Austin, Texas: A wireless sector Mecca?

As the throng of visitors descended upon the Texas state capital over last few days to attend the Austin Mobility Roundtable and the SXSW Wireless Future events, enquiring minds wanted to know--what is it about this town that makes it such a magnet for wireless sector activity?

Previously known primarily as a college town (it's home to the huge University of Texas main campus)--and in the more recent past as a development center for semiconductor companies and an eclectic mix of software and Internet-related firms--Austin has now quietly become a haven for creative wireless and mobility-oriented ventures.

Like many communities in North America that were negatively impacted by the rise and fall of the dot-com era, Austin's political and commercial leadership decided to search for a new economic engine to take the local technology sector to the next level of existence. Wireless and mobility was a somewhat natural choice, because the foundational roots are already in place. As the rest of the world discovers the joys of untethered communications, several Austin-based wireless pioneers are busy working on pushing the outer limits of what's currently possible.

Already known as the "Live Music Capital of the World," Austin was recently recognized as the "Free Wi-Fi Hot Spot Capital of America." What's the common thread between these two very different focal points? Well, when you look closely at the core resilience that has kept the people of this town focused on maintaining and evolving their distinctive lifestyle-related attributes, two words always seem to come to the fore--creativity and innovation. When Richard Florida wrote his insightful book "The Rise of the Creative Class," his ranking of Austin as America's second most creative city (San Francisco was ranked #1) surprised many folks, but it didn't surprise Austinites who could directly relate to the findings uncovered in Florida's thought-provoking research. In fact, this is no overnight success story. To the contrary, constituent engagement in Austin's "wireless future" vision has been building for quite some time.

Austin collectively offers a unique combination of wireless technical expertise, creative content producers and broad community partnerships. As an example, the Austin Wireless Alliance is an organization that connects commercial businesses, the Chamber of Commerce, and the University of Texas' wireless research group. The alliance holds bimonthly meetings with its 35 member companies, attracting upward of 100 people for each meeting.

The nationally acclaimed Austin Wireless City Project, an organization that provides free Wi-Fi network installation and maintenance for local business venues across the Texas capital, is a model of American grass-roots entrepreneurial ingenuity at its very best. Moreover, the Austin wireless and mobility commercial landscape includes an interesting cross-section of key industry players. As an example, the Wi-Fi Alliance is headquartered here. Established companies like SBC and Cingular Wireless have engineering labs in Austin. IBM's Pervasive Computing Advanced Technology lab has been a longtime resident. Intel's Cellular and Handheld Group has an established team here. Axalto USA, a leader in smart card and GSM SIM technology, is located in a suburb. Homegrown local start-ups like Wayport (a leading provider of high-speed Internet access for travelers) and Alereon (a semiconductor company developing Ultra Wideband chipsets) have also created noteworthy market momentum.

In total, there are already more than 90 local companies that are active in wireless technologies, and approximately half are focused exclusively on the wireless sector. So, it's really fitting that two of this year's key wireless and mobility leadership gatherings occurred in Austin. Here are just a couple of noteworthy highlights from these forward-looking conference events.

The Mobility Roundtable predominantly draws an academic crowd, which reviews previously performed primary market research. Key points shared by presenters and panelists include findings from an Asian market study suggesting that wireless subscribers who use more voice service minutes also use more data (SMS). Another study indicates that Swedish and American college students have very common wireless usage patterns. The takeaway: U.S. carriers can learn much from studying their advanced counterparts' progress in both European and Asian markets. Case in point: In contrast to European and Asian counterparts, U.S. carriers are still focusing on bites, bytes and data speeds--not data applications.

The Wireless Future sessions at South by Southwest (SXSW) were a subset of the SXSW Interactive event, which draws a predominantly techie developer crowd. Key points shared by presenters and panelists include a Verizon Wireless executive who said his company must "own the customer" in response to audience questions about why U.S. carriers ignore smaller independent software and other content developers. Questions about when U.S. carriers will learn from DoCoMo's iMOD model, under which the Japanese carrier supports hundreds of small content providers, were greeted with essentially the same response from Verizon. Needless to say, this fueled a heated debate.

Dialogue about developer frustration continued even after this session was over. In summary, conservative wireless network operator leadership apparently has much in common with its counterparts at traditional U.S. content providers like the major music publishers and the big movie studios. They cling dearly to their legacy business models (with all the inherent waste and inefficiencies) while concurrently fearing and resisting any new disruptive technology.

As the focus now moves to next week’s CTIA 2004 show in Atlanta, this is a good time to reflect on what wireless service providers can do to keep pace with rapid market changes and overall customer expectations. One overriding theme from the debates within these two events in Austin is that wireless carriers should try harder to emulate the openness of the Internet phenomenon--and start by opening their minds, their networks and their business models to embrace and welcome the smaller, more agile content players within this growing sector.

For those communication service providers who still have protectionist notions, may I remind you of the trials and tribulations of the previously deregulated airline industry--an industry that's clearly ahead of telecom's current evolutionary cycle? Many insiders thought it inconceivable that giant incumbents would lose control of that industry. Regardless, one-time icons Pan American Airways and Trans World Airlines are a distant memory. The remaining major airlines are all in a state of financial ruin (victims of their own obsolete pricing, distribution and delivery methodology), while disruptive upstarts like Southwest and JetBlue have flourished.

Therefore, my advice to carrier executives is simple. Next time you think about how you want to control the business ecosystem and "own the customer," resist the urge to go down that myopic path. Think like you're really open to new ideas--and start acting like a true partner. There's still time for you to make amends for a century of one-sided monolithic perspectives. The upcoming CTIA event is your golden opportunity to present a new, "enlightened" mindset to the world, so don't blow it. FYI, everyone's watching you closely, and wondering if you'll finally wise up.

David H. Deans is the Senior Partner of Deans & Associates, based in Austin, Texas.

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