TC2's David Rohde on Telecom

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Nextel shutdown illustrates how consumerization is beginning to dominate wireless

By David Rohde Posted May 31, 2012

Earlier this week Sprint announced that it will shut down the Nextel iDen network as early as June 30, 2013. It’s hardly a panic-worthy development – Sprint has been telling major customers for a while that the shut-off would happen sometime in 2013. Sprint also has been upgrading in-building antenna systems, and it says that Nextel customers will get “favorable” offers to move to its newer CDMA-based Sprint Direct Connect service.

But the timing of the public announcement of the end of iDen can’t be separated from a key FCC decision last week, one which opens up the 800 MHz band in question for 4G LTE. With Verizon galloping ahead in 4G, pulling AT&T behind it and ramping up pressure on manufacturers to make 4G-compliant devices, Sprint’s real (and rather urgent) focus is on 4G. And since the 800 MHz band offers longer reach than Sprint’s 1900 MHz band where it first planned to deploy LTE, Sprint is likely to hop onto the 800 MHz LTE buildout opportunity sooner rather than later.

No matter how much energy Sprint really expends on promoting Sprint Direct Connect, iDen users have always been notoriously locked in to iDen. If Sprint’s CDMA push-to-talk service is not as good – indeed if it isn’t better than Verizon and AT&T’s push-to-talk services – Sprint may lose both market share and another of its footholds in the enterprise. Forcing users to make a change is always a catalyst for users to look at other suppliers.

The now-imminent end of the original push-to-talk service illustrates a trend that’s buffeting corporate telecom professionals, whether they have much of a Nextel user base or not. Stand-alone wireless enterprise products and solutions providers – including BlackBerry-maker Research in Motion – are finding it hard to thrive in a world of rampant consumerization. Unlike the Nextel walkie-talkie, of course, the BlackBerry itself isn’t going anywhere – even if RIM is sold in whole or in part, the product will continue to have a significant following. But consumerization is forcing the end of policies that once kept the BlackBerry exclusive among corporate smartphone options. We’ll look at that more tomorrow.

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