5. Wireless Data Pricing Looks More Like the Airlines’

Having provided customers with unlimited usage plans, operators find it very difficult to increase pricing or start usage-based charging. Much like airlines that couldn’t increase basic rates, wireless operators increasingly turn to charging for incremental features and capabilities beyond basic transport. This is most evident in wireless data services and leads to quality of service pricing. Applications such as VoIP or video streaming that require more guaranteed service are priced higher than just best-effort connectivity. Total cost of service for customers increases, but in many cases not from basic transport fee hikes.

6. M2M Leads Operators into New Acquisition Area

The machine-to-machine (M2M) application space has generated significant interest in 2009. AT&T and Jasper forged a strategic partnership, and Verizon and Qualcomm formed a joint venture called nPhase. Operators previously reticent to dive into M2M now recognize the profit-boosting characteristics of this business: low churn, low cost per gross add, and an increase in non-peak traffic. However, many operators possess limited competencies in the support and management requirements associated with M2M enterprise solutions. At least one operator makes a significant acquisition of a major M2M player to jumpstart its capabilities in this market.

7. A Look at Clouds from Both Sides Now

Beam up my data, Scottie! Operators embrace cloud computing for applications delivery because it places more value on the core network and increases customer “stickiness.” Operators should be on the lookout for gray skies, however. Challenges of response time and coverage can affect utility of usage. Plus, network security and vulnerability issues make customers hesitate. Other players won’t sit still and watch operators occupy this space. Unwilling to assume “dumb terminal” status, device suppliers set up a classic technology battle between capabilities in the cloud versus at the edge. Other cloud companies, such as Amazon and Google, provide these services across wireless and fixed in an “over the top” way, relegating operators to “transport pipe” status. During 2010 expect storm fronts to collide, with heat and lightning generated but no greater clarity on winners.

8. A Device OS Bites the Dust

A recession is still on, and there isn’t enough device revenue to support seven (count ’em) different operating systems: BlackBerry, OS X, Windows Mobile, Web OS, Android, Symbian, and Linux Mobile. While the “Open” oasis attracts much support for Google and Android, expect that one OS drops in the desert. Application storefronts and developer ecosystem traction are critical to device OS adoption by OEMs. Bigger device share attracts additional developers, resulting in more uptake by OEMs. Those OS platforms with extensive developer support, streamlined certification processes, and integration of Web 2.0 features establish early leads. Consolidation rather than continued fragmentation is the probable result since the industry typically drives longer term toward standardization.

9. MVNOs Get New Lease on Life in a Very Different Form

Here comes the MVNO 2.0 business model. In North America, MVNOs have struggled, and the few that found success eventually were acquired by network operators. Competing with operators that ultimately controlled supply just didn’t work. The resurgence of MVNOs is based on a new business model emphasizing delivery of total solutions with wireless as part of the package. An example is the free Amazon Whispernet content service accessed with a Kindle reading device. The risks are lower for Mobile Network Operators (MNOs), since they are not enhancing a competitive brand, and they can penetrate markets previously not easy to access directly.

10. Game Console Video Kills the PC Star, at Least for Internet Video

Internet video primarily has been consumed directly on the PC as streaming bite-sized clips. Only early adopters viewed streamed or stored Internet video on their TV. The amount of Internet video viewed on TV doubles in 2010, and the gaming console serves as the primary gateway, accounting for almost half of usage. Developments supporting the console device, such as content availability, existing revenue model, and higher definition programming, are the enablers. While PCs and other devices—such as Internet-connected TVs and over-the-top, set-top boxes—are expected to emerge after 2010, the gaming console will be the preferred device for now.