The Competitive Carriers Association held their annual convention earlier this week in Las Vegas. A few takeaways:
1) Concern over LTE upgrade cycle. Small to mid-sized carriers appear anxious about the costs and benefits of LTE. They seem to realize they will need to do it eventually in order to remain competitive. But they are not certain there will be an appropriate return on the investment. Verizon’s LTE in Rural America, and a variant offered by Alcatel Lucent, are designed to provide shared infrastructure for smaller carriers to make this transition. But it comes at the price of reduced flexibility.
2) VoLTE, VOIP and other technologies are eliminating the divide between voice and data traffic. It threatens to convert their traditional high price per bit voice revenue into low price per bit data revenue. Carriers were flocking to presentations by various OTT service providers and to their booths in the exhibition hall.
It’s widely known that the cable industry’s Internet pipe is threatening to overtake and replace its core video services business. As a result it is scrambling to offer a host of over the top (OTT) services to supplement it dwindling video revenue. Now the same appear to be happening to the wireless carriers.
3) Shared infrastructure, of all types, generated significant interest. Lots of companies offering shared network management software, subscriber management software, customer applications and even shared LTE networks. The shared infrastructure was squarely aimed at smaller carriers who did not have the scale to develop these products in-house but wanted to be able to be competitive with the larger carriers.
4) Tower operators starting to embrace small cells. Crown Castle (Ticker: CCI) had a detailed set of slides in their booth showing the efforts to build small cell networks. This dovetails with our earlier analysis regarding how the increased use of small cells was limiting the tower operators benefit from the growth in the industry. They are responding and joining the effort. It remains to be seen how they will compete with smaller systems integration firms.
5) There was the ever present discussion of the broadcast incentive auction and what it might mean for smaller carriers – would they get additional needed spectrum or would it go to larger carriers leaving them increasingly marginalized?