Nearly half of the 20 companies holding licenses for broadband personal communications services have made firm technology decisions, but others continue the difficult task of weighing options.
“It is like building 10 years of cellular all at once,” said Jack Finlayson, vice president and general manager of Motorola Inc.’s Pan American markets division.
Launching a PCS system is complex. There is no equipment operating at 1.9 GHz anywhere in the United States. Equipment for 1.9 GHz is only now being manufactured. But that doesn’t pose too much of a hurdle because 800 MHz cellular equipment can be manufactured to operate at 1.9 without great difficulty, Finlayson said.
One of the favored PCS technologies, Code Division Multiple Access, is just coming out of the testing stage and only now is being commercially deployed in a cellular market, such as Los Angeles.
CDMA was selected this summer by PCS PrimeCo L.P., one of the three large licensees. Another large operator, Sprint Telecommunications Venture, is in final vendor negotiations for CDMA equipment. The third large operator, AT&T Wireless Services, is using Time Division Multiple Access.
A year ago, CDMA faced strong competition from the Global System for Mobile communications standard because GSM networks were successfully operating abroad, said Scott Erickson, vice president of marketing for the wireless division of AT&T Network Systems.
“CDMA may have shown advantages, but time to market was clearly the issue. But in the last year, the standards and development process and the industry has kept pace. Now, CDMA is out there, they can feel it, they can talk on it,” Erickson said.
PCS may be an adjunct operation for licensees with cellular holdings, but it is a new business for some auction winners, said Frances Kelly, business analyst for GCI Communication Corp., a long-distance company that won a PCS license for Alaska.
“For us, it’s a new business. We’re looking at all sorts of factors,” Kelly said, such as how PCS fits in with the company’s 73,100 long-distance customers. Consequently, GCI has not chosen a technology.
While the thought of choosing brand-new technology put some PCS operators on the “Will it work?” fence, it still isn’t the biggest encumbrance facing PCS deployment, said Motorola’s Finlayson.
“You don’t want to ship equipment and have it sit in the warehouse. There is microwave clearing to do and site acquisition. When you’re paying interest on a $7.5 billion license, there is pressure,” he said.
But unlike cellular veterans, PCS operators may not have to wrangle with as many 100-foot blue monopole towers due to the advancement of technology, miniaturization and the silicon chip, Erickson said. “Installation of these (PCS) minicells is easier. They are small and can be put on the backs of billboards, or operators can lease the top of buildings. Cells used to take four to six weeks of effort to put up. These will come from the factory, ready to go,” Erickson said.
After the auction ended March 13, BellSouth Corp.-a big TDMA proponent for cellular-announced it had chosen GSM technology for PCS and contracted with Northern Telecom Ltd. to supply equipment for BellSouth’s Charlotte, N.C., and Knoxville, Tenn., PCS properties.
Afterward, Pacific Telesis Mobile Services chose GSM, agreeing to a $300 million contract with Ericsson Inc. to equip PacTel’s Los Angeles and San Francisco PCS networks.
PrimeCo and Sprint announced their intentions this summer. AT&T is wed to TDMA by its acquisition of McCaw Cellular Communications Inc.
Others remain silent. Southwestern Bell Mobile Systems, which is a TDMA proponent in its cellular market, will not say what it is doing with its Memphis, Tenn., Little Rock, Ark., and Tulsa, Okla., PCS properties.
When cellular was built, operators switched on cells 15 to 20 at a time. With build-out pressure squeezing PCS operators, they are expected to turn on 150 to 200 cells at once.
If any of the auction winners decide not to build, their licenses can be sold according to Federal Communications Commission auction rules. The ownership change would have to go before the commission; restrictions on re-selling a license apply only to the entrepreneur-block auction.
