Cellular pioneers offer industry outlook

A blast from the past arrived toward the end of the first keynote session of the CTIA Wireless I.T. and Entertainment conference in San Francisco in the form of two sage industry pioneers toting brick-like phones circa the early 1980's and dispensing advice about the future of the wireless industry.

Craig McCaw, the founder of McCaw Cellular and Clearwire Corporation, and John Stanton, founder and former CEO of Western Wireless Corporation (now Alltel) and the former chairman and CEO of VoiceStream Wireless (now T-Mobile USA), looked back nearly 25 years at the origins of the wireless industry with CTIA CEO and President Steve Largent and looked forward to what is needed for the industry to continue to grow.

McCaw recalled how at the start of the industry there were 1,000 mobile phones in the Bay Area out of a population of 5 million. Pagers were all the rage. AT&T had a 60 percent market share hold on telecommunications. And then along came cellular phones and no one, least of all AT&T, had any idea what it would mean.

Largent asked Stanton whether the industry as it was when he started up in Seattle in the early 1980s resembled the Wild West. Stanton described an environment where the business was fragmented, the Bell system was in turmoil, and roaming was discovered by accident when someone made a cell phone call from Seattle to an employee of his who was in Portland and the call went through.  He also whipped out an ancient brick-like cell phone that he said cost $4,000 when it was first retailed.

The two also turned to the present state of the industry and its future, and Stanton noted with enthusiasm that regulation policies in the United States have positive and negative aspects, where business fragmentation continues with the sale of spectrum but innovation is encouraged, with WiMAX companies like Clearwire being spawned and allowed to have enough spectrum to potentially compete with carriers like Verizon Wireless and AT&T. He compared the situation to the market in Europe, which he described as standardized but constrained.

McCaw for his part was enthusiastic about Clearwire, describing the company as Don Quixote having the ability to fight another windmill.

"There's something better that can happen here and let's not get held back by the past," he said.

He said in the future the success of data services will depend on cost and quality, and that punishing customers is not the answer, saying that innovation is everything.

Stanton said there were two levels of myopia in the industry now, with U.S. carriers focused exclusively on the domestic market and innovations, when in reality they only cover 2 percent of the world market. He said scale is being ceded to foreign countries.

He also said that with open access, one of the key themes is that carriers risk turning into access providers, where they let their growth be tied to the growth of the overall economy.

"The U.S. has got to get out of its own way," he declared.

Click here for photos of this keynote...

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