Where is the “the cloud” headed in 2010? What about 4G, service provider competition and communications spending habits? Mike Jude, program manager in the consumer communications services group at Stratecast, a division of Frost & Sullivan, answers those questions in this edited transcript, the second in a two-part series. (Click here to read Part I.)
xchange: The move to cloud services and ultra-broadband (DOCSIS 3.0, 4G, GigE) continues to gain momentum. How will this change the landscape in 2010?
Mike Jude: More digital is better. Higher speeds in the digital domain are better. I think what we see here as one of the primary drivers is the virtual business space. More and more companies are becoming more and more virtual. One of the dynamics we’re seeing here is the smearing of data. For example, we track the residential space in terms of the average data rate consumed. It’s starting to look like there are quite a few people working at home. So the notion is that as the economy becomes more virtualized, the need for more bandwidth to residences is increasing. We’re seeing the evolution of things like the cloud, distributed work environments, driving the need for bandwidth, and our belief is that with that kind of demand, the market will in fact deliver it.
XC: What are your thoughts on the roll out of 4G in 2010?
MJ: I think it’s going to happen, actually. Let me caveat that comment by saying that WiMAX isn’t really 4G – if you include WiMAX in the 4G equation, then that’s going to continue in 2010. WiMAX as a delivery medium for broadband has been the focus of quite a few applications for stimulus funding. Our expectation is probably quite a few of those will be approved and in rural areas especially.
But if you don’t believe WiMAX is 4G, and I don’t count it as 4G, then really no 4G is being deployed in 2010 because AT&T’s HSPA is really a 3.5G technology. And LTE isn’t truly 4G. If what we’re talking about is the next wave of 3G, say 3.5G, then you’re going to see that begin to deploy in 2010. I think Verizon is going to get some of its LTE out there; we’ll see AT&T continuing to improve its network to HSPA, which is at least in this iteration nearly as good as LTE. You’ll see that beginning to happen in 2010 and WiMAX will happen in 2010. But will it be pervasive by any means? It will not.
XC: What are the biggest challenges on the horizon for the industry?
MJ: Depending on the flavor of your advocacy I think it would be that public policy becomes a really big concern. How the regulations are going to evolve, what they’ll favor – for the network operator, it’s all about who gets the money. I talk to a lot of carriers and operators and my question to them is, what do you think about net neutrality, the Fairness Doctrine? And the response I normally get is they’re waiting to see how it all settles out. My response is this is really significant stuff we’re talking about here. Depending on how it evolves it could be make or break for some carriers. I believe that’s one of the big challenges for CLECs, ILECs, RBOCs – all of them need to truly understand what’s going on in the regulatory arena and get involved. Don’t take a passive stance because regulation really will determine how businesses are structured.
