Inflection Point: Wireless Data Growth Offers New Opportunities

The scenario goes something like this: You’re out on the road and need to get access to a PowerPoint presentation. You pick up your smartphone and four-digit dial into the office. But your assistant, Bob, isn’t at his desk, so you can’t ask him to e-mail it to you (“Is he taking yet another smoke break?” you wonder). Plan B. By this point, you’re in your rental car, pointed toward Omaha (and you’ve gotten directions thanks to the GPS built into your handset), so you use its speech-recognition capability to access your desktop using your voice. Eventually, you’re saying “send file,” with an immense sense of self-satisfaction, and your heart is filled with a love for technology.

Sound far-fetched? Not at all. And the key is mobility. “Fixed-mobile convergence and unified communications are truly changing the culture,” said Grant Sieffert, president of the equipment vendor industry group TIA. “Operators and enterprise vendors are moving from wired to wireless, into a world where we will have a truly mobile environment, and the main thing that’s happening is that data is becoming the driver for the wireless market as more broadband gets deployed.” In fact, the TIA expects service revenue from wireless data to surpass that of wireless voice next year, with 84 percent of service revenue growth coming from wireless data by 2011. You could say we’re at the proverbial inflection point.

Behind the Rise in Data Usage

Sending presentations and data applications are giving rise to a need for better coverage, driving more data plans and bolstering requirements for broadband wireless. All of this is creating a fount of opportunity for channel partners and dealers that understand how it all fits together.

“VARs and other channel partners are in a prime position to capitalize on the trends because companies will turn to them to execute on the fact that workers want everything on the handset, on the laptop, everything mobile,” said Sieffert. “If they’re asleep at the switch, they’ll wake up and will have entirely missed the boat.”

The main drivers of enterprise and business wireless data usage are the mobility aspects of unified communications, and fixed-mobile convergence. So one way to make sure to catch the boat is by learning how to position UC and FMC offerings — and how to explain, simply, what they do. “You have to first of all make it simple and easy to digest,” said Pejman Roshan, vice president of marketing at Agito Networks. “You want to explain the applications, like four-digit dialing from a cell phone, or dynamic call routing so you can arrange to get calls from work only at certain hours — or if you’re at home, no calls get routed, perhaps. And then there will be auto-handover between the Wi-Fi in the office and the operator’s cellular network in most FMC deployments, so you have to explain how the service will be context- and location-aware.” Agito’s new version of its RoamAnywhere Mobility Router incorporates just these features, and natively integrates to Cisco Systems Inc.’s WLAN products and a variety of PBX systems. A client on the handset completes the picture. “It’s about making mobile workers more accessible and productive,” Roshan added.

Ah, yes. Productivity. TIA’s Sieffert said the need to do more is the No. 1 driver, particularly given the recessive times, for business uptake of UC and FMC, and in turn, wireless data. “In the business market, people want to have the office in the palm of their hand,” he noted. “They want to do things on the run, without having to stop back into the office. They want people’s jobs to be unencumbered by travel or location. It’s powerful to be able to provide that.”

Channel partners can feed this need with applications such as Avaya Inc.’s new speech recognition capability. The vendor has added speech commands and a “personal assistant” to the assembled features in its unified messaging platform, dubbed “Freedom of Speech.” Avaya’s Modular Messaging 4.0, available via channel partners, incorporates speech-rec access to calling and conferencing capabilities, voice, e-mail and fax messaging, enterprise directories and databases, calendars, contacts and task lists — from any telephone, including mobile handsets. “We want to make unified communications available to everyone,” said Diane Shariff, director of unified communications solutions at Avaya. She also echoed a common theme: “You have to improve productivity, and it has to be easy to use.”

Cisco and Nokia also are giving channel partners a way to play into the craving for wireless data. At the recent Interop conference, the two said they have more than 100 customers using their joint “mobile unified communications” products; Nokia E-series smartphones can gain all the functionality of a wired IP phone when connected to the Cisco Unified Wireless Network wireless LAN controllers and access points. Cisco actively is training channel partners to tap the wireless data trend with the combined products.

Meanwhile, ongoing efforts to create interoperability between various UC and FMC contenders will drive wireless data usage even more. For instance, Foundry Networks Inc., Microsoft Corp., Mitel Networks and Sun Microsystems Inc. have inked a deal to allow interoperability between their various products, including Foundry’s open infrastructure, Mitel’s UC solutions, Sun Microsystems’ virtual display clients and the big kahuna of UC, Microsoft Office Communications Server.

Such a deal is indicative of a future that Avaya’s Shariff describes as a pervasive anytime, anywhere convergence. “Unified communications won’t be won by one vendor,” she said. “It’s about having intelligence from multiple locations, inside and outside of the corporate network.” These locations, for instance, could be home, other people’s work locations, customer branches, partner sites and so on. But interoperability is critical for that to happen; once that nut is cracked, a handset will be able to four-digit dial anyone, or a business partner can initiate a mobile video chat with another partner at a different company via a buddy list, all with no special configuration. With interoperability, it just works. “That’s when you get UC for the masses,” said Shariff. Avaya, incidentally, interoperates with Microsoft, IBM and Adobe Systems’ conferencing.

The Work-Life Blur…and More Opportunities

The upshot of all this is a significant rise in mobile data traffic on carrier networks. With unified communications and more and more convergence, it’s no wonder that workers are performing more and more of their jobs outside of the office — up to and including while on vacation, on the weekends, after work hours, waiting in doctors’ offices, and on and on. While that might not be good news for those out there that appreciate “me” time, it’s great news for therapists, wireless service providers and the channel partners that sell wireless data plans.

“The line between life and work is going away,” said Sieffert. “And that means that you won’t be selling just businesses or just consumers. It will be both, because where you do what is no longer cut and dried.”

Operators recognize this and are accelerating the roll-out of 3G services to allow users to take advantage of data apps outside of the office. The most obvious example of this is T-Mobile USA’s buildout of an HSPDA network, the first commercial deployment of which is under way in New York City. T-Mobile said it would continue to roll out major metropolitan markets, and by the end of this year, it expects to cover those cities where most of its subscribers use data services. That’s good news for wireless dealers and channel partners, since 3G data plans typically come with a higher price tag.

“Somebody must have woken T-Mobile up and they saw the rest of the wireless marketplace was pulling away because of all the wireless data growth,” said analyst Jeff Kagan. “T-Mobile has never had any interest in all these wireless data services, but going forward, that’s where the growth is.”

However, in order to take advantage of 3G speeds, one needs to be able to connect to the network. One of the biggest challenges facing wireless subscribers is a lack of indoor coverage. That’s why femtocells and their ilk are expected to be a big trend, as carriers realize that 3G services will have limited success without addressing the indoor coverage issue. Research firm In-Stat accordingly predicts that femtocells, picocells and microcells are expected to surpass 31 million units by 2012. Essentially, these are modem-like CPEs that plug into a broadband connection; it then becomes a mini-base station, transmitting 3G throughout the space.

“Microcells, picocells and femtocells address these [coverage] challenges in a much more cost-effective manner [than scaling up macro base stations],” said Allen Nogee, In-Stat analyst. “By providing smaller and less powerful base stations in smaller areas, like public spaces, offices and even homes, carriers can provide better coverage in more specific areas without a huge capital investment.”

And that means more sales for 3G plans, plus the added benefit of selling additional CPE as part of the deal. It’s slowly starting to happen: Sprint-Nextel Corp. is the first to market with a femtocell-based service; but this spring, research and banking firm ThinkPanmure leaked the news that AT&T Inc. has inked a deal with ip.access Ltd., a picocell and femtocell infrastructure vendor based in the United Kingdom. Apparently, AT&T plans to sell up to 7 million femtocells, $500 million worth, over the course of five years, and will sell the devices for around $100. AT&T confirmed it plans to trial femtocells later in the year.

While femtocells are in their infancy, more and more options are in the works. One of the most recent announcements is the news that Nokia Siemens Networks is partnering with Pirelli Broadband Solutions, which makes CPE-like remote management systems for the connected home and office. The two are cooperating on the 3G Femto Home Access offering to deliver femtocell-based services to home and small office environments through various CPE models developed by Pirelli in compliance with the NSN’s open architecture. The CPE is installed at the subscriber’s home in the same way as xDSL/Wi-Fi modem.

“Whether at home, work or on the road, wireless data is changing things almost overnight,” said TIA’s Sieffert. “If you don’t follow this, you won’t survive.”


The Consumer’s Long Tail

While businesses long have been the target for channel partners, the blurring of the line between work and home life is leading to the phenomenon of going in to pitch an SMB on unified communications, only to end up quoting something that includes a wireless data plan that covers personal usage as well.

“We have over 250 million phones in the U.S. marketplace and there are only about 300 million people,” said analyst Jeff Kagan. “To continue seeing growth, wireless carriers are focused on expanding their wireless data offerings. That’s why we are seeing live television, movies, banking, games and assorted other features that are growing rapidly. Customers love the idea of doing things other than just talking with their cell phones.”

Some applications are bigger than others. For instance, ABI Research predicts that more than 550 million GPS-enabled handsets will ship by 2012.

In the wake of personal navigation devices’ success, cellular carriers have started to offer on-board and off-board navigation solutions, as well as a range of location-based services (LBS) such as friend finders and local search on GPS handsets. Community and social-networking-related functionality, such as the sharing of points of interest and geo-tagged pictures, also is becoming popular and thus, ABI expects that to boost GPS-enabled handset uptake as carriers, handset manufacturers and service providers look to capitalize on the LBS trend.

Then there’s text messaging, which right now accounts for about 70 percent to 80 percent of non-voice mobile revenue worldwide. Analyst firm M:Metrics in a February survey found that 48.6 percent of mobile users have sent an SMS — that figure was 39.2 percent last year. And now, mobile instant messaging is about to roll out. Although it is used by only 8 percent of global mobile consumers, according to a study from TNS Global Telecoms, that is poised to change as operators make it more available. In turn, that just drives wireless data usage even further.

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