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Welcome to the Next Decade

It was not that long ago when the mobile phone business was analogous to voice services and revenue. There quite simply was not anything else to do with a mobile phone. All of the industry metrics were gauged on voice minutes of use. Average revenue per user was a bundle of voice minutes including roaming charges, peak and off-peak minutes, and overcharges for minutes beyond your minutes bucket for a fixed flat-rate. That has largely changed, and the shift continues.

What caused the shift? Initially, it was the merger between paging devices (standalone text) and mobile voice. PageNet and others are good examples of the service providers that lived in a mobile text world separate and distinct from full-duplex calls for many years. Then there was the BlackBerry (News - Alert), which began as a dedicated email device, but morphed in a full-blown mobile business device as it crossed over in to the voice world with the first “BlueBerry”. It could also store all of your Microsoft (News - Alert) Outlook contacts for one-click dialing, which was a major breakthrough. Obviously, the BlackBerry was squarely in the email camp from the start and as a result possessed an IP transmission core and therefore a natural inclination to bring more things IP in to the device. This served as the seed and primary motivation to convert circuit-switched voice in to VoIP, since email clearly would never be a circuit-switched application. This transition led to an even greater requirement for networks that were built to support packets and not circuits.

Email was decidedly different than just text, and still is. It is also very distinct from the legacy voice world of Erlang tables and circuit-based capacity utilization metrics for network planning. When all of these elements merged, IP won out as the transmission protocol. This in turn has driven Ethernet as the preferred transport protocol given the more efficient packet-based relationship between the two, leaving frame relay and ATM to see the same fate as TDM. As circuit-switched voice gets pushed aside for VoIP in the mobile world, it becomes the built-in demand driver for Ethernet. Once Ethernet transport is established it enables the scalability to support other higher capacity IP-based services to the mobile phones as well, such as video. This is what drives the development of new mobile applications.

Today the world views mobile devices and services in a totally different way. The world basically gets broken out in to five camps that matter most. They are the users, developers, device manufacturers, network operators and investors. They each feed off of the others in what is becoming a very dynamic furnace driving the engine of innovation beyond just the platform of mobility.




In simple terms, the users will use and spend money for access to applications that improve their lives in various ways. Access as a service is the single most important component, and it is created and offered by the network operators. They also offer the most basic applications of voice, text and email, which we all know and have lived with for several years now. These applications give us what has become an essential connection to our communities of interest and need. These are the new basics of life for people that live in the civilized world. Beyond these there are new applications being developed for mobile network devices, and this dimension is largely being fueled by devices such as the Apple iPhone (News - Alert).

Apple’s iPhone really captures the essence of the new mobile networked future, and their success in the mobile (device) phone business is the evidence of that. They came from the computer world, went in to the music device world with the iPod (the greatest personal music innovation since the Sony Walkman) and have now blown away all other mobile device manufacturers with the iPhone. This evolution is a parallel example of the same shift from circuit to packet, TDM to IP and Ethernet, but it is actually much more than that. The iPhone allows anyone to create an application and sell it directly through an existing delivery mechanism and into a massive marketplace with consumers ready to buy. Most of the marketing is viral and all of the financial settlement is built-in. Incredible! Look at how far we have come – and we are only at just the beginning!

The investor camp is the luckiest of all. A chain reaction of investment opportunities has been started, and the capital requirements and returns are untold at the moment. One thing is for certain, the path to mobile broadband adoption is clear. Just look at the other countries that are ahead of the U.S., such as South Korea, Japan and Sweden. Look at the network infrastructure they currently have in place to support their networked lifestyle and economies -- from fiber that supports the Ethernet networks that supports the IP networks, to the wireless towers themselves, all the way to the device manufactures and everything in between. All of that is necessary to be developed and delivered in the U.S., and it all requires investment. The return on that investment will be a multiple of the return enjoyed by the investors in those other markets given the fact that the U.S. is so much larger than all of them – combined. 2010 is shaping up to be an incredible year and the start of an amazing decade of transformation for the entire world. IT

Hunter Newby (News - Alert) is CEO of Allied Fiber (www.alliedfiber.com).

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