Light Reading

Who Needs a Strategy

Cutting Loose
Cutting Loose
Cutting Loose
1/16/2007
50%
50%

Doing a quick news-check on the Big Three U.S. wireless carriers, we find them, like the eponymous trio in the great 1999 Gulf War film Three Kings, trying to hold onto a big stash of gold while wandering in an uncharted and unfamiliar wilderness, taking potshots from all sides.

The stash of gold, in this admittedly belabored metaphor, is the huge and growing number of mobile subscribers plus the largely still-untapped market for wireless enterprise services in North America. The wilderness would be the increasingly complex competitive landscape for wireless service providers, while the potshots are coming from WiFi providers (including the 800-lb. gorilla called Google), WiMax startups (including Craig McCaw's well-funded ClearWire), and other advanced technologies that could do for conventional 2G cellular networks what mobile phones did to Plain Old Telephone Service: render it antiquated very rapidly.

Consider recent strategic moves by the Big Three:

  • With the closing of its BellSouth acquisition last week, AT&T Inc. (NYSE: T) said it will deep-six the Cingular Wireless brand, arguably the most recognizable and trusted marque in wireless telephony. How come? AT&T seems bent on reproducing the Ma Bell monopoly, with all the connotations of indifferent customer service, lack of innovation, and bullying corporate tactics that entails. AT&T management expects to save millions in operating expenses by consolidating the BellSouth, Cingular, and AT&T marketing efforts under one brand — but what will it lose in terms of customer loyalty and "brand equity" by junking Cingular? And, oh yeah, Cingular announced an exclusive two-year tie-up with Apple Inc. (Nasdaq: AAPL)'s hot new iPhone — a device that works over Cingular's EDGE network rather than higher-speed 3G systems such as EV-DO or HSDPA. Many of the newer smartphones coming out operate on the faster networks. (See Cingular: The Call of the WiFi.)

  • Verizon Wireless said today it is spinning off its wireline assets in three Northeastern states to focus on its faster-growing wireless business. That's swell. But, what's taking so long? Verizon president Lawrence Babbio said almost three years ago that the company would unload as many as a quarter of its "lower-growth assets," i.e., landlines. Unfortunately, selling telephone lines today is not as simple as putting your waterbed up for sale on Craigslist. Verizon's sale of 700,000 phone lines to Hawaiian Telecom in 2005 for $1.65 billion set off months of service disruptions for former Verizon customers, and HT lost $32 million in the first quarter after the sale. In upstate New York, opposition from telecom unions blocked a deal to sell off landlines a few years back. Verizon still has 46 million landlines, down from 54 million in 2004. Verizon would dearly love to concentrate on high-margin, fast-growth wireless broadband and residential triple-play services, but the POTS anchor still slows the company's ship. (See Verizon Claims Q3 Wireless Supremacy .)

  • Sprint Corp. (NYSE: S), meanwhile, just hired a new senior vice president for strategy. "Strategy," hmm, isn't that what the CEO and the board are supposed to take care of? Of the Big Three, Sprint is clearly the most challenged in terms of subscriber growth and short-term revenue/earnings prospects — Sprint shares have lost 29 percent of their value since last April. But at least Sprint, which has bungled the integration of Nextel's iDEN network with its own systems, can claim to have a strategy: It's focusing on the wireless broadband future, as evidenced by its $3 billion commitment to building a nationwide WiMax network by the end of 2008. (See CES: Sprint Streams WiMax.)


To summarize, with the exception of Sprint, a company rapidly losing ground in its core business, the Big Three carriers are largely strategy-challenged. They're used to sitting back and signing up subscribers to restrictive multi-year contracts, squeezing dollars out of airtime. They're essentially in the business of restricting choice in an environment where average revenues per user are declining and communications choices are exploding. The carriers need to shift to a customer-friendly model of providing high-value services on innovative devices, or they'll be in the position the Baby Bells were a few years back.

Can they do it? Well, they've got huge customer bases (and growing ones, in the case of Verizon and Cingular, er, AT&T) to sustain them through the transition period. The real question is whether they have the management will and the creative firepower to pull it off.

— Richard Martin, Senior Editor, Unstrung

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
LRTV Custom TV
DOCSIS 3.1: Transforming Cable From Hardware-Defined Network to Software-Defined Network

4|29|15   |   03:48   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explains how DOCSIS 3.1 can transform cable HFC network to a more agile software-defined network.
LRTV Huawei Video Resource Center
Predicting Traffic Patterns for Quality Mobile Broadband

4|29|15   |   6:45   |   (0) comments


Accessing information ubiquitously creates complexity and creates heavy traffic onto the network, especially at large-scale events like sporting events or festivals. In this video, Huawei's Mohammad Hussain speaks to experts about how to predict traffic and improve user experience during periods of heavy traffic.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network functions virtualization (NFV) is not the easiest of topics to take on board, so here's a Light Reading infographic, developed following conversations with the folks at HP, that helps make sense of where NFV is taking the industry.
Hot Topics
10 Alternate Uses for Tablets
Eryn Leavens, Copy Desk Editor, 5/22/2015
Verizon Saves 60% Swapping Copper for Fiber
Sarah Thomas, Editorial Operations Director, 5/19/2015
Bidding War for TWC Looks Likelier
Alan Breznick, Cable/Video Practice Leader, 5/22/2015
Chattanooga Charts Killer Gigabit Apps
Mari Silbey, Senior Editor, Cable/Video, 5/20/2015
Comcast Targets 6 New Gigabit Markets
Mari Silbey, Senior Editor, Cable/Video, 5/21/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With 200 customers in 60 countries, Stockholm-based Net Insight has carved out a solid leadership position in one of the hottest vertical markets going in comms right now: helping service providers and broadcasters deliver video and other multimedia traffic over IP networks. How has Net Insight managed to achieve this success in the face of immense competition from the industry giants?
My ongoing interview tour of the leading minds of the telecom industry recently took me to Richardson, Texas, where I met with Rod Naphan, CTO and SVP, Solutions, ...
I recently popped down to Texas to chat with CEO Eric L. Pratt about his company, Taqua.
Cats with Phones