Ericsson Inc. is prepared to go head-to-head with a strong U.S. alliance in hopes of striking an early position in the U.S. low-tier equipment market.
Ericsson’s new product, the SuperCordless phone, is based on the Digital Enhanced Cordless Telephone standard of Europe, DECT. The phone system is scheduled to be ready for delivery the first quarter of 1997. The company has U.S. headquarters and manufacturing facilities in Richardson, Texas.
Ericsson hopes to attract the interest of companies winning spectrum at auction from the U.S. government, designated for digital personal communications services.
So far, two companies have been intrigued. Ericsson said it has a letter of intent from Personal Technology Services Inc., a group with intentions of participating in the upcoming F-block auction.
Also, 21st Century Telesis of Newport Beach, Calif., said it is in discussions with Ericsson about using DECT in one or two of its 17 markets. But 21st Century already has made a $200 million commitment, recently increased from $100 million, to the PACS Edge consortium of Siemens Stromberg-Carlson, Hughes Network Systems Inc. and Bell Communication Research Inc.
Personal Access Communications System, PACS, is a hybrid, U.S.-created low-tier technology that has never been commercially deployed. It is expected to compete with DECT for the U.S. low-tier market.
The U.S. companies borrowed elements of Japan’s Personal HandyPhone System and the Wide Area Communications System developed by Bell Communications Research Inc. and created PACS. It’s a cordless phone service.
Only about 25 percent of the U.S. population can afford cellular, but 70 percent of U.S. households have cordless phones at home, said Drew Hart, 21st Century’s chief executive officer.
“We don’t visualize competing with cellular. The market we want is the people who deserve portability in the places they live-the yard, the malls, fast-food restaurants, Wal-Mart, the grocery store. Probably people who make $25,000 a year and have two weeks of vacation,” Hart said.
DECT has been deployed in Europe and is used by mid-and large-size businesses as desk-phone extensions. According to DECT supporters such as the DECT Forum and the DECT Operators Group, about two dozen countries support DECT.
Most recently, Ericsson was building a test DECT system in Indonesia. It also is testing a dual-mode phone in Sweden, which operates on DECT and Global System for Mobile communications, the European high-tier standard. With a DECT/GSM phone, users could use the phone both in private, office systems and the high-tier, outside network.
Stockholm, Sweden-based L.M. Ericsson is the parent company of Ericsson Inc.
Proponents of low-tier systems point to the enormous success this year of PHS in Japan, where 1 million subscribers were reportedly added in one month and operators expect to have 3 million total subscribers by year’s end.
