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CTIA Update – Confirmation of an industry re-defining itself

By John April 10, 2007 10:13 am

Location: Ottawa

First, I want to thank George Riedel for his guest blog entry on the Nortel strategy. The response has been very good and I am sure I’ll be asking George to weigh in on other topics in the future. Second, I wanted to take a few moments to discuss some observations of the recent CTIA show and my conclusions from it.

CTIA is one of the biggest trade shows for the wireless industry and, as such, should give a clear pulse of the market. Much like 3GSM, it is a collection of vendors, operators and others who have a vested interest in the state of the industry and, in many cases, have strong opinions to promote.

My involvement was in one-on-one meetings with a wide range of customers, internal events for Nortel customers and as a participant on the industry CTO panel at the main show. While overall a busy week in Orlando, the one conclusion that I walked away with was that my premise that this is an industry in transition was made even more clear than it was going into the show.

The reason I say this is that the overall tone of the show and industry was one in which we exhibited the following behaviors:

  1. We are excited about new technologies like LTE, UMB and WiMAX because they open up new capacity and connectivity options and improve the state of access in the wireless world.
  2. We are conveying that WiMAX or LTE or UMB - for a host of technical and market reasons - are bad technologies that cannot possibly be successful versus the existing or competing (UMTS, GSM, CDMA, HSDPA…) schools of thought.
  3. We are defining our industry in the same terms (users, applications, cost, revenue…) that defined the previous 2G and 3G eras.
  4. We are defining our industry with new terms and business models that calculate users as devices/connections (hyper-connectivity), revenue as variable, applications as open (Google, Yahoo…) and market size in ranges that vary by orders of magnitude.
  5. We are concerned about how the industry is consolidating, with Alcatel-Lucent and Siemens-Nokia front and center.
  6. We are concerned that there is too little alignment with the total industry as defined as all of IT, including the likes of Microsoft, IBM, Sun, SAP, Oracle…
  7. We look at applications and services as key elements of the future business models of wireless.
  8. We have a suspicious or, at minimum, conflicted relationship between the core of the infrastructure vendor community and application companies (i.e., Net Neutrality).

What can one derive from the above set of contrasting views that permeate the industry?

Well, the most important conclusion is not that any single position is correct, but rather that we are transitioning as an industry. We are torn between the existing business models, customers and technologies and the inevitable new ones that are emerging. This is a classic example of transformation dilemma. There are many good books that talk about the issues in this kind of transition. My favorite is “The Innovator's Dilemma” by Clayton M. Christensen. It is a good read to see how, throughout the history of the industry, good companies have failed to grasp the inevitable change that technology brings.

It is clear, as evidenced at CTIA, that a new wave of technology is emerging around new Radio Access Networks, such as 802.16e Mobile Wimax, LTE and UMB. It is also clear that with new access technology, a new set of core networks will be built to deliver cost effective and simplified backhaul. Most importantly, it is clear that with new capacity and cost points, a new set of end points and applications will inevitably emerge, creating new ecosystems and solutions that disrupt the status quo.

It is not a question of if this change will happen, but rather a question of what the industry will look like when it is in full force. Some will try to delay the change, and others will miss it completely and fail. At Nortel, we’re betting on this change and are shifting the company to be a leader in the transition.

Here are a few links to clippings and releases that show the diversity of effort at CTIA and in the industry today:

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