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The Road to Next-Generation Wireless

The past decade has been a period of unprecedented expansion in the wireless telecommunications industry. In the years since the introduction of 2G services, mobile voice and data access has rapidly evolved from a costly luxury enjoyed by a privileged few to a ubiquitous necessity that readily crosses demographic boundaries. 

Today, the effects of increased frequency allocation and provider competition have manifested themselves in a wireless market where soaring licensing and infrastructure costs routinely clash with the realities of an especially challenging commercial environment. Characterized by powerful downward price pressures and consistently high levels of subscriber churn, the mobile telecom arena has become a progressively more unlikely place from which heavily mortgaged network providers can extract reasonable returns on their investment. Thus, across much of the industry, advanced 3rd Generation applications are now viewed as a means by which current commercial impediments can be overcome. Through the proliferation of robust 3G capabilities, providers see compelling new opportunities to break the competitive stalemate, while substantially growing operating margins with newly forged services.

Unfortunately, however, the implementation of next-generation capabilities has not yet proven itself to be the magic bullet that many were anticipating. This is especially true in urbanized regions, where extremely complex signal propagation environments exist alongside rapidly escalating subscriber densities. Instead of becoming an instant source of revenue expansion, these highly important markets have unveiled substantial technological gaps that now threaten the long-term viability of fully enabled 3G networks.

The current wireless marketplace exhibits a potent confluence of subscriber application demand, provider profit imperative, and fundamental technological challenge. In short, it is a particularly fertile environment for companies with proprietary offerings that support the growth of mature 3G functionality. Going forward, Jarvinian sees the bulk of opportunity being concentrated in these portions of the IT Mobility arena:

Network Enhancement - While wireless air interface standards have evolved significantly over the past decade, many other critical infrastructure elements have not.  Despite the fact that global wireless user base is now exceeding three billion individuals, essential antenna, filtration, and propagation control technologies remain largely unchanged since the earliest 1G low-capacity analog networks.  Such antiquated technologies collectively pose a significant threat to the broadband-centered universal subscription model of most providers.  Therefore, we see uncommon value in new proprietary capabilities aimed at expanding the bandwidth capacity and service reliability envelope of current and anticipated 3G networks.

Subscriber Unit Evolution - The speed and reliability of core network infrastructure is vital to the basic technical feasibility of mature 3rd Generation applications.  However, equally critical to the long-term viability of next-generation networking is the performance and sophistication of mobile subscriber units.  No matter how capable a network is, the ultimate choke point for application adoption and its corresponding impact on revenue exists in the quality of the “handset experience.”  Factors such as display size, form factor, processing speed, RF performance, and battery life combine in intricate ways to determine the usability of a device class and its ultimate acceptance by subscribers.  Thus, going forward, Jarvinian sees significant opportunities in organizations that posses enabling handset technologies (i.e. power and processing semiconductors, battery technologies, display technologies).

Content Intelligence - As wireless networks reach a certain maturity, an increasingly important factor in revenue expansion will not be infrastructure reliability or handset performance.  Instead, the richness and variety of content available to subscribers will be a driving force in the utilization of high-margin service offerings.  Yet, while the conventional Net experience offers ample content possibilities to users, the realities of the mobile environment inhibit the full expression of many prevalent media types.  Thus, there exists a pressing necessity for content intelligence technologies, which can transform existing broadband media into forms best suited for the mobile lifestyle.  Spanning a broad array of consumer and enterprise applications, Jarvinian views proprietary solution bearing companies in this space to be the most important software-based investment opportunities in the entire wireless sector.