NEW YORK-With the advent of a personal communications services overlay onto the nation’s traditional cellular landscape, 1996 also will mark the debut of the dual-mode wireless phone as a consumer product.
To Terrence Valeski, vice president of marketing for Pacific Bell Mobile Services, Pleasanton, Calif., the dual-mode phone is part of a rush to compete on the basis of quality of services offered, competition that will build the entire wireless telecommunications category.
Likewise, Dan Behuniak, Southeast region president for PrimeCo Personal Communications L.P., West Lake, Texas, expects that his company, “will be asked by a significant market segment for dual-mode phones.”
But David Woodrow, senior vice president of broadband services for Cox Communications Inc., Atlanta, is much less enthusiastic. “To the extent that our customers want dual-mode, we will provide it,” he said. “But I don’t like it because I believe it will increase churn and fraud. It’s more expensive and more difficult to use.”
In the view of Mark Golden, vice president for industry affairs of the Personal Communications Industry Association, Alexandria, Va., “the unsatisfactory answer is that all these statements are true.”
PCS offers significantly reduced susceptibility to fraud, compared to AMPS, the traditional analog cellular technology. But AMPS permits roaming, something PCS can’t now provide.
“Today, there is virtually 100 percent coast-to-coast coverage in traditional cellular, and most PCS providers want their customers to have coast-to-coast coverage, so it makes sense to build both into the handset,” Golden said.
“Initially, the immediate short-term prospect is for dual-mode between basic PCS territories, with analog for roaming. For a substantial segment of users, dual-mode is an important interim step toward providing anywhere, anytime communications until the broadband networks are built out.”
As the broadband buildout occurs, wireless customers may increasingly demand the ability to wander from one PCS network to another. That consumer preference would set up a “framework for a fairly large number of combinations on the market, and manufacturers would start losing economies of scale,” in handset manufacturing, Golden said.
That scenario would run counter to the trend of low-cost commoditization of handsets as a means to attract and keep customers. “I have not met a PCS provider who is looking to build customer loyalty by increasing the upfront cost. In fact, the market is going the other way.”
Consequently, Golden predicted that PCS providers in different but adjacent territories will select the same technology as their neighbors to permit roaming on the same frequency with the same technology from network to network.
“About 10 percent of our customers roam out of their region,” said Valeski. “Dual-mode PCS 1900 phones that default to AMPS will be available late this year. These phones will have GSM-to-GSM roaming.” Ericsson Inc., Motorola Inc. and Nokia Corp. are providing the phones.
PCS 1900 is the North American version of GSM, or Global System for Mobile Communications. “Part of what drives carriers’ acceptance here of GSM is its compatibility with installed networks overseas,” Golden said. “But for overseas calling, there are not yet dialable numbers internationally to other systems’ protocols.”
However, Valeski said Pacific Bell Mobile is looking to the dual-mode PCS 1900 phone as a future gateway to international calling.
Behuniak of PrimeCo predicts not only the popularity of dual-mode wireless phones, but also the coming of dual-mode, dual-band handsets. “Our roll-out this year will be a Qualcomm (Inc.) CDMA (Code Division Multiple Access) set,” he said. “Lucent (Technology Inc.), Nokia, OKI telecom, all are working on this.”
In a competitive marketplace like wireless telecommunications, there is no one right answer, Golden said. “One of the wonders of a competitive marketplace is that different carriers each will bring different visions into play. Some will be successful, some won’t.”
