GLOBALIZING WIRELESS

One billion is a big number. It's almost three times the population of the U.S. It's 15% of all the men, women and children living on Earth. It's also the number of customers the global wireless industry set for its next wave of expansion to finish out the decade. But there's a keen understanding in the industry that the next 1 billion will be a very different billion from the first two. The first 2 billion (which many experts believe we'll hit next year) were farmed from developed countries, countries with large middle classes, countries with average levels of income. The next billion will come from vastly different regions of the world — from countries where the average monthly income is lower than a U.S. carrier's monthly ARPU. India may have a billion people, but only the tiniest fraction of those billion could afford to pay the $40 to $60 per month Western carriers have become accustomed to charging. The same goes for a good deal of China, Southeast Asia, Latin America and the Middle East. To bring in the next 1 billion, the industry will find it has to change its fundamental business. Some of that change has already begun. Vendors are pushing out budget handsets. Base stations are rapidly commoditizing. Softswitching and other IP technologies are pushing down per-minute costs. But are all of those cost savings going to be enough when monthly ARPU comes in at less than $1?