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But in today's wireless environment, there are more threats on the horizon than ever before.

Walking A Mile In A CEO's Shoes

Monday, June 11, 2007

I was thinking about our industry today. To be more specific, I was thinking about it from the vantage point of a CEO of one of the larger wireless operators. There has to be a lot on a CEO's mind in this industry today. If I put myself in the place of one of these CEOs for a moment, there are the usual things to think about: gaining new subscribers, reducing churn, increasing data services to new and existing subscribers and keeping an eye on the competitors, all while keeping Wall Street and/or the Board of Directors happy.


Then there are the issues of pricing for both voice and data services. How do we balance price and profitability with all of the downward pressures? When will saturation be reached in the United States? How will the convergence of wireless, wired and video play out, and how do we make sure we stay in the game? How do we prevent our wireless network from becoming simply a wireless pipe? What other sources of revenue can we generate and with what partners?


But in today's wireless environment, there are more threats on the horizon than ever before. Could muni Wi-Fi be a threat? What about WiMAX? Are Sprint, Clearwire and Intel correct that all they need to do is offer wireless access to the Internet? What about the new entrants that now have licenses on the AWS spectrum? What are they planning to do? How will the 700-MHz auctions turn out? Will the spectrum really be up for grabs and will my company have to pony up $billions to get some of it, or will Google, Microsoft or even Intel step in and try to change the face of the wireless industry?


How much influence will the Internet community really have with this new congress and, therefore, the FCC? How do we respond to the entire first responder issue, the hue and cry being sent up about interoperability and the ideas being circulated for more private/public sector cooperation? While we are still in the process of building out our 3G data capabilities with (EV-DO/UMTS), do we ignore the next generation of wireless technologies (UMB/LTE) or do we have to start now to decide when they will be viable to deploy? When will it be cheaper for us to deliver voice using VoIP instead of today's voice technologies? When we have an all-IP network for both voice and data, how do we differentiate our network and services from the rest of the pack?


There are probably at least a dozen things I have missed in this list, but you get the idea. There are, of course, many people underneath this CEO whose job it is to manage these issues and responsibilities and make recommendations, but at the end of the day, it is the CEO who is ultimately responsible for the performance of the company. Most CEOs I talk with know they have solid teams in place to handle these issues and more, but they also know that at this point in time there are more decisions than ever that need to be made, and made correctly and faster than ever before.


During the past decades, we have seen companies that provided both wired and wireless services split themselves into two different companies or groups at the urging of Wall Street and/or the courts, and then a few years later put themselves back together again because convergence of our communications services is the next big thing. We have also seen dramatic changes in the number of wired and wireless service providers, first expanding, then shrinking and now, perhaps, expanding once again.


But perhaps the biggest change of all is what I call the Internet mentality. This is the idea that we have the "right" to have access to anything anywhere for almost nothing. Many of the people who share this belief are sane, hardworking, well-educated people who seem to believe we have the right to use communications facilities for next to nothing and to obtain information for free or nearly free. They also seem to believe that a network―any network―that has been built at great expense by a company should be made to be open and made available to anyone who wants to use it to provide services to others.


I am told by some of my Internet mentality friends that I am not being realistic about a company's rights to be able to make money on their investment. Of course, they don't put it like that, they usually say that the companies that have spent the $billions of dollars to build these networks are charging too much and that they need to open the networks up to competition in order to lower the cost of access. If I were a CEO of a large wireless company, this attitude would probably keep me up at night. If I were in charge of a company that spends $billions of dollars every year and is already providing wireless services at some of the cheapest prices in the world, I would, indeed, be worried about those who believe my company is making too much money and should open the floodgates to everyone who wanted to ride on my network.


I believe that when AT&T was a monopoly it did not have to build the world's most reliable wired network with back-up, redundancy and the ability to manage capacity, but it did. I believe that network companies that invest $billions of dollars are entitled to make a return on that investment, and I believe that if this model does not remain intact, we may no longer have networks that are as reliable as the ones we use today.


In the United States, we have some of the cheapest telecommunications services in the world, and some of the best. If we are to continue to be leaders in technology and in providing reliable services, we need to ensure that those who are willing to spend the money are able to reap the rewards. While I am on this subject, the second part of this equation is that networks have to be managed. I can hear it already: The Internet is not a managed network! No, it is not, and it is not a mission-critical network either. You cannot have a mission-critical network unless there is someone, some company, to manage it and ensure that it is built as a mission-critical network and stays that way.


A CEO for a wireless (or wired) network company has the responsibility to make a return on the investment for his/her company's board and stockholders and at the same time provide reliable services for customers. I, for one, think the system is working just fine the way it is. It is not broken and it does not need to be fixed!

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