Anything But a Speedy Recovery

Being a gambling woman, I'm betting that wireless recovers in 2002. However, don't hold your breath, because there won't be much of a pulse before mid-year. For your consideration, here are my indicators and my inside track.

Indicator #1: NextWave's Final Wave

No matter which side you're on, you undoubtedly want the NextWave epic to end. Like a black sheep family member, NextWave just keeps coming back with its hand out, causing endless hand-wringing by its wireless brethren, particularly Verizon. As long as that spectrum is hung up in Congress and the courts, it will keep carriers from pushing full steam ahead.

Inside Track: NextWave is tabled until Congress resumes Jan. 23, and it's likely to be March before any hearings are held. Resolution has been elusive for the last two years. Don't count on that changing this year.

Indicator #2: Carrier Confidence

During economic slumps, pundits point to consumer confidence as a leading indicator. In this case, look to carrier confidence. Carriers seem to be adapting their plans to accommodate modest growth rather than aggressively pursuing massive change agendas.

With 2.5G under way, most carriers can handle anticipated subscriber increases for the next 12 months. This year, they hope to prove their business cases with wireless data — roughly translated, make money. But will it be an all-out push?

Inside Track: Capex budgets suggest controlled and conservative plans. The good news is the Top 5 carriers will begin promoting wireless data initiatives by mid-year. Once that horse is out of the barn, it will become a race among the fivesome and wannabes to “out-speed” each other in data rates. Count on a couple of hares that blow their budgets up front and tucker out just as a tortoise or two scoot by.

Indicator #3: Pink Slip Slip-Ups

The 2001 HR bloodbath at most companies has had time to prove its constructiveness. Underlying the obvious question of whether the cuts led to sustained business savings is an ominous concern. Did the cuts eliminate fat or cut through the bone? As wireless rebounds, will the intellectual property that once infused innovative companies still be there, or will companies have to rebuild that too?

Inside Track: Although the Big 5 wireless network companies slashed employees and budgets throughout last year, some apparently haven't achieved parity yet. Motorola and Lucent predict additional cuts this year. Expect to see a brain drain across wireless later this year that rivals the engineer shortage of 2000.

Indicator #4: Signed, Sealed, Maybe Not Delivered

As slow as the fourth quarter was, carriers and suppliers still signed some respectable business contracts. An increase in these agreements will validate carrier confidence and prove their aggressiveness in pumping up the market.

Inside Track: Be warned, a signed contract doesn't guarantee business. Consider NextWave's agreement with Lucent to build its cdma 2000 network in 95 markets. Although most contracts will carry more validity than NextWave's, count on a few diminishing in overall value due to mergers.

Indicator #5: Stock to Enterprise

When Fortune 500 companies begin adopting wireless data solutions, carriers will cash in on their golden goose. However, most enterprises remain shell-shocked from last year's economic blitzkrieg.

Inside Track: Like carriers, most Fortune 500 capex budgets remain close to 2001 levels. Enterprise management traditionally has been reticient to push novel technologies, especially in bad economic times. But they will change their tunes in 2002 when they need an edge in a toughened market and a boost for their morale-sagging field force. Also, the corporate ranks were pillaged last year. Capex for fewer employees should go farther.

Indicator #6: Innovation

Now that much of the innovation wheat has been separated from the chaff, carriers can implement the best and brightest more confidently. As exciting as Bluetooth and 802.11 have been, they still haven't revolutionized anything. Today's innovations must begin proving their prelaunch hype. Otherwise, at the end of the day, it's just the same old wireless voice service.

Inside Track: Fortunately, venture capital continues to pour into wireless innovation. However, the five other indicators need to gel so innovation can thrive, rather than lie fallow on developer workbenches.