The introduction of new digital cellular and personal communications services standards in the United States and global markets has brought to bear the issue of multimode and multiband wireless handsets.
Shying away from the continuing and unproductive debate between the proponents of various digital standards, one has to realize that the multiplicity of standards is a matter of fact and that the development of multimode and/or multiband wireless handsets is unavoidable.
The question is: What are the critical factors driving this trend and what are the pros and cons of the next generation of handsets?
Issues around multimode and multiband wireless handsets are centered around several factors.
Carrier concerns
For wireless operators they include:
Customer demand, particularly travelers who use roaming services.
Interoperability between existing and future network buildouts.
Ubiquity of wireless service throughout the footprint.
Subsidy cost of multimode/band phones.
Simplicity and ease of use of wireless communications.
Vendor vexations
Critical factors for wireless manufacturers include;
Current and future technical feasibility.
Research and development costs.
Manufacturing costs.
Shipment volume required for cost-effectiveness.
Digital standard commitment.
Timing/time-to-market.
The leading handset manufacturers serving the U.S. market have been shipping dual-mode cellular phones to support analog Advanced Mobile Phone Service and digital Time Division Multiple Access (Interim Standard -54B) networks throughout the country since the early 1990s. In 1996 and beyond, the outlook and the complexity of the market is far greater as the demand for digital phones capable of supporting any combination of standards and frequency spectrum becomes a reality.
Trends
This is not a market in which manufacturers and operators should venture blindly. The following are some of the trends and issues that should be considered:
Multimode/band phones are necessary because they will allow customers to roam from one network to another without losing service. They are essentially a fix to the plurality of standards. This is particularly important to travelers who need seamless and ubiquitous service as they move from one city to another or one country to another. The underlying assumption is that network operators will have roaming agreements between them to compensate for the initial coverage “holes” in their markets and offer roaming outside their markets.
Multimode/band phones will be necessary to avoid customer confusion. Confusing the customer with technical jargon is the last thing operators and handset vendors want to do in a market where the trend is definitely towards simplicity of use and all-in-one communications. The bottom line is that customers do not care what digital standard is being used so long as the price is right, voice quality is acceptable and the phone’s features make life easier.
Multimode/band handsets are likely to be more expensive than current cellular/PCS phones because they require components capable of operating according to the specifications of the standards and frequency bands supported by the phone to be integrated. This is a critical issue for handset manufacturers because they need to determine which combination of standards and frequencies are likely to be in high demand and lead to economies of scale. The issue also is important to operators that will have to subsidize some of the cost.
Safe bets
A safe bet at this point is to focus on dual-mode/band phones that can support AMPS and one of the digital standards (TDMA, Code Division Multiple Access, or Global System for Mobile communications). These types of phones are either already being offered or developed, and will reach volume shipment in 1997. In the longer run, multimode/band handsets will be offered, particularly to address the need for global personal communications. This claim is validated by members of the GSM MoU Association, which recently announced plans to develop multiband handsets capable of working in the 900 MHz, 1800 MHz and 1900 MHz frequency bands. These phones are expected to hit the market by 1999.
In the near future, hardware-based processing in multimode/band wireless handsets will be replaced by software-based processing. This would eventually lead to much more design flexibility and lower development and manufacturing costs for the phones.
A trend that will limit the need for multimode/band phones is the development of software-based broadband processing of radio signals. This technology will essentially shift some or all the intelligence of handsets to the base station.
Third generation
Despite several delays, the International Telecommunications Union is still working on the development of the Universal Mobile Telecommunications System (UMTS), a third generation mobile communications standard that will unify the existing digital technologies. Although work on UMTS will not be completed for several years, the current multimode/band offerings and development will contribute greatly to the specification of UMTS, and vice-versa.
An unresolved issue is that of the costs of migrating from existing technologies to a third generation digital technology. Obviously, this is not the most pressing issue in the mind of current PCS operators that are concentrating on building their networks and developing business plans that will allow them to be competitive and perhaps profitable down the line. Nevertheless, the migration issue is probably more real for those operators that have selected GSM because of its time-to-market advantage, but plan to migrate to other standards such as CDMA once it is available.
Standards diversity makes for good competition in the wireless market, each standard brings to the market different service features, infrastructure cost structures and product readiness. It also generates the need for a new generation of wireless handsets capable of addressing the strict critical issues of network operators and handset manufacturers, while meeting the needs of the mobile end-user.
Having established that multimode/band wireless handsets are a necessity in the current wireless environment, one thing is clear: The underlying issues facing operators and manufacturers are complex but we will have a better picture of the market in the coming months as the players position their products and services.
Bukasa Tshilombo is research manager for world wireless markets at Northern Business Information, New York.
