Broadband in Our Pockets

I’ve never been very optimistic about using the wireless platform to deliver effective marketing communications. But now, based on what I’ve seen most recently from AT&T Wireless and what Verizon Wireless proposes for January 2005, I think I may have been shortsighted.

3G (standards-based, mobile packet voice and data service) wireless services are here.

To understand the wireless industry at a high level, we must dive into an alphabet soup of definitions. Without getting into a tremendous amount of detail, the wireless industry is divided into three basic technologies: GSM/GPRS, CDMA, and integrated digital enhanced network (iDEN).

GSM/GPRS is an international standard (phones are therefore usable in most places around the world) and powers Cingular, AT&T Wireless, and T-Mobile networks. CDMA is the technology behind the Sprint PCS and Verizon Wireless networks, and iDEN is the driving technology behind the Nextel direct-connect (walkie-talkie) network. Neither CDMA and iDEN have a wide international footprint (notably, CDMA is the leading wireless technology platform in South Korea, one of the most broadband friendly markets in the world).

At the beginning of 2004, most major wireless carriers were operating in what’s known as 2.5G, delivering theoretical bandwidth speeds of 20-40 Kbps for GSM/GPRS and 60-80 Kbps for CDMA. If you’ve ever tried to access data services on these devices, you’d agree that for the most part, the experience is slow and painful (much like a 28.8 modem).

Today, wireless providers are rolling out the next generation of handsets and networks. They’re sure to revolutionize the way we use handheld devices in the U.S. GSM/GPRS networks (AT&T Wireless specifically) have already begun rolling out data services (known as EGDE and UMTS). CDMA networks like Verizon Wireless will be rolling out evolution data-only (EVDO) services by next January. EVDO will deliver throughput in the 300-500 Kbps range, with bursts of up to 2 Mbps. This is comparable to DSL speeds.

We’re going to have broadband in our pockets.

What does all this mean to the consumer and to those of us trying to connect with that consumer? First, it means the time spent with the handheld device will increase exponentially. “Time spent” with our media research must include a new platform (as if we didn’t have enough already). No longer will our use be confined to voice services. Increasingly more consumers will use data and multimedia services. Music, video, videophone, and other packet-based transmissions will become commonplace extensions of the wireless handset.

Already, most wireless carriers are trying to figure out their content strategies and are aligning themselves with providers that will offer the content needed to grow consumer usage and adoption of data services in coming months. Carriers are also grappling with a new business opportunity: network broadcaster.

With the large wireless carriers aggregating “audiences” in excess of 30 million consumers each, their business model is sure to morph into a network advertising model much like ABC, NBC, and CBS. Increased content delivery will translate into increased advertising and marketing message delivery, which must be handled carefully if bandwidth is paid by consumers.

That leads to some of the real unanswered questions in the wireless equation. Though I’m becoming a firm believer this will happen, a number of wildcards are still in the mix. First, pricing. Naturally, all the packet data services will come with an additional monthly cost on top of the already pricey voice plans. We must ask ourselves at what point the consumer will revolt against increasing monthly charges to deliver news, entertainment, and communications across all platforms.

The other major wildcard that will help determine how rapidly consumers adopt these services is how compelling the offer truly is. One can only imagine the leading content creators will begin optimizing content for the “small screen,” and their breadth of offerings will be appealing enough to a mass audience. Will a mass audience be willing to pay additional charges every month, in addition to “suffering through” some advertising and/or marketing messages?

What do you think the prospects are for the wireless industry? What are the timetable and the industry’s key barriers? Drop me a note, and let me know what you think. I’ll be sure to report back in upcoming columns.

Join us for Search Engine Strategies 2004 in San Jose, CA, August 2-5.

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