Articles by Mark Lowenstein
Among the wave of M&A that has swept the wireless industry in recent years, I believe Dish-Sprint offers the most intriguing possibilities for innovative service and business models. The combination of assets could help re-define what broadband and video delivery services look like, over the next five years.
It is March 2013, and we are nowhere near where we thought we would be with mobile payments in North America. There's huge velocity in the area, be it investments by major players, committed VC dollars, conferences, analyst reports, and so on. But mobile payments have impacted relatively few consumers' lives to this point.
Susan Crawford paints a bleak picture of the state of U.S. broadband services in her book, "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age." In it she argues that Internet access is slow and expensive. She is right, to a point. Up until now, the cost of deploying broadband, particularly given U.S. demographics, density, and reliance on private market forces, might have led to a natural monopoly or duopoly. On the landline side it is cable and FiOS winning the battle, and in wireless, Verizon and AT&T have some 75 percent of 4G subscribers.
The theme of my 2013 "predictions" piece was that this is going to be a year of "disruption" across many elements of the value chain. I'd like to delve a little deeper into a discussion of business models and pricing, where I think we will see both disruption to prevailing structures, and experimentation around new forms of monetization. I see this happening in many sectors of the mobile space: operator pricing, video over mobile, "content everywhere," and applications.
For 2013, I believe there will be some important changes in the mobile industry value chain and prevailing business model, and in some adjacent industries where mobile plays a strong role. Hence, the theme of my annual predictions piece: 2013: Year of Disruption.
With the success of tablets, and at least modest cannibalization of PC sales, there has been a vigorous discussion about what the next era of "computing" will look like. I think we should be including, in this discussion, the "post-smartphone" era.
There is no question that spending on wireless networks will contribute its fair share to global GDP for the foreseeable future. However, the march toward true mobile broadband is going to be a decade-long phenomenon. It will be highly dependent on country/operator/spectrum/population density/investment density/data demand. Along the way, there will continue to be "flavors" of 4G, where we will see, for example, HSPA networks that outperform LTE networks, based on a host of factors. Numerous entities have tried to define what a "4G" experience is, and operator marketing organizations have been rather liberal in their interpretation of 4G.
The American Customer Satisfaction Index (ASCI), which measures customer satisfaction with leading companies across nearly 50 industries, shows that wireless operators consistently rank on the lower end in the telecom and media sectors, and that as an industry we are trending slightly down. Most people think their phones are good or great. So, why isn't customer satisfaction with wireless services higher?
Smartphone growth, especially in the postpaid segment, has started to level off over the past two quarters. This might be due in part to heavy anticipation of Apple's next iPhone, which the company is expected to announce in September. But, with smartphone penetration at about 50 percent of the U.S. subscriber base (and nearing 60 percent of the postpaid base), I believe we are starting to see some signs of saturation in smartphone adoption. Getting the next 25 percent of smartphone subscribers is going to be a lot more challenging, and will involve different competitive dynamics.
Having an Olympics every two years is an interesting benchmark for the status of "content anywhere"--the idea that consumers can access any content on any "screen," using the fixed or mobile network