[isp-wireless] WiFi vs Cell Phones

[Ken DiPietro <ken@...>]

As quoted from the article,

"STRATEGY ANALYTICS: $12 Billion Risk of Lost Profits Facing North 
American Wireless

WiFi Expansion Threatens Verizon, Cingular & Sprint/Nextel

Boston, MA - January 26, 2005-- Increased deployment and aggressive 
pricing of WiFi capabilities from operators such as SBC, AT&T, and MCI, 
as well as the increased provisioning of free WiFi hotspots will place 
as much as $12 Billion of projected profits at US wireless operators at 
risk, according to new analysis from Strategy Analytics. The key impacts 
on US wireless operators will include a reduction in projected wireless 
data ARPU (average revenue per user) from $3.40 to $3.20 in 2005, and 
from $10 projected in 2008 to $7.20; an effective reduction in the 
average projected cost in the US to transmit one megabyte of data from 
nearly $12 previously projected for 2005 to about $6, and for 2008, a 
reduction from about $4 down to $1.50; a reduction in US wireless 
industry EBITDA (Earnings before Interest, Tax, Depreciation, and 
Amortization) as a percent of revenue from 30.5 percent in 2005 to 30 
percent and in 2008, from about 30.5 percent down to 26.5 percent.

Wireless data activity and revenues will grow rapidly in the US. The 
growing availability of lower cost or free WiFi services will definitely 
cut into the projected revenues and profitability for cellular-based 
services."

The link to the original article is here:
http://www.strategyanalytics.com/press/PR00146.htm

You know, just thinking about these numbers kind of makes me wonder if 
the Cell Phone industry can take a hit of $12 Billion in the next few 
years. It's not like they are wildly profitable now.

The other question that needs to be asked, who is going to pick up this 
business? WISP? I am cautious going forward with that statement knowing 
full well most WISPs don't have a "Good Enough" infrastructure to 
support this level of service.

Perhaps, based on these projected numbers, that will change.

Respectfully,

Ken DiPietro
New-ISP
NextGenCommunications

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