ORLANDO, Fla.-To paraphrase a Bell Atlantic commercial, “wild things are happening” in dispatch radio, according to speakers at the recent PCS ’98 show.
Just outside the spotlight, which is focused on the apparent dominance of Nextel Communications Inc. and the demise of Geotek Communications Inc., a number of players are making significant strategic moves in this sector of the wireless arena.
Nextel clearly is far and away the market leader, with 2.6 million domestic subscribers this year so far, said Alan R. Shark, chief executive officer of the American Mobile Telecommunications Association, Washington, D.C. The rest of the industry accounts for another 2.3 million subscribers to date in 1998.
At the end of 1996, the total number of dispatch radio customers was 2.1 million, “and there was double-digit growth for the prior eight years,” Shark said.
Geotek, which along with Nextel developed enhanced specialized mobile radio technology, “has a nifty offering, a slick application in automotive vehicle location,” said John Reardon, general counsel and secretary of Mobex, Washington, D.C. Mobex has 55,000 customers in 30 markets worldwide and also has built turnkey operations for 400 other companies here and abroad. The privately held company plans to go public soon.
“But it’s a huge responsibility to be the manufacturer, the applications developer and the operator, so the lesson is don’t be all things to yourself.”
Geotek’s services “are quite expensive, and there possibly are too many advanced features for user needs,” said David Burmester, manager of marketing for Comcast Cellular.
Geotek’s problems, which have led it to bankruptcy reorganization, didn’t happen as the result of Nextel’s success. Rather, they had more to do with all-too-common start-up problems and insufficient capital, said AMTA’s Shark.
“I’m not sure anyone is eating anybody. With 20-percent penetration in the (total) wireless market, all parties are still alive and thriving,” he said. “But the question is [whether] dispatch can survive as a stand-alone service or will it be integrated into other wireless offerings, like Comcast’s.”
Comcast Cellular, headquartered in Wayne, Pa., began offering its GroupTalk dispatch service using Time Division Multiple Access technology in 1996, Burmester said.
“When Nextel … came on the market, they said it would be the be-all and end-all of wireless communications. But in the focus groups we’ve had, 85 (percent) to 90 percent of (Nextel’s) DirectConnect customers are using their cellular phones to make outbound and (get) inbound calls,” he said. “Most people don’t use its voice mail, pager and cellular … functions because they don’t like the way they work.”
GroupTalk also allows Comcast Cellular to converge cellular telephony and two-way radio into a single device, “which opens up the possibility to use any manufacturer-(L.M.) Ericsson, Nokia (Corp.), Motorola (Inc.), just to name a few.”
Unlike Nextel’s service, GroupTalk also permits four-digit dialing within work groups, eliminating the need for completely different numbers for dispatch, Burmester said. There are no extra charges for users calling back into its dispatch service.
“You can make any touch-tone phone your dispatch send phone. No special base station or cell phone use is required, unlike with Nextel,” he said.
In Canada, Bell Mobility’s conferencing service competes very well with Clearnet Inc.’s (integrated Digital Enhanced Network) service, said Tim Wrona, director of product development for Frontier Cellular, Rochester, N.Y.
“Up and coming is the integration of [specialized mobile radio] with other services … automatic call return from voice mail, voice navigation of voice mail, text-to-speech e-mail retrieval and preprogrammed information services.”
Vendor advancements
Also on the near horizon are technology advancements that promise to enhance the capabilities of cellular and enhanced specialized mobile radio operators in offering dispatch services.
For wireless telephony carriers, the most important new development related to dispatch technology is underway at Ericsson Inc., said Timothy O’Neil, an analyst with SoundView Financial Group, Stamford, Conn.
By the second quarter of next year, Ericsson expects to have commercially available “ruggedized phones” for both Digital Advanced Mobile Phone Service (Interim Standard 136) and Global System for Mobile communications, said Kirstin Laux, manager of GSM marketing solutions for Ericsson’s Wireless Communications Division, Richardson, Texas. The phones will be slightly larger than regular cellular phones, have a hard covering as well as speaker and push-to-talk capabilities.
These will work with new D-AMPS Pro and GSM Pro servers, which help route calls and employ software for group calls to “provide mobile radio functionality, (like) conference calls and push-to-talk,” she said.
The D-AMPS Pro server will be available later this year in the United States, with the GSM Pro server available in second-quarter 1999. Although the D-AMPS ruggedized handsets won’t be available until next year, cellular operators can offer simulated dispatch service with existing phones, according to Ericsson. The servers are vendor-independent, thus they do not have to be used with Ericsson’s infrastructure or phones.
Spectrum constraints, solutions
For SMR carriers, spectrum-capacity constraints pose perhaps the greatest challenge to expansion of services.
“I don’t see the [Federal Communications Commission] offering more cheap spectrum anytime soon, but I see some technological advancements for using analog more robustly that are really very exciting,” said Shark of AMTA.
“Without a government stance, there won’t be a standard, but there will be a de facto standard because of the shortage of spectrum. There are four to five manufacturers [that] will be using the [Dynamic ChannelMulti-carrier Architecture protocol] standard within two years, and that will increase capacity by six times.”
Available spectrum also is coming from other companies, said Reardon of Mobex. “We participated in the 800 MHz auction at the end of December and got creamed by Nextel, but we’ve quietly begun to obtain 900 MHz spectrum and reverse engineer it so dispatch becomes an add-on,” he said.
“We have assembled a request for proposals for the network and handsets, which will be user-friendly, very durable and competitively priced at $170-$270. Nextel’s network is built like cellular so one-to-many (communications) uses up a lot of capacity and penalizes you. Our architecture is designed for one-to-many and allows upgrades in technology, like the Wildfire voice recognition that’s coming up.
“The network will be modular (and scalable) so that, unlike iDEN, it won’t require a huge upfront capital outlay.”
Reardon noted that Motorola Inc., whose name is synonymous with iDEN technology, could well be a “front runner” in the bidding for Mobex’s new network.
Federal deregulation of power and energy utilities has provided another opportunity for Mobex-in managing companies’ radio-frequency spectrum and networks. New FCC rules allow utilities to add other utility customers to their networks. New competition in the utility sector has encouraged these companies to pare operating costs through outsourcing whenever possible, including spectrum ownership, management and upgrades, he said.
“We have just concluded a major deal with one of the largest utilities in the [United States] and will consolidate [its] paging, cellular, SMR (and) wireless data services,” Reardon said.
Whether other types of spectrum owners, such as cellular/personal communications service and SMR/ESMR carriers, also will develop strategic alliances or franchise agreements remains to be seen. “We have not explored cellular/SM
R partnerships to date because we have enough spectrum to handle our requirements,” said Comcast’s Burmester.
Reardon said
Mobex examined the idea of reselling cellular services a few years ago and decided then it was premature. “We’re now `re-looking’ at reselling cellular.”
