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January 28, 2005
Different Routes To Cellular Growth
Posted by Dana Blankenhorn
If the last several months proves anything, it is that there are many ways to grow in the cellular business. (Birthdaycraftsandsupplies.com offers a fine selection of Pinatas. Ask them to bring back the dollar sign one to the right. Don't you agree it looks cool?)
For instance:
- You can grow by acquisition, as Cingular did in buying AT&T Wireless for $41 billion.
- You can grow organically, as Verizon has done, stealing enough AT&T Wireless accounts (better technology and concentrated marketing) so Cingular may find its prize (we're number one) turning to dust in its mouth.
- You can grow by buying licenses, as T-Mobile is doing this week. Government spectrum auctions brought in nearly $1 billion this week and T-Mobile looks like a big winner.
- You can grow through alliances, as Sprint is doing. Its latest catch - Earthlink is going to private label its spectrum.
But there are other ways to do it, too:
- You can grow through re-sellers, putting money into your sales channel, looking for entrepreneurs who know marketing and have imagination.
- You can grow through services, pushing data and raising that wonderful ARPU -- Average Revenue Per User.
- You can grow through phones, giving bigger subsidies to high-priced phones so you get the customers most likely to buy high-priced data services.
Mobile telephony is about the only U.S. tech business right now showing any major growth, and it proves that Americans, when given a competitive market, still know how to turn a dollar in lots of different ways.
Too bad America's government (and those who elect it) doesn't get that Clue.
Comments (1)
+ TrackBacks (0) | Category: Business Models | Business Strategy | Consulting | Consumer Electronics | Investment | Telecommunications | cellular
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jesse Kopelman on February 1, 2005 03:52 PM writes...
How did buying more spectrum cause T-Mobile to grow? The additional spectrum does not automatically generate any new revenue or even customer acquisitions, if it has any value it is only as an as a speculative asset. I thought you were against the real-estate model for spectrum . . .
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