The cellular telecommunications industry is making steady progress introducing advanced mobile data services as it works to overcome its own fragmented nature as well as the competition.
According to the most recent “Report Card” issued by the CDPD Forum, carriers are deploying Cellular Digital Packet Data technology in 78 metropolitan statistical areas covering nearly 100 million people. Sixty-seven of those MSAs have full service availability that includes authentication, published pricing, billing and customer service, the forum said.
“From the customer perspective it’s clear that mobility is a growth industry. The remote dial-up business is also growing. Since we already have the network, CDPD is a natural choice,” said Steve Cullen, vice president for marketing and sales in AT&T Wireless Services Inc.’s Wireless Data Division.
“Our customer numbers increase every month. This is an accelerating trend; momentum is building and system build out continues at a nice pace,” he said.
In addition to the development of packet data services, there also is a new interest in providing enhanced circuit-switched data services using modem pools and a hybrid CS-CDPD protocol.
According to Mirva Anttila, a wireless analyst for Northern Business Information, wireless data will account for more than 4.2 million subscribers and nearly $1.5 billion in revenues by 1999 with cellular data services grabbing the lion’s share.
But in an industry whose dominant planning paradigm often seems to be “Build it and they will come,” cellular carriers-CDPD carriers in particular-are having to monitor market development carefully. One year ago, AirTouch Communications Inc. abruptly scuttled its CDPD roll-out in San Diego when management concluded there just wasn’t enough market demand for it.
Since then, cellular carriers and vendors have made progress in key areas. Devices, such as smart phones, have been developed that incorporate CDPD capability in a familiar form factor at a price that is becoming justifiable for the end user. Applications are being developed in conjunction with major independent software vendors such as Microsoft Corp. and Oracle Corp. Value-added resellers are being recruited for distribution.
But the AirTouch withdrawal was a reminder of the difficulties in providing the customer with reliable, seamless wireless data service on a national scale, perhaps the biggest hurdle of all.
Because advanced cellular data technologies leverage the established analog network, they potentially offer the widest coverage footprint as well as the greatest potential for mobility in terms of roaming. But the reality of industry fragmentation stemming from the breakup of AT&T Corp. and the subsequent cellular licensing process has dampened the acceptance of both circuit-switched and packet-switched wireless data by corporate America.
“The biggest of the big haven’t got what they want,” according to Mark Langner, director of voice service consulting at TeleChoice Inc.
“Voice cellular telephony had luxury users as an early adopter market to support network buildout but data doesn’t have a good set of early adopters,” he said.
Langner notes that big business customers are historically the early adopters of new information technologies. They drive usage up and service pricing down, buy enough equipment in bulk to produce economies of scale to attract horizontal users and push applications development.
“The Corporate 500 is the nut. They fill up the network while mid-sized companies generate the profits for the carrier. They anchor your network and also become partners for the early adoption of new technology,” he said.
Langner believes that many corporate information technology managers have been turned off by the lack of ubiquitous wireless data coverage as well as by problems in contracting for the service in terms of coordination and account management.
He points to cellular data’s biggest success story-United Parcel Service-as the exception that proves the rule.
To implement a national package tracking system using circuit-switched cellular data, UPS had to negotiate for unified billing, network management and volume discounts with a total of 49 carriers covering more than 700 markets across the United States.
“There are not a lot of those” willing to make this kind of effort, Langner said.
A TeleChoice report also noted that CDPD Specification 1.1 does not standardize usage billing systems across networks.
But AT&T’s Cullen noted that passage of the deregulatory Telecommunications Act of 1996 will make it easier for cellular carriers to negotiate interoperability agreements. Several already have been announced.
A hybrid CS-CDPD specification approved by forum members in July 1995 will also help build a ubiquitous coverage footprint. Users outside of the CDPD coverage area now can access the network with a circuit-switched connection.
“It’s easier for the market to grasp a circuit-switched application. They may think `If I can do it on a wireline modem, why not on a wireless modem?”‘ Langner said.
Circuit-switched data might build a huge base of customers doing data applications and help carriers hold onto their core business users without requiring a retrofit, he said.
Overall, Cullen said cellular data, as it forges ahead, is a humbler industry now than in the early days when there was too much overpromising about what was immediately achievable.
“People are pleasantly surprised by how much of the network is up already, the depth of coverage and interconnection between networks. I’d rather they be pleasantly surprised than disappointed,” he said.
