“We need to do 3G well first,” said Orange Group CEO Sanjiv Ahuja. “We offer UMTS. We are offering HSDPA… We will [offer] more of it this year, next year… The first goal of this industry is leverage the 3G technology well. Deliver the service. It’s wonderful to talk about 4G and beyond 4G, but a customer experience is a lot more than just sheer bandwidth.” He added: “Get the right model, the right types of experiences, every touchpoint of the customer… Most of our customers would be satisfied if we did 3G well.”
“We need to focus on our execution around 3G,” said Cingular CEO Stan Sigman: “In Cingular’s case, in this market right here, we're supporting analog, we're supporting TDMA, we're supporting GSM and now UMTS. That’s not an efficient way to use your spectrum.”
Hot conference topics included the likely emergence of nontraditional players like Google and Microsoft as direct competitors to traditional carriers. Traditional carriers will retain a big advantage over these challengers, Ahuja said: “Different business models have been coming in that are saying without investing in the network infrastructure, without investigating customers the way we do… without subsidizing handsets, without making sure end-to-end quality service is there… you can be a telecommunications services provider… It’s a fallacy. I don’t think it’s long-term sustainable. It works for a length of time but eventually… you cannot communicate without having a network infrastructure.”
Ahuja tied the issue back to 4G. “If we don’t make the 4G investments, where is the bandwidth going to come from? Where are the services are going to come from?” he asked.
Executives agreed that data will grow in importance to carrier revenue relative to voice in coming years. At Orange, 15% of revenues already is tied to data. For U.S. carriers, 7-8% of base revenue comes from data.
Data revenue will grow quickly to 20% of U.S. carrier revenue by the end of the decade, Lauer said: “That’s a lot of growth for us to get there. And then obviously investors have a concern of what happens to your voice. Does voice pricing stay as competitive as it has been?”