How Future Telco Wireless Plans Will Affect the Enterprise

AT&T Inc. and Verizon Wireless recently won the lion's share of the Federal Communications Commission's (FCC) wireless spectrum auction. Enterprise IT executives should understand how future carrier plans are likely to impact the rate of wireless technology adoption.

Focal Points:

• AT&T was one of the big winners in the recent FCC auction of 700 MHz spectrum. This spectrum was freed up as a result of television broadcasters abandoning this spectrum as they come up with new digital transmission channels for on-demand content. Officials from AT&T have stated that they plan on building higher speed broadband wireless networks with this spectrum. Some of the service expansion plans include higher speed data services, expanded voice, as new video services. Officials have further stated that using this bandwidth will rely on implementing next-generation wireless technology. While some of the bandwidth can be used to improve existing services, AT&T officials said that these new services are not likely to be available for at least three years. The spectrum AT&T purchased is not encumbered by the "open application" conditions in the spectrum Verizon acquired.
• Verizon Wireless is jointly owned by Verizon Communications, Inc. and Vodafone Group PLC.  Verizon Wireless spent a total of $9.4 billion on licenses from the FCC auction. Verizon Wireless officials said that their focus was on fourth-generation growth. Verizon will be required to have any acquired spectrum be open to all applications and devices. Experton Group believes this will be a big benefit to Google, Inc. They did not have to pay for any spectrum, and now have the potential of having their applications, which sit on top of the networks, be the real service differentiator.
• While the combination of AT&T and Verizon Wireless spent $16 billion, the effect of this purchase will not be felt by the enterprise for some time. The length of time that these service providers have to wait to implement the technology that will take advantage of the spectrum will make it difficult for enterprise IT shops to take advantage of these capabilities for at least six years. First, fourth-generation technology needs to be fully developed by handset and wireless technology company. Then, further money will need to be invested by AT&T and Verizon Wireless to deploy this technology, as well as creating the services that will use this technology. At the same time, companies like Google and Skype, Ltd. will have already deployed new applications that take advantage of existing technologies.

Experton Group believes wireless networks providers will find it difficult to drive compelling applications in the new wireless spectrum that enterprises will be able to take advantage of quickly. The rapid growth of web services and new Web 2.0 technology, such as mashups, will have a four to five year head start on anything wireless service providers will be able to do with fourth-generation technology.  IT executives should not wait for fourth-generation technology, but look at how existing wireless network technology can be better integrated into enterprise networks with Web 2.0 services and applications.