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Home Page Editorial
March 18, 2002 )

From Publisher and Managing Editor's Desk... 

What Can we Learn From CeBIT in Europe and CTIA Wireless Show in Florida, USA? 

There are two important events taking place in the wireless world during march 2002. In Europe, you have the largest IT show in the world - CeBIT. Across the Atlantic pond, is the CTIA's Wireless annual conference and show. There are contrasts and similarities among the two super shows. CeBIT is large, expansive and upbeat about wireless devices, networking and applications. While CeBIT is predominantly European, it is more inclusive representing the viewpoints of Europe, Middle East, Africa  and Asia. CTIA, on the other hand, reflects trends and wireless evolution more from North American perspective. CTIA wireless show is trying to drum up the same level of enthusiasm as CeBIT but it comes up short. Why is it that World's largest market is lagging behind Japan, Asia and Europe in moving the industry forward? " Here are our views on the subject, anyway:

There are obvious differences in the level of penetration, pace of technological progress, rate of adoption, signs of enthusiasm and depth of expertise between North America and rest of the world. We can rationalize these differences in a number of ways. We shall try to analyze these differences from a number of perspectives. we shall also go beyond the perception on the surface to something that is closer to reality.

  1. If we use the metrics of the per capita cellular phones, the number of minutes they use these phones and the ARPU that wireless service providers, certain Asian countries (Japan, Korea and Hong Kong in particular), Japan and Scandinavian countries in Europe have either already moved ahead or will shortly move ahead of North America. Cellular subscribers in Asia, Japan and Europe rely on their cellular handsets more for their routine communication, messaging, games and  entertainment than their North American counterparts. SMS is a great success in Europe. In North America, it has just started. While Canadian carriers signed an agreement for inter-operability in late December, 2001, major carriers in USA signed an agreement February 2002. It will take sometime before it becomes operational.
  2. Overall, 2.5G (GSM/GPRS) and -3G (1xRTT CDMA) wireless network deployment is significantly ahead in Japan and Korea and somewhat ahead in Europe. For those who insist on simplistic (and inaccurate) comparisons, experts believe, Japan & Korea are 2 years ahead and Europe is one year ahead of USA. North America suffers from spectrum problems that do not exist elsewhere. FCC is only partially responsible for these problems.
  3. In terms of installation of 2.5G/3G software infrastructure to support application services (we mean micropayment, billing, customer care, QoS and management), there is a greater gap than network deployment. This is what converts technology into business operations. To use an analogy, in America, we have started building plazas and stores but we do not know what kind of merchandize we are going to sell. We do not even know what kind of cash register we are going to install in our stores. Nor do we know how we shall service our customers. 
  4. While North American network providers can learn a few lessons here and there, there is not a lot they can do to change the fundamental cultural differences, existing telecommunications environment, surrounding regulatory climate, and alternative methods of communications and entertainment prevalent in North America versus rest of the world. We at MobileInfo are suggesting that we must look at the problem in a holistic fashion. Whenever you look at a market and consumer life style in isolation, you never get all the answers.
  5. There are a number of valid reasons for the differences across the Atlantic pond. North American consumers have more widespread, cheaper and reliable fixed line infrastructure than the rest of the world.  Not only that, the older group of consumers in North America have only now started relying on their cellular phones for immediate messaging and communication. Rest of the world got instant gratification from cellular phones without enjoying the abundance of fixed line communication and they liked it. Hence it just took off in Europe. Some would say - so what? We are talking about wireless. We say, you can not untie one from the other if they serve the same human need - communication, entertainment and instant gratification.
  6. Most market research reports show a trend that shows that the gap between North Americans and rest of the world will decrease over the long haul (5 to 7 years). However, many including this website see the gap increasing in the short run. Again, there are legitimate reasons for this trend. First of all, the network providers in North America can not control the pace at which more and cheaper spectrum will become available and 3G networks operational. US dense establishment, North American entertainment and media networks (cable and TV) have legacy allocation of spectrum that is not easy to recover and give to wireless carriers.
  7. There are three wireless application orientations - Business to consumer(B2C), business to business (B2B) and business to employee (B2E). Wireless B2C applications (ringtone downloads, music downloads and wireless games are getting some traction in Europe but not much in North America. In terms of B2E, North America may still be ahead of Europe because we see a preoccupation here with improving business productivity. Hence, justification of  wireless applications for the enterprise is still easier in North America.
  8. Other differences - In Europe, smart phones are becoming default devices of choice. In North America, it is still the PDA. Blackberry, Treo might accelerate that process. We do not know if these devoices will displace the smart phones. Not likely. 

For your comments, click here

Chander Dhawan - Your Site's Principal Consultant and Publisher

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