Cellular phones are, as you well know, ubiquitous these days. And for the past decade, the dominant players in the industry have been well distributed around the globe. There is strong representation from Korea, Japan, Scandinavia, Germany, the U.S., China, Taiwan, and lots of activity elsewhere, too. A U.S. company, Motorola, was first to build a cellular phone, but after two recent telecom industry slumps, some of the venerable North American stalwarts have ceded considerable ground to competitors abroad. But, in a remarkable turnaround, the recent trends towards convergence have revitalized the local telecom sectors, driven largely by the media, the Internet, personal computer and startup sectors.

Convergence, in this case, refers to the confluence of mobile phones with data services, media consumption, and a shift in the phones themselves towards being handheld computers. This confluence, to a large extent, seems related to a flurry of activity based out of the U.S. high-tech sector, and notably Silicon Valley. Now, being based here, I have a bias towards Silicon Valley, but (like many others) I came here for a reason: If there is a single place on earth where the combined energies of wireless, media, Web 2.0, computing, and startups congregate more than any other, then it’s here.

The region combines the device ingenuity of Danger and Apple, the operating system innovation in Android, the communications leap of Twitter, the network powerhouses like Cisco, middleware from Sun’s Java, database specialists like Oracle, content from leading portals like Yahoo, search powerhouses like Google, processor giants like Intel, some 40% of U.S. telecom venture capital activity, corporate VCs, startups of every stripe … and those are just head offices. Add in the requisite field offices from dozens of tier-one operators, and quick links to our media and telecom neighbors in San Diego and Los Angeles and you can see how the region has a powerful effect on the global telecom industry. And the convergence of these formerly separate sectors has helped the USA reclaim an important leadership position in the global industry.

But I don’t intend to spend the whole article pimping my region. My point is that Silicon Valley is a microcosm, representative of the kind of activity that is going on globally, and I’m thrilled to have a front-row seat to see these different sectors converge … sometimes gracefully … usually not.

(Coincidentally or more likely by design, this is just the kind of broad view of telecom that RCR Wireless News’ publisher, Jeff Mucci, described as his “RCR Wireless Ecosystem.” Mucci wants to deliver the news, but also an understanding of how shifting power structures, advancing technology, and consumer demand are going to drive changes in the industry. And if we do it right, we can give you the tools to manage those changes as best you can.)

As a side story on the hurdles of convergence; if you’ve ever been at a negotiation table when 800-pound gorillas of media meet with 800-pound gorillas of telecom and an 800-pound gorilla from the handset industry, then you’ve witnessed some interesting negotiations. I remember one time in 2000 when a media company was meeting with a telco to discuss a content distribution deal. The telco said: “In terms of financial compensation, we’re thinking $500,000.” The media company agreed, finding the number met their requirements. It took about five minutes more to realize that both companies expected that the other one would be writing the check. A no cash deal was eventually reached.

Convergence no longer just a buzzword

For years you’ve heard the term “convergence” applied to mobile telecom. It’s been overworked to the point where it’s seen as an MBA buzzword. But it never was so trite a word, and the present times prove that. Formerly the exclusive domain of geeks and insiders, convergence is actually happening in the mass market. Uncles, grandmas, and friends are watching media on their phones, posting camera-phone pictures to blogs, looking up scores, messaging or mobile tweeting

From 2000-2007 we over-promised convergence, but the pieces weren’t in place for the average Joe to actually use any of it. To deliver a handsome mobile phone that connects to excellent data networks, is fun to use, and has compelling content is not something that any single player could bring to market in 2000. (No, not any single player, despite what some fanboys are thinking of right now.) To do so would require that the component makers have big bright screens, touch technologies, small but powerful amplifiers, etc. It would require the network equipment vendors have fast, always-on mobile data kit, and the carriers have deployed that kit over a broad footprint. It would require an OS designed for the mobile world: quick, efficient, and finger friendly. It would require a billing system that could handle the new content, and a store from which to sell it. It would require device makers to put the hardware together with a good OS and sleek design. It would require content companies to re-think their apps and services for the mobile market. All told, no small feat. It’s hardly surprising that convergence was little more than a buzzword and a promise for most of this decade. The real surprise is that we’ve come such a long way in such a short time, and pulled it all together. (For those aforementioned fanboys) I think Apple really appeared at the right time to dot the “i”s and cross the “t”s and show the market what the finished product should look like.

Convergence has happened – just look at the phone in your pocket. And it was a heck of a complicated undertaking. Massive stakeholders made their best moves, some won, some limped home, and some are gone forever. Yet the net results are pretty darned impressive. As an industry, we can be proud of what market forces, capitalism, competition, drive, and the spirit of invention have pushed us to produce. We’re an industry that ‘does good’. We help people communicate, which is a fundamental human need. But now, with convergence, we help people access information. Knowledge is power, and we played a role in sharing it. That applies to the most trivial multimedia fart app which may give people some joy, to the powerful SMS apps that fishermen in India use to plan around the tides and learn the price of fish at market.

But don’t think for a minute that convergence is done, or that the ballgame is played. We’re in early innings, you’re the pitcher. I’m lucky to be situated in a great place and have an up-close view of the game. Hopefully, in future articles, I can send you some signals on what kinds of balls to throw.

- By Derek Kerton | RCR Wireless News

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