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News
Issue #2001 - 50 (December 2001)
(Updated Dec. 12, 2001)

MARKET OUTLOOK & TRENDS

U.S. Years Behind Europe and Asia in Wireless Tech, analyst says

The United States continues to play catch-up in wireless and mobile technology, four years behind Asia and two years behind Europe, according to a senior partner with the consultancy firm Accenture.

In an interview with The Irish Times, Richard Siber, managing director with Accenture, reflected on the challenges confronting the U.S. wireless industry.

Spectrum Allocation
Mr. Siber believes the U.S. will not be on an equal footing with Europe or Asia until it adopts a long-term spectrum management policy. "It is still struggling to identify spectrum for next-generation wireless," he said. "With spectrum allocations in the three frequencies 700 MHz, 1700 MHz and 2500 MHz used by other industries who are not willing to move to another frequency band," the wireless operators are at their mercy: the TV broadcasters hording the 700 MHz band; the Department of Defense occupying the 1700 MHz frequency and the 2500 MHz band controlling the education and religious broadcasters.

Third Generation Technologies
With the introduction of DoCoMo’s 3G service in October, third generation technology is now a reality, Mr. Siber said, but the U.S. will probably not deploy 3G services for years. He noted that two U.S carriers, Sprint and Verizon, who plan to introduce services "under the title of 3G next year" will, in reality, only be delivering services at rates similar to General Packet Radio Services, or at 2.5G rates.

Spectrum Cap
Mr. Siber is encouraged by the recent decision by the FCC to withdraw the 45 MHz cap on spectrum by 2003 and hopes it will prompt a round of consolidation in the wireless sector. Instead of the wireless landscape littered by numerous small wireless operators, each using competing networks standards, it could be dotted by few large operators using compatible standards and offering seamless services, he said.

Future Markets
"Youth have embraced [wireless technology]," Mr. Siber remarked at the end of the interview, "and it is just a question of when critical mass is reached." Without elaborating, he identified another area in which the American wireless industry is lacking: Attracting the future generation of mobile users — American teenagers. According to a new survey by McKinsey and Co., only 15 percent U.S. teenagers aged 15 to 19 own cell phones compared to 77 percent in Finland and 70 percent in Japan. Researchers also found that U.S. mobile operators have shunned prepaid plans which European operators have found to be the perfect way to attract the teenage market.

(Additional source The Irish Times)

Mobileinfo Comments & Advisory:  On the surface, the findings of this report are valid. Europe and Asia started from less-contaminated spectrum - kind of clean slate. They also did not have cheap fixed line infrastructure and methods of communication or entertainment. The telecom industry must recognize these differences and modify their strategy accordingly.  We see more consumer applications for the wireless Internet in Europe and Asia. On the enterprise side, differences of penetration are not that significant. Putting on different set of glasses, we could say that future potential is greater in North America.  

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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