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Carrier Execs Talk Up Need For Spectrum, Improved Reputation

New Orleans – 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 a Tuesday afternoon 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.”

Hesse also didn’t speak to a new
TV commercial that Humm introduced on stage to promote T-Mobile’s smartphone
speeds as faster compared with the speed of AT&T’s iPhone. But AT&T
Mobility president/CEO called the commercial an apples-and-oranges comparison
between a network and a phone. He also said such commercials explain “why the
industry has a bad rap.”

For his part, de la Vega 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
value-added 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.

Humm called Amazon a friend and
pointed out that “we cooperate with people we compete with.”

Verizon’s Mead called Google a
friend and suggested Google looks at Verizon in the same way.

AT&T, T-Mobile and Sprint
also said Facebook has been good for their companies.

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