ACG Research

ACG Research
We focus on the Why before the What

Monday, December 19, 2011

Value-Add or Value-Absent, What’s Your Network?

As we wind down the year, and get ready to kick off 2102, now is a good time to set up some thoughts for 2012. My predictions will be published by Fierce Telecom in January, but let me discuss one theme that will be the basis of my research in 2012: For the mobile operators, the network is still one of the best differentiators.

Verizon has long positioned its network as the “largest, most reliable network” and with its launch of LTE has amended that statement to be the “fastest, most reliable 4G network” (despite outages in April and December in the LTE network). Both messages underpin my key point: if you don’t have network coverage where you are, it doesn’t matter what your device, apps or services are. But the value-add aspect doesn’t stop simply with ample coverage and performance. Each operator has its own spin on its value proposition to consumers.

Sprint leverages its unique unlimited smartphone data plans, new iPhone franchise, as well as its industry leading customer purchasing experience satisfaction scores to offset an aging WiMAX 4G network with limited coverage area.

T-Mobile it taking the largest 4G network and pairing it with low-cost plans and a killer range of devices. T-Mobile is looking to simplify the complexity of the smartphones with its myTouch phones even as it pushes the top end with the Samsung Galaxy S II and its huge screen, fast processor and HSPA+42 network.

AT&T comes in a little late to the LTE party, but early indications are that it is very quickly taking over the “fastest 4G” mantel even at it touts the speed advantage of its 3G network for its iPhone users. Speed, coverage and the next-generation network is right around the corner, not to mention a triple-play option for its customers.

Not surprisingly, not everyone agrees with the idea that networks need to get smarter. Satellite-LTE carrier LightSquared will be "the dumbest broadband wireless pipe," CEO Sanjiv Ahuja told a conference, as reported in a Nov 2011 PC World article. "I want no intelligence in our network. None. Zero. We are an absolute utility.” (

As we focus on the connected lifestyle or the gigabit lifestyle the role of the operator and the network infrastructure remains a critical element. Mobile operators are not all the same. Differences resulting from spectrum positions, network design, device portfolio, pricing plans, backhaul, network architecture and even the organizational structure of the operator all come to play in affecting the user’s experience. The situation is dynamic, but when it comes down to making a purchase decision, most buyers are looking at the near term, not the end of their two-year contracts.

Chris Nicoll

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