By Lawrence M. Walsh, CEO and President, The 2112 Group
Over the next two years, Sprint Nextel will pay Clearwire more than $1 billion for access to its 4G network. The deal is as much about enabling the mobile cloud as it is about intercarrier competition with AT&T and Verizon Wireless. Deals such as this may also accelerate cloud convergence.
For many observers, the Sprint-Clearwire deal may seem like a catch-up maneuver following AT&T’s pending $38 billion purchase of T-Mobile. In reality, though, this deal is more about speed than accounts acquisition, and clearly aimed at the mobile cloud.
Carriers make their money on telephony lines and account activations. It’s a good business, until you get to market saturation. That’s when they start doing share shift, which is what the AT&T/T-Mobile deal is all about. The two companies coming together will create the country’s largest wireless provider, besting Verizon Wireless.
But being bigger doesn’t necessarily mean better, especially when the game is shifting from user activation to share shift. In that contest, it’s about account retention, and carriers do that with better service and features. And increasingly, that’s more about mobile data than voice. It’s the reason Verizon is looking to expand its 4G coverage by 140 new markets in 2011.
How much faster is 4G? Don’t ask Ozzy Osbourne or Justin Bieber. As they say in car sales, mileage may vary. Tests have clocked 4G speeds at different rates, much of it depending on the processing power of the mobile device and signal strength. The latter is part of the drawback. Many 4G users have discovered their devices crawl in most areas, since they can only access 3G service. The race is getting to the faster network.
Speed is important if we really want a mobile cloud – or just plain mobility. Software and service providers want to push more applications to the edge of the cloud, and that’s increasingly mobile devices like the Apple iPad, Motorola Xoom, and Samsung Tab. But it’s also about business-class devices, such as the Motorola MC-9500, Panasonic U1 and the Intermec CV60. All of these devices are increasingly being used for enterprise purposes, and having reliable and fast connectivity from any location is evolving form a “nice to have" to a “need to have" business requirement.
With more speed comes greater convergence between the IT and telephony channel. Solution providers and agents on both sides of the channel divide will be called upon to build and support mobile solutions that meet the specific needs of their clients. It’s already happening today, but the limited performance of mobile devices and speed limits on wireless networks is inhibiting progress. The greater availability of Clearwire 4G over a broader Sprint network expedite development.
4G wireless remains relatively new, but rapidly evolving. The Sprint-Clearwire deal underscores the importance of speed and network capacity in the evolving mobile cloud era. With faster networks may come greater convergence between the two channels to support mobile business needs.
Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships, and principle blogger at Channelnomics . He’s also the executive director of the Channel Vanguard Council and moderator of the Channel Partners Cloud Convergence Council . He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at firstname.lastname@example.org .
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