WASHINGTON-NextWave Telecom Inc. is poised to begin a technical trial in Las Vegas of what it describes as the first F-block personal communications services network built to date. The company also has built test networks in San Diego, San Antonio and Washington, D.C., but those operations have been suspended temporarily as NextWave awaits the Federal Communications Commission’s final decision on C-block PCS financial restructuring.
The Las Vegas technical trial, scheduled to begin next month, will be used to debug the network’s design before actual beta-testing with a control group of customers and company employees can begin.
A company backgrounder described NextWave’s Las Vegas market as being within the top 50 U.S. markets, serving more than 1 million pops. NextWave, as a designated entity, was entitled to pay for the market in installments, with the first two years being interest only, and the rest of the payment plan including interest and principal.
According to NextWave spokeswoman Jennifer Walsh, the Las Vegas market is the biggest deployment of the four test beds, with a switch and associated cell sites installed in anticipation of commercial cutover sometime during the last half of 1998. NextWave’s three suspended markets were built as a showcase to allow resellers, investors and government officials to experience how the carrier’s proposed CDMA network could perform once deployed. Walsh could not detail which market NextWave will build out next, saying that announcement will be made later this year.
This system trial marks the first time San Diego-based LG Infocomm Inc.-the U.S. subsidiary of Korea’s Lucky Goldstar-will test the commercial viability of its Code Division Multiple Access infrastructure equipment in a domestic PCS market; a few CDMA handsets (manufacturer unknown at this time) will be used. NextWave employees plan to test the system in drive-time situations.
Besides providing hardware for the Las Vegas network, LG Infocomm also holds an equity position with NextWave and has provided other financial assistance. Between 30 and 40 NextWave and LG Infocomm employees have been dedicated to designing and constructing the Las Vegas system thus far.
Las Vegas has been cited as one of the fastest-growing areas in the country, and NextWave is entering a market that already is experiencing thriving wireless competition. In the cellular arena, AT&T Wireless Services Inc. and 3607 Communications Co. have been offering service since 1988 and 1986, respectively. PCS operators could include Pocket Communications Inc., which is expected to retain this market when it makes its C-block restructuring election next month; AT&T Wireless; Rivgam; Cox Enterprises; and Pacific Telesis. Finally, add to that mix a number of messaging and specialized mobile radio services.
The time-to-market advantage enjoyed by some of its competitors apparently is not a concern for NextWave. Price often is the deciding factor when customers choose a service, and price is what NextWave resellers may have to offer.
As a “carrier’s carrier,” commented Walsh, “we are wholesaling and not retailing minutes of use. Our customers, the resellers, don’t have a carrier’s overhead, and they can compete on price because they will be purchasing MOUs at rates below their competitors’.” Walsh could not divulge how many resellers have signed contracts to serve Las Vegas, but she did say that NextWave has 25 completed definitive agreements from resellers for local, regional and nationwide coverage. Many of these agreements include the Las Vegas area.
