InCode releases 11 wireless predictions for 2005

After getting 8 of 11 right this year, analyst group InCode has compiled a new batch of wireless predictions for 2005, including the consolidation of two more major wireless carriers and the arrival of spam on the network.

There will be at least one major consolidation between tier one carriers in 2005, said Jorge Fuenzalida, east region director for InCode. While Fuenzalida said he isn’t predicting which carriers will consolidate, he said any mergers would most likely be along the lines of technology, further widening the gap between CDMA and GSM in the U.S. He added that the industry should pay very close attention to Vodafone and its relationship with Verizon Wireless.

"Vodafone and Verizon have obviously done well financially, but Vodafone is also looking to extend its brand," Fuenzalida said.

InCode also believes that spam will become a major concern among carriers and consumers in 2005. So far the industry has been aggressive at fighting spam, but spammers have also paid little attention to the wireless market so far. InCode expects several high profile spamming incidents to occur next year that will focus far more attention on the nuisance.

Among its predictions, InCode believes that the role of wireless in public safety will increase in 2005, especially in the wake of this year’s 9-11 Commission report, which found infrastructure in the U.S. lacking when it comes to national security and public safety. InCode expects a national citizen’s alert system over cellular to appear, phase II E911 compliance to shape up and even the use of RFID tags in U.S. ports to aid customs officials.

On the applications side, InCode believes that carriers will give up their quest for the killer data app and focus on the one application that has carried them this far, voice. Carriers will launch tiered voice services and enhanced calling features in an effort to distinguish themselves. Much of the driver for those different categories of voice service will be from enterprises, which will demand higher service quality, as they grow more and more dependent on wireless for everyday business. InCode also expects integration of multiple wireless technologies in devices and laptops to begin in 2005, as well as a new push toward in-building cellular coverage.

InCode also predicts that 2005 will be the big year of the MVNO for established U.S. consumer brands. Not just cable companies will latch onto the trend. InCode expects companies with strong multimedia brands to jump onto the trend, much like Virgin got into the wireless business several years ago. The new year will also find carriers defending their control over wireless content as vendors and outside content providers will try to make their way up the wireless pipe independently of carrier partnerships.

Finally, InCode thinks that despite the success of adult content in Europe and Asia, the potentially lucrative market won’t make any headway in the U.S. With no parental controls built into the network and a more conservative social and cultural climate in the U.S., each carrier will be reluctant to be the first to launch an adult content service, for risk of repercussions from its consumer base.

"At this point they’re scared to be viewed as the purveyors of adult content," Fuenzalida said. "There is so little differentiation between the carriers right now, not one of them wants to run the risk of being singled out for controversy."

Last year InCode correctly predicted that wireless carriers would launch a broadband war that would force carriers to move more aggressively to 3G. Verizon Wireless’s launch of EV-DO networks, led Sprint to re-evaluate its migration path to EV-DV and commit to EV-DO and was followed by AT&T Wireless’s launch of UMTS networks. InCode also called the integration of wireless into the wireline bundle, as SBC, Verizon, BellSouth started aggressively selling Verizon Wireless and Cingular service to their local customers and Qwest and AT&T both launched MVNOs. Though it was right on target with those two projections and saw six more of its predictions come to at least partial fruition, it was a year early in projecting the coming of telemarketing to wireless networks and the creation of tiered classes of voice and data service.