WHY WAIT?

Wireless subscriber growth is slipping, handset sales fell for the first time in 2001 and wireless stock valuations are at an all-time low. No wonder the focus of this year's CTIA show is “Wireless Lifestyles” — how wireless can seep into a broader marketplace and affect how people work, play and live.

Things have been relatively simple for wireless carriers in the last few years. Penetration has been so low that up to this point, they only needed to offer competitive pricing to spur adoption. Now that penetration is moving above 40%, they have to work harder. Many carriers responded by offering even lower pricing, which, in the long run, will only erode their profits.

But the potential for more phenomenal growth exists, wireless executives keep insisting. “Everyone believes this is an underpenetrated market with lots of growth opportunities,” Ivan Seidenberg, co-CEO of Verizon Communications, said at a recent Credit Suisse First Boston conference.

The question is: How do carriers keep spurring the adoption of wireless? So far, attempts to target new markets have not produced exceptional results. The move into the credit-challenged prepaid market, for example, essentially has been a misstep — carriers continually forge their way in and then retreat when they find churn and ARPU are falling because such customers are less loyal. And while the enterprise market is slowly beginning to offer buds of hope, major interoperability issues still must be resolved.

Carriers have been so preoccupied with rolling out next-generation systems and crafting their sophisticated data plans that they have missed some of the less expensive options. Only now are operators beginning to roll out short messaging service on a nationwide basis. SMS has been a cash cow for carriers in Europe because it requires little overhead and can be priced at a premium. Once AT&T Wireless initiated nationwide SMS through an interoperability gateway late last year, usage exploded.

CTIA is heavily focusing on topics that usually have been tucked in the background because of the sexy potential of high-speed wireless data. But this year, participants will hear about things like using wireless for remote home control, wireless virtual communities and personalizing services to spur more customer loyalty. Carriers should figure out how to expand services today, not wait for wireless data to pick up the slack.