Consolidation, Speculation, Specialization

In the wake of Vodafone's $66 billion stock/cash acquisition of AirTouch, last month's CTIA show floor was weighted with doomsday speculation. The word "consolidation" now snaps us all to attention; it has come to represent less opportunity. Fewer options for subscribers. Fewer customers for vendors. Mega-mergers once meant that this segment of the telecom industry was taken seriously. Now they represent an industry folding in on itself.

Popular theory on wireless has a mere half-dozen nationwide or global carriers controlling the universe of subscribers. The Vodafone-AirTouch merger is the latest blow in a series of explosive advances in that direction. There are, of course, other examples of the trend: Bell Atlantic-GTE and SBC-Ameritech. Who can blame someone for reaching the conclusion that consolidation is the future and that it will leave behind the majority of current players? On this battlefield, diversification applies merely to the services that these half-dozen providers will offer, not to the variety of carriers offering them.

In this frenzied speculation, the word "specialization" has been conspicuously absent from the language of back-office analysts. As we search for metaphors to explain these mergers, we overlook the obvious. Our end result, purpose and meal-ticket is the customer, and the customer doesn't see things the same way we do. It's time to stop looking at our future from the top down.

The wireless industry never will be an industry of thickly disguised monopolies, just as the U.S. wireless marketplace never will be one that adopts a single air-interface standard. If you're looking for a metaphor, look for it there. Different service providers will specialize in providing targeted services. Although subscriber growth, especially over the past three years, has been rapid and encouraging, analysts' projections of how many subscribers we'll witness in 2004 are cautious. That's because the enormous growth we've witnessed to date has been passive growth. The majority of subscribers you have now would have adopted wireless whether or not you marketed your services the way that you did. They would have been customers -- of somebody, if not you -- whether or not your sales team left the office each day at 10 a.m. to make sales calls. That's a harsh reality. What these mega-carriers will open up for us is a new environment of active growth. They will force service providers -- regardless of size -- to find their niche.

The common goal -- building breadth and depth of subscriber-ship -- demands diversity. A global carrier such as Vodafone-AirTouch will control a chunk of the horizontal consumer market. Competing alongside it in this upper tier will be AT&T Wireless, Sprint PCS, Bell Atlantic Mobile and Omnipoint. They're the 1-rate pioneers and have the resources to make pricing plans simple and affordable to the "average" consumer. But have you signed up for service from any of these carriers lately? It involves lengthy lines, long telephone hold times and customer service that, while attentive, makes no mistake that volume is the goal.

That's where the "independents" will play a critical role. As the giants build volume in total numbers of subscribers, smaller players can feed on the leftovers in their wake. And there will be a lot of leftovers.

As an independent or smaller carrier, your success demands that you adopt different sales practices. Keeping your eye on the prize does not mean mourning the subscriber numbers and customer profile of the controlling carrier in your marketplace. Your staff must be attuned to the specific needs of a vertical market. These potentially lucrative markets abound, and mega-carriers aren't in the position to provide them the packaging and pure investment of time they demand. Public safety hasn't been tapped for public wireless networks. Neither have traditional vertical markets such as utilities, transportation and agriculture. Even the business crowd principally responsible for first- and second-generation adoption of wireless has been under served by even the largest carriers. (How many of your co-workers are operating wirelessly under a voice-data packaging plan, customized for them by their service provider? See what I mean?)

With subscriber churn hovering between 25% and 150%, there clearly is a place for the smallest local carrier to build a loyal and airtime-rich customer base ... even as your competitors merge all around you.