The Next Evolution of the Wireless Industry

by Jeff Wiener on May 8, 2015

As it does every decade or so, the wireless industry is undergoing significant systemic change, and more so in America than in Canada I would guess, the result will likely be a radical redefinition of both what a carrier is and what it does.

Consider that less than 10 years ago wireless networks were still struggling to adjust to data traffic, the wireless handset market was dominated by names like Blackberry and Nokia, and carriers were desperate to monetize their involvement in this growing market. Today networks are exponentially more powerful, the once dominant brands of Blackberry and Nokia are barely relevant, the mobile market is now dominated by the likes of Google and Apple, and carriers, reduced to nothing more than a “dumb pipe” for data traffic, still have to find new ways of making money through the delivery of the mobile Internet.

With such a changing landscape one has to wonder what future growth will look like for wireless and wire-line telecommunication firms. Gone are the days of the traditional phone company, so too are the revenues of the traditional phone company, replaced by blurring of the lines between technology and telecom, meaning telcos will have to become a lot more like tech firms if they ever hope to survive.

As E-Commerce Times writer Jeff Kagan notes, there seems to be a dramatic split of wireless services forming on the horizon, a sign that the wireless industry is about to undergo yet another radical paradigm shift. The split will see the larger wireless competitors—those who are more established telecommunications providers and who have significant wire line resources as well—AT&T and Verizon making a significant transition out of the traditional telecommunications market into associated industries,  working to establish networks to transform everything from healthcare to how we drive our cars.

Further, on the wire line side of the market these companies are seeing increasing opportunities in associated markets like television and streaming content services, meaning that while currently telcos simply supply the pipes for such content to be delivered, soon they’ll find ways to control the content as well.

That leaves the lesser wireless players, those without the wire-line resources, to fight over what remains of the traditional wireless industry; an industry, it should be noted, that is changing considerably in its own right. If the last year has shown us anything it’s that the days of the post paid contract, the most valuable asset for a wireless carrier, is on the way out, meaning prepaid services will rule the day going forward. I would expect, therefore, the likes of Sprint and T-Mobile to continue their efforts, for although AT&T and Verizon both have similar prepaid services, both see more significant revenues elsewhere.

All that to say, the entire communications industry is changing—change, it should be noted, that will likely be more keenly felt in the US, given the countries wider range of wireless competitors compared to Canada’s entrenched triumvirate—and it’ll be interesting to see, particularly given the influx of tech companies into telecom and vice versa, what this all looks like when the dust settles.

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