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Dave Molta
Dave Molta

Obstacles Abound for Mobile Wireless Data

Financial viability in the wireless data industry is all about market share and year-to-year subscriber growth.

With pricing approaching a penny a minute and margins measured by economic micrometers, financial viability is all about market share and year-to-year subscriber growth. According to a recent market study by Technology Business Research, Verizon leads in market share with 22.4 percent, followed by Cingular (16.5 percent), AT&T (14.8 percent), Sprint (10.8 percent), Nextel (6.9 percent) and VoiceStream (5.7 percent). However, when viewed against a more important benchmark-- year-to-year subscriber growth -- Sprint comes out on top at 37.9 percent, followed closely by VoiceStream (36.4 percent), Nextel (27.4 percent), AT&T (19.5 percent), Verizon (9.1 percent) and Cingular (6.3 percent).

Increases in subscriber bases and in monthly per-subscriber charges (Nextel's $68 average is highest; Verizon's is lowest at $46) are needed to service the massive debt-burden these companies face mainly as a result of spectrum auctions and infrastructure build-outs. Worse, while economies of scale and technology upgrades have boosted the bottom line, marketing costs have soared and price competition has created a new consumer norm for what constitutes acceptable pricing.

Voice Still Rules

Every time I see the kids at my son's baseball practice scramble to figure out whose cell phone is ringing, I'm reminded that we're fast approaching a level of cellular voice density that nobody could have predicted. This level of connectedness has had a profound impact on business and society, fueled by technical development and cutthroat competition.

But wireless data remains, at best, an afterthought. Yes, in key vertical markets and among a sliver of the population we can refer to as mobile professionals, broadband wireless data has the potential to transform. But for most of us, the value proposition of making a phone call from your car is compelling, whereas the value proposition of accessing a Web site from your PDA is nothing more than confusing.

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