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Jonathan Spalter

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When American Consumers Decide, Mobile Internet Wins

Posted: 07/14/11 05:01 PM ET

Official Washington already is slugging-it out in the inside-baseball of the next presidential election. But tech policy circles are pouring over the details of another closely watched horserace--the Federal Communications Commission's annual analysis of the competitive nature of the U.S. wireless market. With every manner of mobile device now bursting from our pockets and the airwaves awash in ads from a range of companies competing for our wireless dollars, the answer is fairly obvious. Nevertheless, the Commission this year provided a thoughtful and nuanced exploration of the many yardsticks that combine to deliver a thriving, innovative and competitive mobile marketplace.

The report comes not a moment too soon as both Congress and the White House take up the urgent need to make more spectrum available to support U.S. consumers' fast-expanding appetite for wireless connectivity. With spectrum legislation circulating in both the House and Senate, tomorrow in the latest in a series of hearings, the House Energy and Commerce Committee, will examine long-term spectrum solutions for our nation.

As it does so, the 300-plus page FCC report makes a powerful case for continuing the rapid progress of the mobile Internet--and the perils for policymakers who don't keep pace with their connected constituents.

Among the highlights:

  • 9 out of 10 Americans Have Mobile Internet Choice. 92% of Americans have a choice of wireless broadband providers and 82% have at least three options for mobile Internet, according to the FCC report. And, we're choosing to connect. A majority of U.S. mobile device sales are now smartphones, and a recent analysis forecasts that our country will be the first where a majority of citizens own smartphones. We're at 38% today.

  • Device Options Abound. Another key metric is the number of devices consumers have to choose from here in the U.S. In four years, the number of wireless handset makers in the U.S. market rose from 8 to 21, according to the FCC. In June 2010, just 10 device makers offered 144 smartphones, nearly triple the number available just one year before. Next up? All the tablets we're now adding into the mix. Already they're in 13% of American households.
  • Rivalries Spark Vigorous CAPEX. Over the past five years, investment in U.S. wireless networks has held steady in the $20-$25 billion range annually--despite a challenging economy. This is a strong indicator that competitors are feeling the need for ever-stronger networks to keep and attract customers. Last December, according to the FCC report, MetroPCS became the first U.S. provider to launch an LTE network, followed by Verizon Wireless. AT&T has plans to launch this year. If the FCC is successful in making more spectrum available, this investment is likely to continue at a vigorous pace to the benefit of consumers and our recovering economy.
  • A Crowded Field. Today, there are nearly 100 national, regional and niche wireless providers competing for U.S. customers, the report finds. And more choices are on the way. Last July, Harbinger Capital Partners announced plans to build an LTE network under the name LightSquared that could provide coverage to at least 100 million Americans by the end of 2012. By 2015, LightSquared hopes to provide coverage to at least 260 million, just behind Verizon, AT&T and Sprint-Nextel. Even with the AT&T-T-Mobile merger, Americans will have 5 national competing wireless providers to choose from, not to mention regional carriers throughout the country.
  • Apps Competition Powers Growth. According to the FCC's report, U.S. consumers can now access nearly 1 million mobile apps from 26 competing app stores. In fact, Americans now spend more time using apps than surfing the Internet. A few years ago, the apps market didn't exist. By 2015, the "apps economy" is projected to generate $38 billion in sales, with real jobs and economic opportunities flowing primarily to the U.S.
  • Competition, choice, innovation and growth all rely on the same thing--more spectrum and more infrastructure. As Washington seeks to close the budget gap, the public revenues that would be generated by making more spectrum available to support mobile Internet expansion are a win-win for consumers and our economy, and for America's competitive position in the world. While consumers vote in the marketplace today--soon they will vote for the policymakers who have a big say in what the next chapter of mobile innovation will look like for our nation. Rest assured that connected consumers--90% of whom reportedly sleep with their mobile device--will vote early and vote often.

    Jonathan Spalter, chairman of Mobile Future, has been founding CEO of leading technology, media, and research companies, including Public Insight, Snocap, and Atmedica Worldwide. He served as an advisor to and spokesperson for Vice President Al Gore during the Clinton administration.

    Mobile Future is a 501(c)(4) coalition comprised of and supported by technology businesses, non-profit organizations and individuals dedicated to advocating for an environment in which innovations in wireless technology and services are enabled and encouraged. For a full list of members and sponsors and to learn more about the coalition, go to www.mobilefuture.org.

     

    Follow Jonathan Spalter on Twitter: www.twitter.com/mobilefuture