State of the mobile industry: Carriers

December 28, 2012
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    best-prepaid-plans 2012

    As we inch toward a true global conscience, we are increasingly dependent on being connected. Being connected is what defines us, with things like social media, blogs, and news sites. Here in the USA, we are fortunate to have a huge network of connectivity, but are we doing the right things with our network? While some consider the rest of the world behind on mobile technology, there may be a method to that madness.

    To better understand the world of carriers, we have to examine thing on a global scale. There are four very major markets to consider: Europe, Canada, China, and the United States. Each has their own set of challenges, and each has huge potential. Will the United States lead the way, or are we destined for another shift in how we as customers utilize carriers?

    Could there be a “global carrier”?

    With each of the previously mentioned markets, there is a lot to consider. While Europe is large and populous, it’s also made up of many smaller countries… each with their own set of concerns. Then we have China, a potential powerhouse with a very different set of political ideals, which presents a large hurdle. The United States and Canada are on different levels, but why? We’re so alike, yet so different. Perhaps something can be learned from the example we’re setting in North America.

    Europe is huge, populous, very interested in tech… and in trouble. If we are to consider Europe as-is, we must consider the problems they face. It seems that almost monthly we learn of a different country on the verge of collapse.

    With so much travel between countries, it seems logical that we’d see a few major carriers servicing all of Europe, but we don’t. We can identify the leaders in each region, but country to country things change very drastically. While Vodafone may be tops in Italy and Germany, which have the best market penetration in Europe, you can go just a bit north to Austria and find T-Mobile with a huge market share.

    While this seems silly to an American like me faced with the choice of a handful of operators, what’s important to realize is that even though they have a seemingly endless amount of carriers in Europe, they all operate on the same technology. Europe is a GSM region, and that makes travel much easier. So, while users may pay a wide variety of providers in different countries, they all operate on the same network. While Europe seems to be inching toward a few major providers in T-Mobile, Vodafone, and Orange, the variety of countries will make that process slow.

    Canada is a country which shares a border with the United States, but keeps it’s European sensibilities. The United States was very keen on building a robust LTE network quickly, while Canada seems a bit more content to operate on GSM. Of the three major carriers (Rogers, Bell, and Telus), all are offered nationwide… and all offer LTE. While LTE may be important, it’s not urgent to Canada.

    sprint-4g-lte

    When we talk about China, we must consider that they are a communist country. As a communist nation, their services are state-owned. While politics must be considered in this conversation, we’re not here to debate the pros and cons of any political system. They have three service providers, China Mobile, China Unicom, and China Telecom, all state-owned. They also have their own standard in mobile technology called TD-SCDMA. We could close the book there, but there’s a bit more to the story.

    Asia may be a gigantic region, but it’s still an emerging market. A recent report by Ericsson Mobility suggests 2018 could see roughly 8 billion mobile subscribers in the region, with a bulk of that share in China. A recent LTE conference in China suggests the world’s most populous country considers joining the rest of the world in adopting LTE, and the same report by Ericsson notes that, by 2018 China, will trail only the United States and Western Europe in LTE adoption.

    The United States is an interesting example of carriers and technology. We have four major carriers, and the division is clear. Verizon has the best network, while T-Mobile has the most affordable plans. AT&T is building a very solid LTE network, while Sprint is close behind. We have two carriers in Verizon and Sprint who operate exclusively on CDMA networks, while AT&T and T-Mobile both embrace GSM technology.

    In regards to contracted services, they are all competitively priced with one another. This parity amongst carriers’ plan offerings is wonderful to our wallets, but maybe not long term. Are we heading for a two-carrier system? While we have many smaller carriers in this country, we look to the major four carriers for a huge bulk of our service. If things continue as-is, we may be looking at a Verizon-AT&T monster.

    tower

    This is chess, not checkers

    T-Mobile recently acquired Metro PCS, a smaller but respectable provider in the United States. This is set to rebuild their eroding subscriber base, as well as improve their network. While that may seem like T-Mobile is serious about being a major carrier in the United States, let’s take a minute to reminisce. It wasn’t long ago that AT&T was set to merge with T-Mobile. Both companies were a bit surprised when the FCC blocked the deal for “ anti-competitive” reasons. So, is T-Mobile really interested in building itself for service, or are they building themselves for a sale?

    Japanese company Softbank recently purchased a controlling stake in Sprint, a move which surprised many. Why would a Japanese company invest in a struggling western company like Sprint? We still don’t know. We can speculate that their CEO, an eccentric character, is simply out to own the largest mobile tech company on earth. Assuming as much from a man who thinks having “four or five lines [of service] per capita is possible” may not be a stretch.

    Your everything plan isn’t everything

    There was a time when all we did on a mobile phone was make calls. We didn’t check email, and we didn’t have apps. We would call someone if we needed something, as that was the best way to get hold of them. In today’s world, we rarely talk on our phones. In consideration of a mobile plan, minutes available is usually the last thing on our minds. Things like data caps and tethering rule the day.

    It would be logical that with the way phones work (always connected) and the way we access them (we’re always connected TO them), the unlimited data plan would be the standard. For the most part, it is standard. Verizon, however, is trying to change things up a bit by offering shared data for families. We won’t debate the ins-and-outs of such a plan (Chris Smith did that nicely in the article itself), but what is interesting is that the largest company with the richest network is asking us to concede. While it may work financially for a family of four to choose such a plan, it won’t work for the individual.

    verizon-share-everything-plan-2

    When Verizon draws a line in the sand about data usage, it may seem like one company making a decision in their interest… but consider the ripple effect. Other companies may look to that example and react accordingly. Will we ever see an unlimited plan on an LTE network? Probably not, but let’s be hopeful. At one point or another in time, LTE will be the standard in all major markets. While the faster speed of LTE will allow you to access more data, remember that if your unlimited plan goes the way of the dinosaur, what does accessing more data matter? You burn through your data quicker every month, and that’s somehow better? We still have WiFi, but that’s not what a mobile carrier and mobile device are about.

    Dish Network

    What does the future hold for us?

    There was a question posed earlier about a global carrier that was never answered. In all our discussion today, there is one (currently) minor aspect of mobile carriers we didn’t discuss, and that’s the MVNO, or “Mobile Virtual Network Operator”. If you’re unfamiliar with the term, an MVNO is a third-party provider who simply piggybacks onto a network. This has the potential to severely undermine the major carriers who have plans we either can’t afford or don’t work for us.

    Let’s daydream for a second. Let’s assume that Google offers plans to coincide with the Nexus lineup, as they’ve been exploring. Google would operate as an MVNO, essentially renting spectrum from the various carriers who they license from. If a globally popular company like Google, with services that reach nearly every corner of earth, offered plans as an MVNO, it could be a real wake-up call to the industry. If popular enough, it would turn carriers into little more than landlords of mobile towers and antenna rather than actual service providers. With the popularity of unlocked Google devices such as the Galaxy Nexus and Nexus 4, this is entirely plausible.

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    Comments

    • http://filmitnow.moonfruit.com/ Brandon Wood

      Not trying to be a grammar stickler here, but “While Vodafone may be tops in Italy and Germany, which have the best
      market penetration in Europe, you can go just a bit north to Austria and
      find T-Mobile with a huge market share.” doensn’t really make sense. You mention both Italy and Germany, and Austria is north of Italy, but South of Austria.

      • http://twitter.com/ggSolutions123 solutions123

        I totally didn’t note that but ya it should’ve been “in between”

    • http://twitter.com/matter37 Matthew

      I will jump for joy if Google becomes an MVNO

      • http://twitter.com/ggSolutions123 solutions123

        I think I would likely jump for joy too. this is a super article to close out 2012. I’m going to link to it mucho.

    • Jj

      Sprint already has an unlimited plan on an lte network.

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