As the Mobile World Turns

October 1, 2009

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The US mobile phone industry is far from perfect. In a system where consumers are left to find their way through a bafflingly complicated and illogical system of service contracts and stripped down versions of the Web, sometimes it’s easier to view mobile technology in light of its limitations rather than its advancements.

That was until the iPhone came along.

It was sleek, ingeniously designed, and had more sex appeal than any phone that had come before it – not to mention all the frills of a near-complete mobile Web experience. It had network operators trembling with desire like cell phones set to vibrate. But the iPhone showed up at the ball with its hand on the arm of a rich hot shot: AT&T. Passions flared and desire brewed. AT&T had something that everyone wanted.

Now time has passed, and changes are on the horizon. The mobile network industry is about to face a new era of technological advancement – the era of 4G. Since next generation network upgrades will eventually translate to faster, smoother, and generally more beefed up mobile web surfing, 4G gives mobile network operators new ways to prove themselves – not to mention new ways to fail. Many mobile carriers have cast their votes, and the most popular 4G wireless standard at the moment appears to be Long Term Evolution (LTE). With a finish line presumably in place, the race to 4G can begin.

For AT&T and Apple, the honeymoon is over. Apple is reportedly bitter with AT&T’s comparatively weak network performance. (It looks like AT&T needs to hit the gym.)

Last year, AT&T publicized its investments in cell tower upgrades. Without boosting the capacity of its mobile backhaul pipes to prevent network congestion, AT&T’s cell tower upgrades haven’t actually translated to better phone performance for many iPhone users. Rumor has it, Apple balked at this approach and AT&T, ever the obedient mate, put its tail between its legs and started pumping out more investments in mobile backhaul capacity. Apple can always dangle its highly sought after exclusivity contract in front of AT&T’s face, which is why the network provider needs to show that its relationship with the phone will work well in the next era of mobile technology. However, with iPhone users already grumbling over network service issues, AT&T’s mobile backhaul investments could be too little, too late.

Verizon, the provider with the strongest network, was once rumored to have scorned marriage with the iPhone before it got hitched to AT&T. Now, after having released a parade of phones that elicited a collective yawn from the techie community, Verizon has had a change of heart. The company knows how to flex its muscles, and as the leading competitor in the race to 4G, its impressive speed may catch Apple’s wandering eye.

The iPhone isn’t getting any younger and there’s a constant stream of new, increasingly attractive phones traipsing onto the scene. Apple likely wants a dependable network by its side before the competition gets too thick.

Though AT&T, Apple, and Verizon could be entering a tenuous love triangle, they’re not the only players in the game. Both T-Mobile and Sprint know that the iPhone would scoff at the thought of courting either company - they can’t lay a finger on that touch screen. Yet, that doesn’t mean either company is about to grovel.

T-Mobile USA is said to be in talks with Clearwire – a wireless internet provider with significant investments in the currently less popular 4G technology known as WiMax. Yet, the relationship gets even more complicated when one considers that 51% of Clearwire is owned by Sprint Nextel, plus it has links to three cable service providers and Google. There’s a veritable orgy of deals at play in this corner of the ring.

Network operators know how to weave a tangled web of envy and romance. Like any good drama, the story could always have a twist just around the corner, meaning network operators are always on guard. Who will win the race to 4G? Who will conquer the iPhone’s heart? Will Verizon’s phone line-up come back from the dead? We’ll just have to tune in next week to find out…

Source:
“4G Wireless and the Ensuing Bandwidth Boom,” gigaom.com;
“T-Mobile USA Now Reportedly in Talks with Clearwire,” paidcontent.co.uk;
“LTE interest gathering steam,” telecoms.com;
Photo courtesy of: Watch Over Me (via tvrage.com).