Wireless Adoption Becomes Part of Companies’ Strategic Plans

A collaborative study reveals the wireless industry is a strong vertical market

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Business-services companies are adopting wireless technologies at a faster pace than other vertical markets, according to a study by Reality Research and Consulting.

Reality finds more than one-fourth of IT professionals in the business-services market (27 percent) now use or plan to deploy wireless technologies for their companies. By comparison, one-fifth of IT executives in health care, accounting and manufacturing are citing wireless in their strategic plans. The findings reflect that service-oriented companies are best-positioned to leverage early wireless applications, such as instant messaging, to improve customer relations and productivity.

Reality also finds the earliest adopters of emerging technologies are most inclined to implement many types of solutions. For example, the number of businesses using or planning to deploy wireless is highest among those using Linux (35 percent). Among companies using wireless, more than twice as many (58 percent) report that videoconferencing is part of their IT purchasing plan, compared with nonwireless users.

Tapping Into 3G

Reality believes enterprise IT professionals will increasingly tap into wireless as a strategic tool for meeting customers' needs. One in 10 enterprise respondents surveyed during the second quarter of 2001 cite 3G and 2.5G, collectively, as the technology that will most significantly change the way the world communicates. 3G, the "third-generation" mobile phone technology, also known as high-speed data transmission, holds the promise of superfast "broadband" access to the Web.

Telecommunications companies in the United States aren't expected to roll out 3G offerings until 2004, following the introduction of 3G in Japan in 2002 and in Europe beginning in 2003. Meanwhile, operators are launching an alternative,Internet mobile system 2.5G, also known as Global Packet Radio Service, to serve as a bridge between current systems and 3G. That will allow continuous Internet access and transmission of long text messages with attachments and basic video.

Telecom Rebounds

Looking at forecasts, all wireless service providers surveyed by Reality and Roper Starch Worldwide* in the second quarter expect both top-line revenue and bottom-line profits to grow from June 2001 through June 2002. Reality believes the findings reflect that emerging wireless providers often have hybrid business models,half of ISPs reported offering wireless connectivity services in 2000,giving their companies new ways to find growth opportunities. The findings indicate service providers see viability and strength in their own business models, even as the telecommunications sector as a whole slowly rebounds from its current slump.

Reality finds most communications service providers believe recovery in the telecommunications sector began to take hold in the second quarter. Included in those ranks are wireless service providers, interexchange carriers, local carriers and others, such as Internet service providers. More than one-third (38 percent) report seeing signs of improvement or stabilization with some growth (36 percent). Only 14 percent characterize the sector as being in a state of decline, indicating that a small minority are bracing for further downturns. Among those service providers that believe the sector lacks signs of improvement, the outlook for recovery is cautious. More than one-third (38 percent) predict a rebound will take more than two years, while slightly more than one-third (34 percent) expect recovery in less time. Reflecting continuing uncertainties in IT-sector supply chains, one-fifth of respondents (22 percent) cannot specify when a turnaround might take place.

*Methodology note: Reality's wireless-adoption findings came from an online survey of more than 5,000 responses from IT professionals at companies of all sizes. Roper, with Reality's input, completed an additional 203 telephone interviews with telecommunications service providers and enterprise end-customer businesses for industry outlook information.

Dean Mayo is manager of consulting for Reality Research and Consulting, an independent business unit of CMP. He can be reached at dmayo@cmp.com.

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