LIVINGSTON, N.J.-Personal communications services providers will face competition from established cellular phone companies, a trend that has already caused one PCS phone vendor to declare bankruptcy. The Insight Research Corp. in its new report predicts that trend will continue.
PCS vendors will be burdened with high fixed costs and a heavy load of debt, and several PCS vendors will be driven from the marketplace, said the report, The Reality of PCS Networking: The Competitive Threat to Cellular Telephony.
According to the report, PCS has the advantages of excellent building penetration, security and voice and data capabilities. However, many PCS services are being offered below cost to attract customers, while established cellular carriers are doing all they can to diminish the differences between PCS and cellular to potential customers.
“PCS has some real advantages in terms of security, voice, fidelity and built-in messaging capability, and we think it’s going to be a must for the businessperson who needs to keep private those crucial business discussions,” said Robert Rosenberg, president of Insight Research. “But you can’t run a business for very long by selling at below cost-and cellular vendors can drop prices faster and further than PCS vendors-so some of these PCS people will be dreading the knock on the door from their bankers.”
