Early in 2009 we issued an article entitled “2009 Wireless Industry Outlook: The Top Ten List for the Year of Transformation.”  It is time to review our top ten list to see how well our bets were placed.

We think that 2009 has proven to be a particularly formative year:

• Verizon solidified plans for deployment of LTE:
• Announced Alcatel-Lucent and Ericsson as prime infrastructure suppliers
• Issued LTE device specification
• Gave more guidance on rollout plans
• Made progress in trial deployments
• The pace of acquisition emerged from the deep-freeze economy to be ignited across network and wireless infrastructure, middle tier software and service providers:
• Verizon closed the Alltel acquisition, AT&T, Windstream, and several international operators
• Cisco acquired Pure Digital Technologies, Tanberg and Starent Networks
• Ericsson acquired Nortel GSM and Torrent Technologies Corp.
• Motorola acquired BitBand
• WiMAX met our predicted growth trend: slow but steady due to economic factors.
• Increased number of Google Android handsets including first Motorola DROID based on Android 2.
• Continued growth of iPhone sales but also issues of service quality due to capacity constraints.
• FCC proposed new Open Access rulemaking.
• Verizon and AT&T initiated lawsuits and advertising battles over 3G wireless broadband coverage, setting the stage for the 4G battle to come.
• The US government broadband stimulus program met some snags due to the mountain of proposals received.
• Mobile broadband usage met or exceeded most operators’ expectations despite economic slowing.
• Mobile applications drove a greater percentage of handset and subscriber sales: iPhone entered the year at a distinct advantage. Google Android ended the year with significant momentum.
• The hype for Smart Grids resulted in little impact on the market.
• CTIA and individual operators clamored for additional broadband spectrum amidst the pincher of rising demand and looming capacity limitations.

2009 shaped up as a year of emerging rational optimism that things are looking up for the industry. A significant emphasis was seen in video devices, infrastructure and software services, making this stand out against the relatively subdued landscape. 

Overall, we must say that 2009 was not as disastrous a year as it seemed at the outset, starting as it did with the catastrophe and bailouts for the financial industry, real estate, and the auto industry. Rather, 2009 was a year of preparation and consolidation that has returned to a more rational phase, characteristic of the boom-bust roller coasters we have experienced over the past several years.

A Review of Broad Industry Trends:

Trend #1 - Flat and pre-pay plans gained increased market share during 2009. While this put downward pressure on ARPUs and margins, the industry was bolstered by the complimentary rise in 3G broadband.

Trend #2 - Corporate moves to control spending did not stall shifts to greater use of communications. Similar to trends we have observed in Cloud ICT/Computing, organizations have reacted to the economic downturn by relying on technology coupled with communications to become more efficient.

Trend #3 - Government initiatives for broadband infrastructure and service development have gone forward in the US, China and Brazil to name a few. While many are supplemental to ongoing efforts, increased government spending was significant.

Trend #4 - Operators stressed applications and a unified web-enabled experience more than ever before. The usage model has experienced a dramatic shift,which is evident in the rising market shares of Apple iPhone, Samsung, RIM and other web-device competitors. Google Android has made significant inroads. More impact is likely to be seen in 2010 however, as Motorola and other suppliers gain momentum.

WiMAX Market Trends:

Trend #5 - Not surprisingly, WiMAX felt the impact of economic slowing, putting pressure on Greenfield operators. Towards the end of the year, several suppliers reported that a bottom had been reached and expected an upturn in business – modest or otherwise – going forward.
Trend #6 - Underserved markets including Russia, Malaysia, and the African continent saw robust growth. A few markets such as India continued to see delays in spectrum auctions and deployments.

Trend #7 - Clearwire provided greater visibility into their deployment schedule early during 2009 and exceeded their goals for deployments: deploying in 27 cities by the end of the year and disclosing plans for several more for 2010. Google Android did not become available on the CLEAR network even though it became widely available on 3G.  The rumored availability of Motorola Android phones on WiMAX did not come to pass.

Trend #8 - Verizon began 2009 claiming it would have at least two pilot networks deployed by the end of the year. Although trial deployments have been made, VZW has made no announcements and has shifted its strategy to ‘all at once’ rollouts.

Trend #9 - As expected, several operators have nudged out their earlier forecasts for commercial availability of LTE service into late 2010 or early 2011. As development proceeds towards more realistic launch dates, some of the pre-launch hype can be expected to fade.  Additional operators announced they would upgrade to HSPA and HSPA+.  But we also witnessed additional plans to deploy LTE multi-carrier networks including harbinger turn-about by AT&T.  We have long advocated this route for MIMO-OFDMA based networks.

Trend #10 - Sprint and Clearwire have seen momentum in sales of 3G+ WiMAX multiple mode. Time Warner and Comcast launched Clearwire WiMAX and Sprint 3G service plans. Comcast said that performance and sales have exceeded early expectations, enthusing a further spate of investment.

We think that 2010 will shape up to be a better year for wireless industry growth overall. However, creative destruction will move forward as well. We will be issuing our forecasts for 2010 in January.

For more information you can contact the author at robert@maravedis-bwa.com

Copyright © 2009 by Maravedis Inc. All Rights Reserved.
No reproduction without consent.



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