Alcatel-Lucent: Mobile Data to be Sold at a Loss

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Rich Tehrani
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Alcatel-Lucent: Mobile Data to be Sold at a Loss

Alcatel-Lucent has a dire warning for wireless carriers and investors… You just aren’t going to make money from wireless broadband. The timing couldn’t be better <sarcasm> to get the news as global carriers are pouring billions into their 4G networks.

What leads the company to this conclusion? The challenge is operators are starting to tier their pricing which means users can get on broadband networks less expensively – moreover, voice revenue is paying much of the carrier bill and as it declines in lockstep with the cost of data plans – carriers could be losing money for years to come.

Marcus Weldon, CTO of Alcatel-Lucent made these arguments and if correct it may mean service providers will have to get serious about deploying apps, services and ads on their networks so as to remain viable business entities. Moreover, what is not mentioned in this Total Telecom article on the matter by Nick Wood is whether Weldon is taking into account the exponential increase in broadband use by everyone with a wireless device.

After all, SD video is going to HD and then 3D and don’t think users will only want to watch their videos one-at-a-time in the future. Expect them to watch a few at a time. Moreover – I am 110% sure live-streaming your life on social networks will become a mandatory activity for kids looking to drain their parent’s bank accounts.

Christian Von Reventlow at TMC's ITEXPO West 2010 discusses how the Avaya Flare interface was designed and what it's value is in the enterprise.

And this doesn’t even factor in two-way video conferencing for business which is gaining traction – and using tablets to continue these conversations on the go seems to be a major use of future tablets in corporate settings. Avaya built its entire Flare interface around this idea and is selling its tablets as personal telepresence devices – I wonder if this is factored into Alcatel-Lucent’s concerns.

It is tough to know for sure what the future holds but I think tiered data plans are genius for carriers to offer because it gets the lower-end of the market hooked and the need for bandwidth will not let up for the foreseeable future – and this should boost revenue and hopefully profitability in lockstep.

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