Editor’s Note: In a year where the largest stories of the wireless industry were about personal communications services carriers besieged with financial and other problems, one PCS company, Omnipoint Communications Services Inc., has managed to bring to reality the promises of PCS. Omnipoint, a new player in the wireless telecom industry, managed a successful initial public offering, built a network, turned on service and signed up paying customers. As such, RCR pays tribute to Omnipoint President George Schmitt, for leading the company’s efforts.
NEW YORK-George Schmitt, president of Omnipoint Communications Services Inc., really does own a parrot. In a double play on words in the wireless industry, it’s a macaw named Omni.
Which came first-the ad campaign or the egg? The advertising mascot idea was hatched before Omni, a staff gift that emerged late last year, just as Omnipoint was making its entrance into the New York City area.
While the raucous Omni leads a life of leisure in the kitchen of the Schmitts’ suburban New Jersey home, his working double has done far more than make a name for himself. He has established the identity of the new personal communications services carrier, which entered as an unknown a year ago in a market with some of the most familiar telecommunications players in the industry.
“Frankly, of all the things that have been easy that we thought would be hard, we thought it would be difficult to get the Omnipoint brand known in New York City. But most New Yorkers can remember Omnipoint,” Schmitt said.
Since imitation is the sincerest form of flattery, it is telling to note that Bell Atlantic Corp. now runs TV ads featuring a macaw to publicize its wireline business.
In mid-December, Sprint Spectrum L.P. began an advertising campaign in the New York City area introducing prepaid wireless calling.
“Prepaid customers have been a godsend to us for a long time now,” Schmitt commented. “Bell Atlantic and Sprint haven’t pushed it, and they penalize their prepaid customers.”
To the surprise of Omnipoint, its prepaid customers as often as not are people from Asian, Eastern European and other foreign countries who use their service as much as post-paid customers and have sufficient financial resources but are conservative about using credit, Schmitt said. For such customers, the wireless handset often is their only phone, he said.
At the insistence of Douglas G. Smith, chief executive officer of Omnipoint Corp., Omnipoint Communications’ parent, the PCS carrier invested substantial sums on its technical systems, including those for customer care and billing, Schmitt said. These allow the carrier to track customer behavior and to “figure out” competitor behavior. They also enable Omnipoint to alert customers to features and packages that might interest them. While prepaid customers are tougher to track, Omnipoint notifies them via short messages to their handsets.
“For a little mouse, we’ve grown up a lot,” Schmitt said, then corrected himself. “I have to remember, we’re not such a small company anymore.”
The publicly traded Omnipoint, which had 80,000 customers at the close of its third quarter Sept. 30, is the fourth-largest personal communications services carrier in the United States in terms of its footprint, which covers 96.5 million people.
It has grown to a company with more than 1,000 employees today from just three employees two years ago and likely will double its staffing levels by the end of 1998.
“I tell my human resources people to hire three people a day every day of the week or we’ll fall behind,” Schmitt said.
Unlike a number of other wireless carriers, Omnipoint doesn’t have a big telephone company behind it from which to borrow experts in different aspects of the business. One of the most difficult recruitment problems for many carriers has been finding enough qualified radio-frequency engineers.
“We decided to hire people right out of universities. We probably have one of the youngest RF engineering staffs in the United States, and we have enough to satisfy our needs.
“They are well-educated, although some days they give Gary and me a little more gray hair.”
Gary is Gary Cuccio, vice president of the PCS carrier and the executive in charge of operations. “There’s no way on earth I’d survive without Gary,” Schmitt said.
Schmitt, who rises each day at 5 a.m. and whose wireless phone rings at all hours, focuses his energies these days on two major tasks: raising capital and raising a ruckus.
“I’ve been overseas quite a bit lately to meet with potential investors in our business, and I’ve been working on refinancing (of debt) to take advantage of low interest rates,” he said.
Closer to home, Schmitt is engaged in major battles on several fronts. The issue of calling party pays is a priority.
“I make a lot of noise about calling party pays. The only impediment is that [local exchange carriers] would have to bill for it on local phone bills. Southwestern Bell and the northern part of Bell Atlantic have told me to poke myself in the eye with a sharp stick.
“I don’t believe (LECs) should be penalized … but we may have to sue them. Hopefully, the [Federal Communications Commission] will resolve it.”
Schmitt swears by Signaling System 7, a modern out-of-band signaling system that will facilitate calling party pays by allowing the wireless carrier’s network to tell the incoming caller how much the call will cost before it goes through.
“I won’t bring in any product that isn’t compatible with out-of-band signaling,” Schmitt said.
The SS7 system also has enabled Omnipoint to contract with Teltrust Inc., a Salt Lake City provider of directory assistance. Teltrust, which signed a two-year contract with Omnipoint in late September, said it offers a continually updated national database and uses various proprietary search methods to retrieve appropriate numbers.
Although Schmitt hasn’t used Teltrust’s directory assistance service on his Omnipoint phone, he said Omnipoint contracted with the company because it enables the carrier to offer more thorough directory assistance searches at cheaper rates than landline telephone companies offer.
“The Teltrust contract is an example of little companies networking so they can act like big companies,” he said. “If you do it right, you can have the same equipment as the big carriers.”
In the near future, Omnipoint also expects to be able to offer operator-assisted call completion, another feature that wouldn’t be possible without the SS7 system, he said.
Designating special area codes for wireless communications is another important near-term goal, one Schmitt said he thinks will be resolved in 1998.
“Eighteen months ago, everyone said we were nuts. The rest of the world figured out wireless overlay area codes a long time ago. It would stop the splitting of area codes that’s going on now.”
Within the wireless industry, Schmitt speaks with missionary zeal about the need for carriers to forsake their sleazy used-car salesman image by offering customers credible pricing.
“We’ve hung in there so far with our no-fine-print promise,” he said. “People know there’s no such thing as free minutes. We need to clean up our industry so non-users will stop saying, `I don’t trust them.’ We have to stop doing this or [the United States] will never match the rest of the world.”
In wireless, it is often said, coverage is king. Omnipoint has had its fair share of cell siting hassles. To get over objections, the carrier has placed its transceivers inside gargoyles on the facades of landmark buildings in Manhattan and inside a lighthouse on the New Jersey shore.
There still are some tough nuts to crack, however. Omnipoint gained the approval of more than two dozen individual state agencies in New Jersey for cell siting along interstate highways. But New Jersey Gov. Christine Todd Whitman, “changed her mind because of a political backlash
,” Schmitt said.
Omnipoint finds itself between the proverbial rock and a hard place, between the need for those sites and the risk of taking on a governor who was just re-elected to a four-year term, he said.
In Suffolk County, on the east end of Long Island, which borders New York City, public-safety agencies are a stumbling block.
“We have started to turn on about 20 base stations in Suffolk in spite of the interference it will cause them. They are outside their range. We have made sure with the FCC that all is correct with us.
“If you ask me, `What do you get paid for?’-this is it. We don’t want to interfere with public safety. And if there is a problem with it, we probably will get blamed, even if it’s not largely our fault.”
A similar problem was resolved in Nassau County, which is located between New York City and Suffolk County. Schmitt said he hopes Nassau is a model for Suffolk.
Asked about regrets in hindsight, he blamed himself alone for Omnipoint’s failure to have its network in place in Nassau County before it launched commercial service in New York City. A substantial number of the automobile commuters into Manhattan come from Nassau County.
The New York City launch during Christmas season a year ago was itself a bit of the cart before the horse because coverage was spotty at best, even within the city limits back then, Schmitt said. The reasons for this premature debut are based on whimsy and money.
“If I had to do New York over again, I would have waited. The biggest part of the decision was the damned launch party, which went from a few hundred people to more than a thousand. I misjudged how many friends my board members have.
“So many resources were committed to the party that we had to go forward. It was paid for by our vendors, which means we’re paying for it. But the problem in New York is that you can’t just have a launch party and then have nothing to sell.”
From this experience comes a New Year’s resolution for 1998. No full-scale commercial service launch until everything is set to go. That will be the case when Omnipoint launches commercial service during the first quarter in Boston and Miami, Schmitt said.
There is one other promise Omnipoint’s president must keep in 1998-taking a long-deferred vacation.
