Cellular Carriers under Siege

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: "monty solomon" <monty () roscom com>
Reply-To: "monty solomon" <monty () roscom com>
Date: Wed, 19 Mar 2003 11:58:26 -0500
To: "list" <list () roscom com>
Subject: Cellular Carriers under Siege

MARCH 18, 2003

SPECIAL REPORT: THE SQUEEZE ON WIRELESS

Cellular Carriers under Siege

As more rivals, such as Wi-Fi outfits, ISPs, and even radio
broadcasters, encroach on their turf, the wireless providers may need to
merge

Ron Lachman, a venture capitalist in Chicago, is one of the more intense
users of mobile communications you'll find anywhere.  He subscribes to
wireless services from Palm, AT&T Wireless (AWE ), and Sprint PCS (PCS).
But he says he does 98% of his wireless e-mailing and instant
messaging via Wi-Fi, a wireless method of connecting to the Internet via
a laptop.  When traveling, he picks hotels that offer Wi-Fi connections
or connects via T-Mobile's Wi-Fi service, a network of Wi-Fi hotspots
around the country.  He finds Wi-Fi faster and cheaper to use than a
cell phone.  In fact, "if money were more of an object for me, I'd
cancel one of my [cell-phone] subscriptions," he says.

The mass of people without Lachman's deep pockets could come to the same
conclusion, too.  Trying to make consumers think twice before renewing
their cell-phone contracts, companies are storming the gates of the
nation's wireless carriers with alternative technologies and services.

TIME OF WEAKNESS.  The threat comes at a time when the wireless carriers
are vulnerable after years of pell-mell expansion.  The Big Six --
Verizon Wireless, Cingular, AT&T Wireless, Sprint PCS, Nextel (NXTL ,
and T-Mobile -- have billions in debt.  Their revenue growth has slowed
to 20% annually from the triple-digit pace of the mid-1990s, delaying
sustained profitability for some to 2004 or 2005 -- a decade or so after
they started in the business.

Now, the carriers find themselves under attack in every cellular market,
from data transmission to voice calls.  The rivals range from Wi-Fi
providers and radio broadcasters to Internet service providers (ISPs).
If that weren't enough, proposed legislation that would let customers
keep their phone numbers no matter which carrier they move to threatens
to further intensify wireless competition -- and worsen the industry's
losses.

...

http://www.businessweek.com/technology/content/mar2003/tc20030318_0236_tc106
.htm





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