NEW YORK-As part of its wireless data strategy, TeleCorp PCS officially launched two-way short message service in all its markets May 18 and is offering its customers free three-month trials, Gerald T. Vento, chief executive officer and board member, said at the Lehman Brothers Inc. “Next Generation Wireless Conference”.
The Arlington, Va.-based carrier, which is AT&T Wireless Services Inc.’s largest affiliate, also has its eye on the possibilities of instant messaging in the longer term.
“AT&T cut its own (instant messaging) deal with AOL (Time Warner), but I’m not privy to their contractual relations. We also have had our own independent discussions with AOL. With Tritel (PCS), TeleCorp will have 27 of the top 100 markets. As in all cases of leverage, this will give us more,” Vento said.
“At the time of the C-block auctions and what was then the imminent 700 MHz auctions, AOL was looking for its own path to bypass wireless carriers, essentially by creating its own network. I don’t think, given the spectrum situation, AOL is in the position to put together a ubiquitous network.”
Above all, wireless data services like instant messaging, mobile commerce and interactive games will require extensive and reliable coverage since people are much more forgiving of dropped voice calls than they are of lost data transmissions, Vento said. TeleCorp, which has a dropped call rate of eight-tenths of a percent, is spending $550 million this year to add 1,000 cell sites.
At the end of March, TeleCorp’s network covered 80 percent of its licensed population, and it offered service in 74 of its 76 licensed markets. In May, it began commercial service in Milwaukee and several Iowa cities, including Des Moines.
“You get bragging rights when you launch 74 markets and you have AT&T’s globe (logo), but the people who call us are calling SunCom. We didn’t want to be held hostage to AT&T when brand negotiations come up down the road. We are in discussions with Dobson (Communications) about their use of the SunCom brand,” Vento said.
TeleCorp, whose markets abut those of AT&T Wireless, also has signed a 20-year roaming agreement that “protects our roaming revenues,” he added. Although the price AT&T Wireless pays TeleCorp dropped by 25 percent during the first quarter, the affiliate experienced a 23-percent increase in roaming revenues.
Giving customers the ability to roam while retaining advanced features also is an important part of TeleCorp’s data strategy.
“We are moving cautiously with GPRS. When AT&T Wireless starts covering big markets like Houston, Atlanta, Chicago, Detroit and St. Louis, we plan to leverage their core network and convergent billing systems,” Vento said.
“We’ll use them as a service bureau of sorts. There’s no need for us to spend right away. In 2002, when AT&T has some of its major markets covered, we’ll move rapidly.”
The chief executive said TeleCorp “is fully financed for data,” with the $200 million it anticipates needing for a GSM/GPRS upgrade already on hand. This will cost about $15-$25 per covered pop in larger markets like Nashville, Tenn., and New Orleans.
“We also want availability of the GAIT phone (for GSM/TDMA roaming), and I don’t expect to see any until the first quarter of 2002 or in great quantities later that year.”
TeleCorp PCS also is clearing out the clutter, Vento said.
“So many wireless carriers are adding more and more minutes to bucket plans. It’s too confusing. The industry is getting too gimmicky. Our plans don’t just dump more garbage into the bucket,” he said.
“We’re not very competitive under $40 (per month). Our sweet spot has always been the consumer who wants to use a lot of digital wireless in a large regional area.”
The AT&T affiliate also is actively engaged in discouraging prepaid customers. By year-end, its goal is to have postpaid subscribers comprise 90 percent of its base, a 20-percentage point increase from 2000.
“We have a lot of spectrum capacity, so we are not concerned about overloading our network, and we have a lot of retail outlets. But we looked at the financial return on prepaid and have come to believe we should focus our financial and human resources on postpaid,” he said.
