Life left in networking

By Fred McClimans, Network World |  Development

Wall Street be damned. Three recent announcements show an exciting future for the networking business.

First, AOL and Nokia announced a deal for joint development/deployment of the wireless access protocol for handheld devices. This is just what the struggling WAP needs -- the credibility of backing from two giants in their fields (especially in the U.S., where NTT DoCoMo will try to establish a foothold for its competing iMode). And by the way, if you think that AOL's recent layoffs are a sign of weakness, think again. Those layoffs were nothing more than a shedding of redundant overhead in the AOL/Time Warner merger.

Second, we have Verizon announcing a new "bonus minutes" wireless plan. Initially available in Tennessee, Alabama and Kentucky, the plan gives users a yearly reserve of minutes equal to their monthly subscription level (i.e., a 600 minute/month plan gives you 600 reserve minutes over a year). One of the biggest problems with wireless plans has been the high price you pay when you go over your monthly allotment of time. From a consumer and business perspective, this plan has "winner" written all over it.

Finally, SBC has won FCC approval to offer long-distance service in Kansas and Oklahoma. Based on its initial offering in Texas (which landed them over 1 million long distance subscribers in the first four months), this could prove to be a gold mine for SBC -- and a major headache for existing long distance providers. Let's face it, the average consumer likes things uncomplicated. While many focus on the myriad of "cents-per-minute" deals offered by the various long-distance providers today, I suspect that all things being roughly equal, most consumers (and perhaps businesses) would opt for a single solution. More important, it puts an increased level of pressure on the long distance providers as their competition continues to increase in both numbers and power. And from a business perspective, users seem much more willing to purchase long-distance services from local exchange providers than the other way around.

Could this be the beginning of the continued decline of AT&T, MCI/Worldcom and Sprint? Perhaps. Look at AT&T's recent desperate measures ($4.99/month) to sign up new subscribers for its Internet service, a move that could be interpreted as either an aggressive measure to gain local access positioning or a defensive move to keep end user mindshare.

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