inCode, a VeriSign Company, has announced its Top 10 predictions for the game-changing events that will shape the wireless industry in 2008. The predictions cover major trends ranging from who will win the communication standard wars, what role Google will play in the wireless world after January’s spectrum auction and whether or not consumers will finally open up to digital content and mobile advertising.
Yesterday we published the first five predictions. Here are the final five for 2008 plus a bonus prediction at the end.
6. P2P – From Theft Model to Business Model
Prediction: P2P becomes mainstream as a technology. Long used for pirating files, US distributors follow the UK’s lead (e.g., BBC, Channel 4, Sky) and begin to utilize next-generation, secure and DRM-protected P2P for content distribution. Media delivered via IP/Internet/broadband will completely blow apart the “walled garden” relationships created over the years. In addition, there will be major impact on services such as Slingbox/Echostar. Major studios and broadcasters will increase the rollout of over-the-top services (a la NBC Direct, Hulu), following fast on the heels of what BBC and others have already done. As “over-the-top” media takes hold for legitimate services, and the best of download services are using P2P, ISPs move from blocking and tackling (traffic shaping, etc.) to building strategic relationships with providers and media distributors. Again, the consumer wins!
7. In-building and Femtocells – Show Me The ROI
Prediction: In-building will play a large part in carriers’ strategy to fill in coverage gaps, driving increased ROI for enterprises and average revenue per user (ARPU) for carriers. Carriers will follow an “inside out” strategy, enabling coverage that focus on where the most lucrative customers are (e.g., enterprise, in-building) instead of blindly blanketing a city with coverage. Carriers will be looking at low-cost, low-power femtocells as a way of increasing coverage and capacity, fostering customer loyalty, investigating offloading strategies, and reducing operating costs. However, unresolved technical and business issues such as wireless interference problems, what devices caused them, what channels are impacted, lack of a good managed service/business model, closed access, and competition from WiFi will make 2008 the year of heavy buzz with little actualization.
8. Backhaul Makes a Haul – A Move >From Wireline to Wireless
Prediction: As the carriers roll out 3G infrastructure and continue to introduce bandwidth-intensive data service offerings, the backhaul portion of their networks must be optimized and/or upgraded to ensure that the service quality is not compromised. Most backhaul is comprised of leased TDM facilities provided by the fixed line carrier. As a result, backhaul will represent a significant operational expense, in many cases totaling as much as 30 percent of a carrier’s annual network operating expense budget. Carriers cannot continue to scale their backhaul using leased TDM facilities when data traffic is growing exponentially and will begin to explore other options for backhaul including fixed wireless, HFC, Carrier Ethernet, DSL, and fiber. In addition, the high cost of real estate to mount antennas and high costs per megabit will impact microwave deployments in North America. One trend that will help reduce microwave cost significantly is a move away from point-to-point architectures toward point-to-multipoint designs.
9 Mobile Advertising Gains Steam – Will it Stick or Get Stuck?
Prediction: Mobile advertising will become a significant event, sponsoring content and driving innovation – so much so that carriers will no longer look at their business cases on a strictly subscription basis. In fact, subscription-based models will lose again to advertising-based models, replicating what happened on the Internet. It is not just the carriers who are building advertising steam. Google, for example, is a $200 billion market value “advertising” company, and the carriers are sitting on precious assets – the wireless networks – that should be leveraged and monetized. By addressing services such as intelligent search, location-based search, and other tie-ins with a variety of content and product partnerships, carriers who understand this fact will begin generating sizeable advertising revenues in 2008. Why do you think Google launched Android?
10. Mobile Device Security – The Internet Brings its Security Baggage On the Road
Prediction: Not only does the popularity and number of iPhones continue to increase (and make way into enterprise organizations), the significance and sensitivity of data on these devices also continues to rise. A major iPhone security incident will raise the awareness of and need for mobile device security. This will therefore create and drive a new market for mobile device security software as well as mobile device management software and services.
Finally, as a bonus prediction, the wireless industry has a tremendous opportunity go back to basics in response to consumer demand for more reliable phone service:
11. Back to Basics, Please!
Prediction: Mobile service quality will continue to deteriorate for the eighth year in a row. The combination of new technology (3G), multi-band, multi-radio access technology, advanced and complex handsets, least-cost routing and outdated roaming solutions have made mobile services less reliable than they were before the introduction of 3G. This means more dropped calls, poorer quality calls, and more failed call set-ups for the user. There will be a growing market for more robust phones with a single band, fewer features and longer battery life for people that are really dependent on a reliable phone service.