ANALYSIS

AT&T’s Gently Simmering Vodafone Ambitions

AT&T just said it would not bid for Vodafone — at least not within the next six months. Over the years, we have seen the wireless and telecom sectors change dramatically in wave after wave of mergers and acquisitions. As U.S. carriers look for new areas of growth, will they start looking to expand overseas? I think so — and not just AT&T, but Verizon as well, and then others. So what will this mean?

First of all it is important to recognize that change is good. Growth is good. Change creates a playing field that encourages growth. Growth helps companies, investors and workers. It boosts employment, taxes, and pretty much everything else.

Telephone, wireless, cable television and other carriers in the U.S. have not yet moved aggressively into outside markets. That’s largely because until recently, it provided an enormous growth opportunity. However, investors demand ongoing growth, so as it slows inside the U.S. because of a maturing marketplace, companies will look to new areas.

It’s a Small World

Investment in other countries happens all the time. Many companies headquartered outside the U.S. already do business across their borders, including in the U.S.

A few examples:

  • Just look at the recent merger between Sprint and Softbank from Japan. Softbank is not done yet, either. Expect more mergers.
  • Look at Vodafone, a British company that owned almost half of Verizon Wireless until Verizon recently acquired its share, as another example.
  • Or look at T-Mobile USA, which is owned by Deutsche Telekom from Germany, as another.

So countless companies are already doing multinational business. Many U.S. companies already have an international presence, but now more U.S. companies appear to be getting very close to jumping into the global marketplace as well.

There are huge international opportunities they want to take advantage of. If they are competing with foreign companies in the U.S., they of course want to compete with them in a larger playing field.

Right now, they may walk through a global orchard full of ripe, red apples yet they’re able to pick only from certain trees marked “U.S.” Today, American companies are waking up to the huge opportunity to pick from the entire global orchard.

Global expansion may not have made sense yesterday, when these companies were regional, but now it no longer makes sense to wait. Today these companies are national players, and there is no reason they shouldn’t be on the global playing field.

I think rather than just jumping in, American companies that never really did this before want to make sure everyone is on board and supportive in the idea of global expansion. They want everyone — from investors and regulators to workers, customers and everyone else — to buy into this growth plan. That’s why we are hearing more talk about this next big move.

Going Global to Grow

So, who will be successful right out of the gate? In the early years, companies like AT&T and Verizon will start to compete in other countries and make acquisitions. They likely will hit the ball out of the park in some instances and struggle more in others — but it is all one big learning experience, and that’s the important part.

Will AT&T eventually acquire Vodafone? Perhaps. I would think if we can read the leaves correctly, the desire is there — however the timing is not right now. Just because the answer is no today, don’t think AT&T is not interested. I think AT&T is interested in acquisitions and doing business in other countries.

Whether AT&T will make a move on Vodafone after six months is unknown today, but we should keep our eyes open. Other interested companies, both in the U.S. and abroad, could make a similar move.

Vodafone will be one target, but many other companies in other countries will be sought after as well. It won’t just be AT&T — Verizon will on the move as well. Perhaps as they succeed, we’ll see smaller competitors jump into the global marketplace. There are plenty of others: Sprint, T-Mobile, CenturyLink and Windstream to name a few.

Don’t forget the cable television industry, either. Companies like Comcast, Time Warner Cable and Cox may be players as well, as the global marketplace grows and changes over the next several years.

This kind of expansion could make a great deal of sense for U.S. companies. The U.S. market is becoming much more competitive, and that is why carriers like AT&T and Verizon are looking for new ways to grow.

In fact, I see the U.S. industry being split into two sides. One side is the global players, and the other side is domestic-only competitors. That list will change over time.

Many other countries have wireless voice and data; however, the data portion is generally not as fast. While U.S. residents have 4G in most markets, most other countries still use 2G and 3G. This is another source of growth opportunity for U.S. firms.

Growth is on everyone’s mind — especially as growth in the smartphone sector starts to slow. Just look at the iPhone results in Apple’s earnings report earlier this week. If a slowdown is threatening Apple, I think we can assume it will threaten other handset makers as well.

That’s why wireless carriers like AT&T Mobility and Verizon Wireless are helping other industries — like healthcare, automotive, retail and more. That’s the same kind of hunger that will drive global expansion.

The wild growth curve that wireless has seen in recent years may be tapering, but that does not mean growth will slow. I don’t see growth slowing at all — just changing. Growth will come from other areas, like helping other industries go wireless, from international and global expansion, and much more. So keep your eyes open for AT&T’s Vodafone interest to increase over time — and expect other deals as well.

E-Commerce Times columnist Jeff Kagan is a technologyindustry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at [email protected].

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Study Finds Best US Mobile Internet Connectivity in Northeast

Eight of the top 10 states for mobile Internet coverage are in the Northeast, according to an analysis released by a consumer product and services comparison website.

The best mobile Internet coverage, though, isn’t in a state at all but in the District of Columbia, WhistleOut revealed in its analysis.

Placing behind D.C. were Delaware, New Jersey, Rhode Island, New York, Pennsylvania, Massachusetts, Ohio, Maryland and North Dakota.

WhistleOut also identified the worst states for mobile Internet connectivity. That dubious distinction goes to Alaska, followed by Wyoming, Nebraska, Mississippi, Maine and Vermont.

In ranking the states, 75 percent of the score was based on median mobile download speeds and 25 percent by 5G coverage.

Economics of Connectivity

Regional variations in service are related to the economics of connectivity, explained Anshel Sag, a senior analyst with Moor Insights & Strategy. A single cell tower in New York City can serve many more users than a similar tower built in a rural area.

What’s more, he told TechNewsWorld, “In rural areas, there is more need to dig infrastructure to support new cell towers and it takes more time and money to send engineers to update or deploy infrastructure.”


US Mobile Internet connection speed ranked by state

Mobile Internet connections ranked by state [Credit: WhistleOut]

Those economics mean that rural areas won’t be at the head of the line to receive the latest technology.

“Not surprisingly, wireless vendors are focusing their initial 5G efforts on urban and suburban areas that have the greatest concentration of customers and users,” Charles King, the principal analyst at Pund-IT, told TechNewsWorld. “But that means that smaller towns and rural areas can remain underserved for years, and some places effectively never get access to new service.”

Craving Connection

King added that the 3G networks that first enabled effective mobile Internet connectivity nearly 20 years ago massively changed communications and entertainment.

“For the vast majority of people and organizations, mobile connectivity represents the norm today,” he said. “Just consider what happens when mobile networks or services are disrupted.”

Just how important the mobile Internet is became apparent during the ongoing pandemic.

“People are staying connected with their family and friends, who they can’t see because of the pandemic, through the mobile Internet,” observed Sherri Riggs,the social media specialist at WhistleOut. “That connection is something we’re all craving and needing right now.”

“We’ve also seen a huge strain on broadband connections in the United States during the pandemic,” she told TechNewsWorld. “Having a mobile broadband Internet connection to back that up is something lots of people have been relying on the last few months.”

Lifestyle Changer

Sag maintained that mobile connectivity drives a lot of the economy and gives people and companies the mobility and access to information that they need to make better decisions more quickly.

“COVID-19 has exposed how important mobile Internet connectivity has become when cellular operators had to borrow fallow spectrum from players like Dish to prevent significant slowdowns to their networks due to significantly increased usage,” he said.

The mobile Internet will also be important for the lifestyle of the future, noted Atlanta-based technology analyst Jeff Kagan.

“We need to remember three things when we leave the house today — our keys, out wallet and our cell phone,” he told TechNewsWorld.

“Going forward, we’re only going to have to carry our smartphones because it will do everything,” he said. “In order for that to work, we’re going to need the mobile Internet.”

5G’s Contribution

What’s more, the mobile Internet is going to need 5G to keep technological development going forward.

“The significant boost in download speeds offered by 5G will clearly impact mobile entertainment and gaming,” King observed.

“In addition,” he continued, “5G is likely to lead to the development of ever more robust mobile applications, as well as newer or emerging solutions, including IoT and connected homes.”

“In other words,” King added, “next gen mobile solutions absolutely need 5G.”

Sag asserted that 5G connectivity will take the mobile Internet to more than just smartphones and tablets.

“While it does exist in many other places like planes, trains and automobiles, those implementations are bespoke in many scenarios and do not scale in a way that can be implemented everywhere,” he explained.

“5G enables all types of devices and services to access the Internet and become more intelligent and aware of their surroundings to maximize efficiency or improve the efficacy of the service itself,” Sag continued.

The mobile Internet powered by 5G will become faster, more reliable and available in more places, he added.

“New applications and services that were previously unthinkable or impossible with 4G will be possible with 5G,” he said, “and I believe many of those will exist in the factory, on the farm, in the classroom, in the car or even inside of a headset.”

Game of Hype

Riggs pointed out that 5G is more than just about speed. “The biggest advantage 5G offers over the other generations of the mobile Internet is capacity,” she explained.

“A single 5G tower will be able to support many more people than a 4G tower,” she continued. “The sheer capacity 5G offers consumers will greatly improve everyone’s Internet connections.”

She predicted that by the end of 2021 the majority of the country will have access to 5G from every carrier.

“Will it be 5G with gigabit download speeds?” she asked. “No. But the high-band 5G will be available in most major cities across the country.”

Before 5G’s potential to improve the mobile web is realized, though, consumers will have to put up with a lot of sizzle and not much steak.

“To put it kindly, the carriers’ claims have been optimistic and tend to paper over the fact that reliably constant 5G connectivity is fairly rare,” King observed.

Kagan noted that whether it’s 3G, 4G or 5G, the carriers are in a marketing game. “They have to win against their competitors,” he said. “A carrier can’t say that it’s not moving at lightening speeds. If it does, customers will go elsewhere.”

“They offer 5G, but it’s not available everywhere yet,” he continued. “And where they offer 5G, it’s not as fast as it’s going to be. It’s just the game. That’s the way it’s always been played in the wireless game for decades.”

John P. Mello Jr. has been an ECT News Network reportersince 2003. His areas of focus include cybersecurity, IT issues, privacy, e-commerce, social media, artificial intelligence, big data and consumer electronics. He has written and edited for numerous publications, including the Boston Business Journal, theBoston Phoenix, Megapixel.Net and GovernmentSecurity News. Email John.

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