REDWOOD CITY, Calif. Like many wireless carriers, T-Mobile hopes to buck the downturn by expanding its cellular network and portfolio of handsets. However, the company wants to streamline the number of application environments it supports and lower the costs of its back haul network.
The picture is not all rosy in cellular. Handset penetration is approaching saturation at about 83 percent in the U.S. today, said Dan Schulman, chief executive of Virgin Mobile USA in an onstage interview at the Wireless Innovations event here..
"The growth of new subscribers is absolutely slowing," he said, echoing another recent report. "The industry went form really solid double-digit growth in the last decade to 3-5 percent this year and less than that next year," he added.
The slowdown is already creating pricing pressures for services. Schulman reported that in the fourth quarter of last year sales of mobile games and ringtones were down five percent and average selling prices were down 10 percent.
"Part of the challenge for carriers is wading through the myriad of runtimes available for developers," said Cole Brodman, chief technology officer for T-Mobile in a separate talk here. "I'd like to see fewer, and to the extent I can facilitate that I will make choices of perhaps two or three environments that most help my business," he added.
Ericsson floated the idea late last year of creating a standard application framework for smart phones that could unite multiple handset environments. Part of the carrier's problem is cost of managing developers and support.
"My average customer calls me more than eight times a year," said Brodman. "You don't want eight customer touches a year," he said.
Google's Android environment is one of T-Mobile's biggest bets. Although the company only ships the HTC G1 phone now, "you will see tens and tens of Android products make it to market [in the next year], and I am very encouraged by the pipeline," he said.
The G1 hasn't created the avalanche some pundits predicted, but it has generated some significant numbers, he said. The G1 has access to 2,300 publish applications, typical G1 users download 40 of them and about 80 percent of G1 users go to the Web daily.
"We are seeing a trend of people moving away from voice and text messaging and displacing some desktop usage," he said. However he also called for better ways to organize and search Google's mobile app service because "users have a hard time sorting through and finding what they really want."
T-Mobile has already done at least one over-the-air software upgrade for the G1 and more are planned. However, he declined to comment on what new features it will enable.
On the back end, T-Mobile is continuing to build out its 3G net and lay out plans for what follows it. The current net delivers a peak of 1 Mbit/s with 3G available to more than 100 million potential subscribers in 135 cities with plans to double the number over covered people and cities this year.
T-Mobile aims to triple peak output on its HSPA network to as much as 3 Mbits/s soon. It is also looking to simplify its network architecture and migrate to an all Internet protocol back end.
"One of the critical factors for wireless broadband is affordability of scale in the back haul--that's the chokepoint," he said. The back haul needs to let me serve the next incremental Mbyte for an incremental cost.
The carrier has not set its plans for 4G networks yet. However parent company Deutsche Telekom conducted a trial of LTE technology last fall.
"Very few carriers have pulled back significantly [on cap ex spending], said Mark Lowenstein, managing director of Mobile Ecosystem, speaking in a panel session here.
"The 3G nets are still being built and 4G nets are starting," Lowenstein said. "The contracts are being awarded. That's one reason I think infrastructure is hot, but it still costs 10 times or more to deliver a Mbyte of data over a wireless compared to a wired net," he added.