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Telecom tipping points

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I still haven't read Malcom Gladwell's “The Tipping Point,” but like my fellow social-climbers, I try to refer to it whenever possible. Now that I've done so, let's talk more generally about cause-and-effect relationships. Several telecom industry events in recent weeks have inspired me to look more closely at the actions that led up to them.

Consider the case of WiMAX: On page 8 of this issue, Kevin Fitchard delivers the climactic, analytical epic in his six-story series — published online at www.telephonyonline.com over the last two weeks — on various vendors chasing the WiMAX market opportunity. As vendors and service providers convene at WiMAX World in Boston this week, there will be a sense of positive realism about their prospects that will come really almost pretty close to matching the sense of unrealistic hype that has preceded the market to date.

In no small part, that's because Sprint chose Mobile WiMAX as the next step into its broadband evolution. With Sprint, WiMAX becomes a real alternative for two groups that had been collectively indifferent to it — mobile carriers and major U.S. carriers. Without Sprint, WiMAX remains the newest and least-proven broadband alternative on the market and has little or no future in the U.S.

Next, consider the case of NXTcomm: On page 12 of this issue, Carol Wilson follows up on a news piece she wrote for TelephonyOnline last week. The Telecommunications Industry Association and the U.S. Telecom Association are re-constructing the partnership the gave the industry Supercomm and producing a new show, NXTcomm, that will begin in June 2007 and replace Globalcomm and TelecomNext, the events that these associations invested in after their previous split.

Now there might have been multiple actions and trends — several carrier mergers + several vendor mergers + uneven attendance at Globalcomm and TelecomNext + vendor budgets strained by increasing travel and trade show costs + public and private outcry from the members of these associations in recent months — that led to this decision, but the biggest, single cause might be AT&T's pending acquisition of BellSouth. The proposal of that deal, which came after the TIA/USTelecom split, but before either of the new trade shows debuted, completely altered the market's makeup by consolidating two of the biggest network capex budgets into one. With this deal, vendors consolidated to better address a smaller market of larger customers, and neither vendors nor carriers could afford to split their trade show allegiances. Without this deal, there's more logic for having two trade shows addressing a broader industry with more numerous contract opportunities. Without it, there is still plenty to debate about the validity of holding two trade shows for the same general audience, but not enough evidence to force the industry back to one.

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