RIM CEO Sympathizes With Wireless Carriers' Plight

AT&T has already made its stance clear, and earlier this week, Research In Motion co-CEO Mike Lazaridis spoke out in support of carriers, warning that wireless bandwidth isn't an infinite resource.

"Manufacturers had better start building more efficient applications and more efficient services. There is no real way to get around this," Lazaridis said in an interview with Reuters. "If we don't start conserving that bandwidth, in the next few years we are going to run into a capacity crunch. You are already experiencing the capacity crunch in the United States."

Friction between carriers and customers over wireless bandwidth usage is growing as new video and music applications place unprecedented strain on networks. Given the booming popularity of smartphones and the proliferation of new devices, wireless carriers are headed for a showdown with customers, and Lazaridis' comments show sympathy for the carriers' situation.

However, wireless solution providers are of the mind that carriers can solve their bandwidth issues by investing more in network upgrades. The reality is that applications are already being developed with an awareness of their bandwidth requirements, notes Joe Bardwell, president and chief scientist of Connect802, a wireless solution provider in San Ramon, Calif.

"To give users what they want, the carriers are simply going to have to increase their capacity. This is really no different than what public utilities of every kind have had to do over the decades as consumer requirements put increasing demand on their infrastructure," Bardwell said.

Quy Nguyen, CEO of Allyance Communications Networks, a solution provider in Irvine, Calif., says it would be unwise for carriers to expect concessions from mobile application and service developers.

"As consumers continue to drive the demand for more bandwidth-fueled apps, manufacturers and app developers will continue to capitalize on the opportunity. I don't think there's any sign of them slowing down to accommodate the wireless carriers' woes," said Nguyen.

On Tuesday, the wireless blog Boy Genius Report offered a more unvarnished interpretation of Lazaridis' comments. "RIM's pitch to carriers about data conservation doesn't mean a single thing. It's just another scam, and another [BS] tired line while RIM constantly delivers lackluster news and updates," Boy Genius declared in the blog post.

AT&T has been struggling to meet iPhone users' appetite for 3G bandwidth, but in 2010 plans to double its wireless network investment from last year, spending between $18 and $19 billion on network upgrades, The Wall Street Journal reported last month. That's a necessary move in light of AT&T's plan to add five Android smartphones to its roster in the first half of the year, as well as AT&T's deep partnership with Microsoft on the forthcoming wave of Windows Phone 7 devices.

Nguyen says all wireless carriers need to understand the macro-economic impact of their wireless network investments. "These bandwidth driven apps will change the way we live and interact." he said. "Imagine making video conference calls from cell phone to cell phone."