Telecom 2005: Wi-Fi still lags
Eric Lai
How soon before wireless Internet becomes ubiquitous?
When the evangelists for wireless disappear and are replaced by regular ol' folks complaining about their connection quality, you know that wireless has gone mainstream. That hasn't quite happened yet, although Wi-Fi has certainly become very convenient. Witness the thousands of Wi-Fi public hotspots at Starbuck's or McDonald's, which already have killed off cyber cafes. Pronto Networks Inc.'s equipment is being used in four citywide wireless networks. The Pleasanton company could be one of the winners as Wi-Fi extends its reach. Still, anytime-anywhere-wireless Internet access won't arrive until Internet service providers invest in WiMax technology, which can provide Internet access for an entire city with one piece of equipment.
What happens to cable and DSL broadband?
Broadband Internet deployment in the United States, or the lack of it, suddenly became a hot topic as a result of election year posturing: both candidates promised to pour energy and funds into it. Considering how many Americans spend their evenings surfing the Web, it may be hard to believe that our penetration rate for DSL and cable Internet doesn't even rank us among the top 20 nations in the world. That will change only if the telecommunications companies accelerate spending on upgrading our broadband infrastructure. If they do, it will help local firms such as Zhone Technologies Inc., Avanex Corp., Network Equipment Technologies Inc., UTStarcom Inc. and Netopia Inc., among others.
Who will dial I for Internet?
Internet telephony - also known as Voice-over-Internet-Protocol, or VoIP - made big gains among consumers and businesses in 2004, with startups like Vonage and big guys like AT&T heavily pushing it. Internet telephony is cheaper to deliver, cheaper in price and the sound quality is great. The service still hasn't reached a real tipping point; will that happen this year? SBC Communications Inc. may think so. It's rolling out residential VoIP service in 2005.
What happens in the cell phone market?
It used to be almost lonely at the top for Verizon Wireless. Suddenly, the company finds itself in a dogfight to keep from dropping into third place. The merged AT&T Wireless-Cingular now has 47 million subscribers; the question is whether they can keep that total from shrinking. And how many layoffs are in the offing for that company and at Sprint-Nextel? Also, the cellular broadband Internet market, also known as 3G, suddenly becomes the hot new battleground.
Will spending on telecom go up or down?
So many variables, so let's run through them: U.S. government encouragement of broadband deployment - up. Mergers of largest cell phone companies - down. 3G rollout - up. More possible mergers of ISPs and telephone companies - down. Growth in Internet telephony usage - up. Economic uncertainty - down. WiMax - up. Conclusion: too hard to call.
Reach Lai at elai@bizjournals.com or 925-598-1405.
© 2005 American City Business Journals Inc.
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