LAS VEGAS - A new business model is emerging that will make the next 25 years of wireless industry growth and innovation every bit as dynamic as the first 25 years - an outcome that can be hugely beneficial to the U.S. economy, according to Ivan Seidenberg, chairman and CEO of Verizon Communications Inc. (NYSE:VZ).
In an address to the CTIA wireless conference here on Wednesday (April 1), Seidenberg said that Verizon, from its position as the nation's largest wireless provider, sees the industry on the verge of a tipping point that will unleash the growth potential of next-generation wireless technology.
"I do not mean to minimize the challenges we face - as an industry or a country - as we try to get our economy going again," Seidenberg said. "But wireless innovation has been a foundation of our country's prosperity for the last 25 years, and I'm confident that this great and vibrant industry will continue to be a leader as we put our economy back on the path to growth."
He said that as the wireless industry harnesses the full innovative power of its technology, it can provide a new set of tools for addressing social issues, such as improving public safety, making businesses more productive, saving energy, improving the quality and reducing the cost of health care, and using wireless broadband to expand the economic opportunities of the digital era more broadly across society.
Seidenberg also warned that this growth and progress could be derailed, and he urged the wireless industry to focus on common issues and rally around creative solutions that will create value for customers and opportunity across the whole industry.
One challenge he cited was the need to come together on compatibility and standards. He said the market is pressing the wireless industry toward openness and compatibility, which would standardize the environment for application development. He called the global standards for LTE (long-term evolution, the next generation of wireless broadband technology) "a big step" in that direction.
A second challenge he cited was the need to maintain an environment conducive to continued investment and competition.
"All of us understand the pressures that policymakers face in an era of big deficits and slow growth," he said. "But we need to be very careful that government does not to try to fix short-term needs at the expense of long-term growth, which happens every time it raises taxes or imposes new regulations."
He noted that taxes on wireless services from 2003-2007 rose four times faster than for other goods and services, and he said that the industry still sees roadblocks that stand in the way of capital investment.
Another common issue Seidenberg cited was the need to come together to use the technological resources of the wireless industry to ensure national security and public safety by creating a 21st-century communications system for first-responders.
He said: "The key is to give public safety agencies the spectrum they need to meet their current and future needs - and, eight years out from 9/11, we cannot afford to wade through another round of auctions and redundant network construction to get there. Fortunately, there's another answer: assigning the D-block spectrum directly to state and local public safety agencies, then letting them work with local network providers to create the robust, interoperable system this country needs."
'Next Wave of Wireless Growth'
If common challenges are addressed, Seidenberg said, he sees the industry on the cusp of "the next wave of wireless growth." He said that Verizon has several initiatives under way to help lead the industry to this next level.
Seidenberg said that the fourth-generation LTE technology that Verizon Wireless is deploying throughout its network "will speed the transition to a truly globalized mobile broadband experience."
"LTE is quickly emerging as the global standard," Seidenberg said. "We're moving fast to get to 4G. Working with Vodafone, we've completed the market trials and standards work. We will begin deployment later this year with a few commercially-ready markets and will roll it out to 25 or 30 markets in 2010, with the expectation of faster rollout thereafter."
This infrastructure is "just one piece of the puzzle," he added. "It's the combination of devices, applications and network capabilities that will really cause this market to take off. No single company will be able to envision, let alone provide, every aspect of this whole 4G ecosystem on its own. That's why we're working with partners, entrepreneurs and inventors from across the industry to create the next-generation products and services."
At the end of 2007, Verizon announced its Open Development program - a process for certifying new wireless devices, software and applications to run on its networks. Seidenberg said the company has so far certified 36 devices through this model, with more in the pipeline. "We expect this process to really rev up as we deploy 4G," he said.
In another initiative designed to fill up the LTE pipeline, Seidenberg said Verizon plans to launch the Verizon Wireless LTE Innovation Center later this year as an incubator for new products in the areas of consumer electronics, telematics and machine-to-machine products for health care, security and utility metering.
Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America's most reliable wireless network, serving more than 80 million customers nationwide. Verizon's Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the nation's most advanced fiber-optic network. A Dow 30 company, Verizon employs a diverse workforce of nearly 224,000 and last year generated consolidated operating revenues of more than $97 billion. For more information, visit www.verizon.com.