Cellular Carriers under Siege

While the industry is partying at CTIA in New Orleans, BusinessWeek has published a story highlighting all the threats carriers face. In typical BW style they blow things slightly out of proportion but do make some general points worth considering. They rightly point out that Wi-Fi is having an impact on carriers. However I think they go too far in their claim that its as big a revenue threat to carriers as they make out. We’re already seeing carriers integrate Wi-Fi into their product mix and bundling it with cellular service is the next logical step. Plus even if players such as Cometa do succeed in their ambitious build-outs who do you think are going to be their first customers? The same goes for NextWave’s wireless data service. Again, if they can build it out. The article also bring up the issue of industry consolidation which has been on the back burner for a while. This is an increasingly complicated issue because, as the article points out, carriers aren’t suffering enough to really move ahead with serious merger talks. That, however, is sure to change. Its not a matter of if it will happen, its a matter of when and what triggers it. Number portability could be it, but it won’t happen overnight because the initial implementation will be such a hack that people will either be afraid to switch or simply won’t be able to.

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