Carrier Execs Talk Up Need For Spectrum, Improved Reputation

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The leaders of the nation’s four largest wireless carriers took to the stage here at CTIA Wireless 2012 to promote agendas ranging from an urgent need for more wireless spectrum to a need to rehabilitate the industry’s reputation among consumers.

During their shared keynote session, some of the executives also pointed to a need for carriers to offer creative services to consumers, not just fast network speeds.

Innovation and industry growth are “at risk due to the spectrum shortage,” said Verizon Wireless president/CEO Dan Mead during the keynote session. The Federal Communications Commission has forecast that wireless data demand would be 25 to 50 times greater in 2015 compared with 2010, and that if no more spectrum is made available to carriers in the near term, data demand would likely exceed capacity in 2014, Mead said.

Because it would be “some years” before new spectrum would be ready for carriers to use, Verizon needs additional spectrum in some markets by 2013 and in other markets by 2015, Mead said. For that reason, Verizon is seeking to buy unused AWS-band spectrum from cable companies and is confident the government will approve the deal in midsummer, he said.

For his part, T-Mobile USA president/ CEO Philipp Humm called the need for new spectrum “urgent” because it takes a while for the government to auction off spectrum and for carriers to put it to use. In 2009, he noted, T-Mobile smartphone customers used an average of 25MB of data per month, and in 2012 that jumped to 760MB per month. The main culprit is video, Humm said. Video accounts for about half of data usage on 4G networks, and “mainstream” consumers are just starting to become aware of video over cellular, he said.

While waiting for new spectrum, carriers are moving to make their networks more efficient, Humm said. In the future, he forecast the ability to dynamically adjust network capacity as needed and implement small-cell technology that, for now, is still costly and complex.

Although more spectrum is needed, Sprint Nextel CEO Dan Hesse said the industry faces another challenge: rehabilitating its reputation. The industry is suffering from “a trust and reputation crisis” as evidenced by a survey that found the industry’s reputation to be the lowest of any major industry, including the cable and oil industries, Hesse said. He cited a survey by the Reputation Institute, a reputation management consultancy.

Safety, security and privacy issues and how the industry addresses them affect the industry’s reputation and its future fortunes, he said. “If they trust us, they will buy from us.”

For that reason, Sprint is taking multiple initiatives, including working with Norton and McAfee to address growing consumer concerns about hacking and viruses, Hesse said. The carrier will also provide consumers with privacy choices, giving users control over such things as sharing information for mobile advertising. Sprint will use an independent auditing company to verify the company is adhering to consumers’ privacy settings, he noted.

Hesse also announced new Sprint Guardian services, due in the summer on multiple Android handsets. Users will be able to download a suite of subscription- based apps that protect multiple wireless devices from theft, loss and malware and protect family members. To protect families, the suite include the carrier’s Family Locator service and ability to limit a child’s texting while driving or at school.

Consumers will be more focused on privacy, safety and security than they will be on network speed, Hesse claimed.

Despite the industry’s bad reputation, Hesse said he doesn’t believe the rap is deserved and suggested the industry has to market itself better. “I am surprised … but the data is there,” he said.

Hesse didn’t explicitly link the industry’s reputation problem to carriers that have taken “creative license with the digit four” to promote their services as 4G, but he did say that consumers are “confused by what 4G LTE means.”

For his part, Ralph de la Vega president/ CEO of AT&T Mobility dedicated most of his keynote comments to pointing out that “consumers want more than just speed” from carriers. Carriers must develop services that make consumers’ lives “fuller and richer,” he said One such service is AT&T’s planned Digital Life home security, remote monitoring and home-automation system, he said.

Likewise, T-Mobile’s Humm said he sees carriers shifting from being wireless access providers to offering valueadded services as voice and text revenues decline.

In comments made under questioning from CNBC “Mad Money” host Jim Kramer, the executives expressed their opinions on whether certain technology companies were their friends or foes. AT&T’s de la Vega called Apple a friend despite high subsidy costs because the phone helped increase the carrier’s margins and lower its churn rate. Hesse called Skype a friend even though it offers free voice and messaging services because consumers must pay for Sprint data service to use Skype. “A bit is a bit,” he said.


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