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MWC: AT&T, Vodafone, Other CSPs on LTE's Promise and Regulatory Challenges

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Jeff BarakBy Jeff Barak

They might be fierce competitors, but all the service-provider chief executives speaking on the first day of Mobile World Congress in Barcelona were singing off the same song sheet. The high notes were the potential new business models LTE is bringing to the industry, while the low notes were the roles regulators played in determining spectrum allocation and, particularly in the case in Europe, in creating economically unviable competition.

Randall Stephenson, AT&T’s chairman and CEO, insisted the combination of LTE and the cloud was probably one of the most powerful technological developments the world has ever seen. The move from 2G to 3G to 4G, he noted, has been the fastest technology life cycle in our lifetime and he said we’re now moving into a different kind of mobile world, where connectivity is inherently assumed and content is in the cloud. Spectrum is the foundation for all of this, Stephenson said, and he called for light touch regulation and low capital taxation so as to help service providers find the investment to build the new networks.

The European service-provider CEOs were particularly scathing of the regulator. Vodafone’s Vittorio Colau insisted that regulatory policies have not helped internationalize the market in Europe, while adding that service providers were first asked to pay for spectrum and then forced by the regulator to give some of it to mobile virtual network operators (MVNOs), who then compete with the service provider.

Franco Bernabé, chairman & CEO Telecom Italia Group and chairman of the GSMA, the mobile operators’ organization that runs Mobile World Congress, complained that heavy regulation in Europe had created 109 mobile operators, leading operators to suffer from too much competition.

“One of the biggest challenges of our industry," Bernabé said, “is creating economically viable competition."

But looking on the bright side, service-provider heads agreed with AT&T’s Stephenson that the 4G future will bring new opportunities for the industry. Vodafone’s Colao said, “M2M really excites me, it’s just at the beginning," and he shared Stephenson’s view that LTE would not just change the telecommunications industry, but other verticals too, such as energy, the car industry, health, and transportation, which will be totally transformed by M2M.

In fact, service providers are already making money from non-core telecommunication businesses. Kaoru Kato, president and CEO of Japanese service provider NTT Docomo, said that his company had set itself a goal of realizing $11 billion of revenues in fiscal year 2015 from non-core businesses, such as M2M, health, mobile payments and so on.

And looking at their core business, the key, said David Thodey, CEO of Telstra, Australia’s largest service provider, is to make sure they protect the value of data.

“The worst thing we can do to data is to destroy the value of data the way we did to the value of voice," Thodey said.

Jeff Barak is the corporate editor at Amdocs and is blogging from Mobile World Congress for Amdocs Voices.

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