What is ahead for private radio?
One of my passions in recent years has been to learn about investing. Not
surprisingly, this is driven by my approaching retirement in a few years. I
have consumed many books in this pursuit. My studies have caused me to read
much about economics and other macro issues such as demographics, population
shift, job relocation, etc.
I just put down a book that spoke at length about the world wide changes
that will affect all of us, and our children over the next 50 years or so.
While contemplating a world that will be much different than most of us
foresee, I began to think about what all this means for the Private Wireless
Industry.
As we all know here, many of the local “mom and pop” two way shops have
already disappeared. While many will blame that on a very successful ESMR,
the fact still remains that those shops are gone.
When was the last time you saw someone start up a two way radio business? By
that I mean a “real” business, not selling radios out of the trunk to the
other guys at the VFD. Nothing breeds competition like success. The fact
that new competitors are not appearing should tell us something.
As the users demand more mobile capabilities, more features, easier
operation, lower upfront costs, and better service, the demand for
“installed” mobile equipment will continue to diminish. The few 800 MHz SMRs
left and the UHF community repeaters and UHF trunked (often partially or
fully non-compliant with FCC rules) systems will not be able to satisfy
them. This will lead to less and less utilization of these systems.
Eventually, the owners will have to abandon them as they can no longer pay
the overhead of operation and maintenance.
The demand for spectrum from the voice and data public wireless carriers
will continue to increase. Eventually, the industry, and congress will force
the FCC to refarm the UHF band in order to turn the fallow field into
productive use. No longer will a 25 kHz slot be allowed to waste away on two
lingering users of a community repeater.
Public Safety will be driven more and more to ever more “integrated system”
designs, requiring large scale contracts not feasible for the local shops.
The demand for conventional B&I products will be satisfied by the off the
shelf products so often found at national retail outlets now. The local
shops will not be loading their own systems, so vendors will have
insufficient demand to justify continuing product development. Aging of
current fleets of equipment, and lack of innovative new products will
further drive the users to seek public providers for their communications
solutions.
Few young people are fascinated by the old simplex equipment with limited
range, and little functionality. Try to tell them there is a future for them
in that technology. “That radio doesn’t play MP3 files? No way!”
I enjoyed my years in the business, but I really believe it is the buggy
whip business of the new century. The future will be one of ever increasing
efficiencies. Even government waste will finally be squeezed as the
population growth rate declines and a growing older population has to be
cared for and supported by fewer workers. This increasing efficiency will
cause all resources to be reviewed for utilization, including spectrum,
under a much harsher light than has already been the case.
The world is moving to more globalization and more of our workforce will
have little if any attachment to the old technologies we were comfortable
with. The kid from India who ends up over here running a company (more jobs
are outsourced TO the U.S. than are outsourced FROM the U.S.) will have had
his first encounter with wireless communications as a Blackberry, duplex
phone, web surfing gadget on his belt. Who is going to tell him that he
really needs a 4 watt bulky local only simplex brick?
