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Predictions

10 predictions for 2006

Posted by on 11.03.05 | 1 Comment

According to Cellular News inCode has released its Top 10 Global Wireless Predictions for 2006. It seems like we’re at that time of the year again!

inCode’s are interesting not the least because they claim to have got 90% and 80% right in the last two years. Yikes, that’s almost as good as us - but you’ll have to wait a bit for ours, as being quaint and old-fashioned, we think that these things are best tackled round about the New Year.

There’s some interesting stuff here, although you don’t get a 90% record by going too much out on a limb. However, these were some I found worthy of note:

1. Music MVNO

They predict that an MVNO will emerge specialising in music and entertainment - they just stop short of suggesting Apple in this role but it’s difficult to see who else could pull it off. This is particularly the case as such an MVNO will have a degree of “coolness” and “… this innovator will resolve pricing and download disparities”. And sort out world peace in their spare time, I should think.

Having said that Amp’d is pitching its hat at this market too, so this is going to be a hot sector for 2006.

2. Advertising funded Voice Calls

They predict that it’s going to be a big year for VoIP, with new models emerging, such as advertising being the revenue generator and voice the loss leader.

Hmm, not so sure about this one. If we’re talking VoIP from computer to computer, Skype has already set the standard of free, no strings attached and because of that people put up with very dodgy quality at times. If companies start trying to belatedly introduce interruptive advertising into the conversation, people will abandon it in droves.

3. Mobile TV Struggles

Analysts seem to be divided on this one, with some arguing that it’s the greatest thing since colour TV and others saying it’s a pig. Personally, I fall more into the later camp. I certainly see that there’s a demand for mobile TV of some sort - I’m just very sceptical that the demand translates into willingness to pay extra for it.

4. Wi-fi Vs 3G

It’s been a while since I tried a 3G phone (2 years or so, since I gave up in disgust) and I’d assumed that the teething problems were resolved, especially given the success of 3 and more latterly Vodafone in the UK. However, this report suggests that reception of 3G in Europe inside buildings (!) is not so hot.

If true, this leaves an opportunity for a 2.5G and wi-fi combo that could see off 3G pretty much permanently.

Anyone have any experience of a contemporary 3G phone in Europe? Can you make calls inside?

5. First Bit Pipe Operators Emerge

This would be quite radical as it suggests that an operator will bite the bullet and abandon its retail brand altogether, retreating into a wholesaling role for a series of MVNOs. If operators were truly honest about their core competencies, this does actually make a lot of sense. They get to specialise in network infrastructure, engineering and technology innovation, all of which they do very well. Someone else gets to look after the customer relationship, branding and marketing, pricing and services, which many of the operators don’t do well at all.

The problem with this approach is that the operator is left with a commodity-based business, which means that it’s very exposed in the future. A commoditised service invariably can only sell on price in the longer term, leaving it very vulnerable to the emergence of cheaper competition.

However, given the huge investment required to launch a new network, it’s unlikely that competition would ever emerge from that source. Meaning that the first mover to abandon its retail brand and the massive cost-base this represents would be able to make hay for some time and steal significant business from its still-encumbered competitors.

But it would take a truly brave board of directors to see this initiative through and I can’t see it happening in 2006.

So that’s my comments on their predictions and the others are worth a read too. Look out for MobHappy’s predictions in the next few months.

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