Wi-Fi is Hot at CTIA, Hope Remains for 3G

By Thor Olavsrud

March 21, 2003

CTIA Wireless 2003 has been characterized by real products, real engagements and partnerships. Wi-Fi and new handsets have taken center stage, but many remain hopeful for 3G.

NEW ORLEANS -- Hype and whiz-bang technology ideas haven't been much in evidence at the CTIA Wireless 2003 show in New Orleans this week. Instead the show has been dominated by real products, real engagements and partnerships designed to integrate existing technologies to make a more seamless whole.

Most attendees and exhibitors seem optimistic about the industry, a far cry from the gloomier picture that has pervaded other sectors of the telecommunications industry in the past year.

"Last year it was people talking about what they were going to do," said Brian Flanagan, manager of Content and Browser Applications Products and Services for Canadian carrier Telus Mobility. "This year it's been people talking about what they've done."

As widely expected, Wi-Fi technologies took center stage at the show, which had nearly ubiquitous Wi-Fi coverage with the help of T-Mobile. Wi-Fi deployments were hot, as were examples of the integration of Wi-Fi with GPRS. For instance, T-Mobile tapped Boingo to help it create a solution on the carrier end, while Lucent demonstrated gear and Texas Instruments showed off a new reference design that incorporates Wi-Fi, GPRS and Bluetooth radios in a single device.

Many are hopeful that mobile data services using 3G technology will take off, despite the fact that carriers have drastically scaled back 3G deployment. Conventional wisdom in the industry is that carriers that are deploying 3G equipment are doing so to increase voice capacity, and not so much to support data services.

That was the stance of Motorola CEO Chris Galvin, who used his keynote interview Monday to urge carriers to keep their focus on voice, which still delivers between 90 and 95 percent of carriers' revenue in the U.S.

"Just because we can do something doesn't mean we have to do it," Galvin said, noting that it is premature to turn attention to data services when the voice infrastructure still requires work.

VC firm Siemens Mobile Acceleration, which opened shop in the U.S. about three weeks ago -- though it is already established in Europe and Asia -- takes a different view. COO Dr. Min-Kin Mak said it is a good time to invest in data services technologies, with both European and Asian markets already proving fertile and signs that at least some types of application may spark the imagination of U.S. users.

"Also, valuations are extremely low," he said.

Mak said Siemens Mobile Acceleration, the investment arm of Siemens Information and Communication Mobile Group, is taking an aggressive stance on the market, looking for investments that run the gamut from mobile data services to Wi-Fi to Bluetooth. In the past two years, the company has received more than 2,000 proposals, and has built a stable of eight companies. They include Swiss text-to-speech mobile solutions provider SVOX; Sweden's appload, which specializes in mobile content download; Swedish mobile multimedia company mediabricks; Sweden's thephonepages, which has a platform for linking phone numbers to mobile Web pages; Chinese mobile games maker Magus; Chinese mobile marketing solutions maker mobile2win; French-based universal keyword navigation specialist MotionBridge; and Germany's scaraboo, which focuses on mobile betting and gaming.

Mak said Siemens will add two more companies to its portfolio within the next six months, with a focus on companies that can demonstrate a real business case, and ones that can clearly differentiate themselves from competitors.

"The companies we focus on really realize it is about making business," he said.

As far as data services go, Mak said that it has become clear that the Asian market is driven by entertainment applications, while Europe is about both entertainment and information services.

"The assumption about the U.S. is that the enterprise plays a central role," he said, though he noted that no one is yet clear exactly what will get enterprise customers to sit up and take notice.

Flanagan suggested that much of the resistance in the U.S. to mobile data services can be laid at the feet of early promises concerning the 'wireless Web,' which went unfulfilled and also suffered at the hands of a frustrating interface.

"People were disappointed with the interface of the wireless Web and walked away," he said. "Now we have to try to bring them back."

While those early disappointed customers are extremely difficult to convince, Flanagan said the changing nature of services does make a difference.

"We've gotten to the point where we're not selling services as technology anymore," he said. "We're selling services as services." That means that customers understand the value proposition inherent in the services and so are much more willing to give them a chance.



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