Jarich: Market predictions, LTE, WiMAX, enhanced voice and the customer value proposition

Peter Jarich Current AnalysisHappy New Year.  Hopefully you're reading this after getting a chance to relax over the holidays.  Or, maybe you work for one of those companies where everyone takes off through the 1st week of January and you're reading this well into 2011;  if so, you better be relaxed... and can you please write my boss to tell him how much more productive the added vacation makes you?

Last month, I alluded to our 2011 wireless network predictions before turning to focus on a much narrower topic: the intersection of femtocells and LTE.  This month, I want to take the opposite approach, touching on our expectations for 2011, then turning to a much broader topic. 

To paraphrase my thoughts from December, developing a conservative set of predictions for 2011 is relatively straightforward--nothing that requires a crystal ball or tea leaves. More commercial LTE networks will get launched. Vendors will begin demonstrating LTE-Advanced solutions... or, at least, LTE-Advanced technologies. We'll see broader trials and, even, commercialization of TD-LTE (mostly in China, but not entirely). Vendors looking to differentiate their LTE solutions will begin playing up their SON capabilities, particularly as they gather real-world SON proof points. Additional femtocell services launches will take hold, but few operators will move beyond selling femtocells based on a voice coverage/quality value proposition. Outside the home, the importance of small cells (call them picocells, metro-femtos, super-femtos or whatever else you want) will become more apparent as operators look to make the most of their spectrum resources; vendors will follow the demand with new small cell products. WiMAX will continue to suffer under the weight of LTE. Voice--despite the increasing importance of mobile broadband--will continue to be the major money maker for most operators. This will be reflected in an interest around CDMA2000 1X Enhanced and HD voice.

Rather than reflecting or elaborating on any of these predictions, however, I want to focus on one word that kicked off all of these thoughts: straightforward. 

Framing any prediction or expectation as, "straightforward" makes an implicit assumption. It assumes that the future is nearly a foregone conclusion. It's something we all do, and it makes sense with things like LTE launches in 2011 since many have already been telegraphed. It gets dangerous, though, when we begin taking the adoption of any technology for granted.

I was reminded of this at a femtocell conference a while back when the suggestion of consumers not actually seeing a need for in-home base stations was met with shock, based on the argument that femtocells are necessary if operators want to keep up with data demands. More recently, I had the same experience listening to a "top 10 films of 2010" wrap up that (despite stretching past 10) only included two mainstream movies, based on the notion that art films and documentaries were all that deserved critical acclaim. In each case, an insular world view led to a relatively distorted vision of reality. Sure, operators may need femtocells to meet their business objectives, but that doesn't mean that consumers will see the value. Sure, critics may swoon over dense, well-produced documentaries, but the average viewer tends to want a little more variety come date night.

So, returning to our 2011 predictions (and any others you might see from diverse sources), what's the relevance?

Put simply, as certain as any prediction may seem, most are less certain when we leave our little bubbles. Yes, we know LTE networks are coming. Service uptake, however, will require compelling applications and planning, along with lots of marketing. CES is showing us that vendors will be bringing lots of tablets in 2011; assuming that uptake is assured, however, is naïve. Enhanced voice services, likewise, will be lunched. Their longevity (IE, will they be around in 2012 or 2013) will depend on the value proposition--including pricing--vs. competition. WiMAX may be a long-term loser compared with LTE, but it's still going to be delivering solid services in the medium-term.

As we go into 2011, those of us in the wireless industry might think the broad trends are obvious--pre-ordained. If we never step outside our bubble, however, it's too easy to miss the customer value proposition. It's too easy to take things out of context (or ignore the larger context). This is where predictions break down.

Peter Jarich is the Service Director leading Current Analysis telecom infrastructure practice. Follow him on Twitter: @pnjarich.

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