LIVING IN LIMBO

Wireless telecom is a trade in transition. Companies are shedding business divisions or laying off employees. Some wireless players have fallen off the market's radar screen, and others hope to be acquired. While some companies have remained unscathed, they still walk a fine line between having stable or shaky business plans, especially in the eyes of the stock market. The wireless industry's state of flux is in part a result of an unsettling economy, but the now mature industry likely will continue its struggle for balance until more consolidation ensues. We know carriers have great plans for their next-generation networks, and they are not opposed to advancing themselves by way of mergers or acquisitions. The bottom line today is their economies of scale are out of whack and their debt is plentiful, making it difficult for consolidation to happen on a large scale. There are other roadblocks, such as the NextWave debacle. Thanks to the Supreme Court, NextWave's spectrum and carriers' money will be holed up for another three years. Until this is resolved, carriers may choose to ground any acquisition plans. Others may decide to seek opportunities regardless, especially because the spectrum cap will be raised later this year. Carriers may not be clear on spectrum or debt and how either will affect their future plans. Ironically, this uncertainty in wireless will give carriers and vendors the time to explore alternative technologies that just might solve their spectrum issues. Time is on their side, even if clarity continues to elude them.