Network coverage is the unexciting side of the wireless industry. Sure, most carriers proclaim to have excellent coverage in their markets, but real-world results are often lacking. Someone in the wireless industry recently discussed a conversation she tried to have with an executive of a wireless operator over their wireless phones in Washington, D.C. After having the call drop six times, both agreed to wait until they could make a landline connection before continuing the conversation.
Drive data provided from San Francisco-based Telephia Inc. shows the uneven distribution of wireless coverage in some large markets across the country. During a three-month period last fall, Telephia found blocked call performance ranging from 1.25 percent in Detroit to 3.83 percent in Houston. While those are small numbers compared with the number of calls that are successfully connected, it does show that current networks are overworked occasionally .
The most common example of capacity constraint issues revolves around AT&T Wireless and its New York market. When the carrier introduced its Digital One Rate plan a few years ago, so many people in the New York area, and nationwide, signed up for the service it quickly overloaded the network. With customers facing dropped calls or the inability to connect at all, AT&T was forced to quickly upgrade its network in the Big Apple.
“The biggest challenge for us today is capacity constraints,” said Toby Seay, vice president of field operations for AT&T Wireless. “We’re making quite a bit of progress in the capacity with tighter re-use plans and flexible channel plans.”
Seay noted that while AT&T Wireless feels good about its spectrum portfolio, a notion backed by many analysts who said AT&T has the strongest spectrum portfolio in the U.S. market, there are some areas where the carrier has less spectrum than it would like.
AT&T Wireless is not alone when it comes to network coverage. Other carriers have faced similar situations in other large cities, with Los Angeles, San Francisco, Chicago and Washington most often cited as tough cities for wireless networks.
“Of course, New York City has inherent problems due to the propagation of office buildings,” said Elliot Hamilton, senior vice president and director of global wireless for the Strategis Group. “Usually flatter markets are easier on coverage.”
The most surprising finding from the Telephia data is that both Los Angeles, with a 1.64-percent blocked call performance, and New York, with a 2.06-percent blocked call performance, came in well below Houston. Conventional wisdom would suggest Los Angeles, with its rapidly growing population base and uneven topography, as well as New York’s dense population base and skyscraper propensity, would score worse than Houston’s rather flat profile.
Even in the face of continued economic trouble, wireless operators are aware of such constraints and have spent billions of dollars trying to improve their networks. Verizon Wireless, the nation’s largest operator, said it would spend $4 billion this year alone upgrading its networks.
“We constantly invest in our networks year after year,” said Andrea Linskey, spokeswoman for Verizon Wireless. “The investments are not a response to any problems, but are standard operating procedure.”
Verizon Wireless has even gone so far as to wire New York City’s subway routes with antenna wires, allowing customers access to service while underground.
Sprint PCS, the country’s largest personal communications services operator, said it will spend more than $3 billion this year on improving its network, and recently announced $2 billion of deals with Lucent Technologies Inc. and Nortel Networks to improve coverage and prepare its network for next-generation services. Sprint plans to add 3,000 sites during this year, and an additional 3,000 sites next year to its network.
For Cingular Wireless, network coverage issues come down to three challenges-capacity constraints, improving coverage and quality in areas already served, and expanding its footprint.
“What we have is a very detailed engineering and capital guideline to justify the expense in adding to our network,” said Keith Radousky, executive director of engineering for Cingular Wireless.
For capacity issues, Radousky said Cingular adds channels to existing base stations, which allows more efficient use of spectrum. “But obviously, you eventually run into a capacity issue where you have to build a new site,” Radousky added.
Capacity problems were highlighted during the re-auction of PCS licenses earlier this year. The three 10-megahertz licenses for the Big Apple drew nearly half the total bids in the auction, with Verizon Wireless spending more than $4 billion to up its previous 25 megahertz of spectrum to the regulatory limit of 45 megahertz. AT&T Wireless, through its partnership with Alaska Native Wireless, picked up the remaining 10-megahertz license for $1.4 billion.
Unfortunately for the wireless carriers looking to fill in holes with the FCC auction, an appeals court ruled the FCC illegally revoked the licenses for the auction from NextWave Telecom, which had won the licenses during the original auction in 1996.
“Regardless of where they are now, in the future, carriers will begin to run out of spectrum capacity,” explained Rachel Obstler, director of products for Metawave Communications Corp. Metawave provides antenna solutions for wireless carriers designed to increase capacity, and recently signed an agreement with Verizon Wireless to supply its suite of smart-antenna solutions to help the carrier maximize network capacity.
If operators are not able to access new spectrum, some analysts feel carriers will have to slow down their plans to roll out new services or attract new customers.
“There will be somewhat of a slowdown,” said Frank Marsala, vice president of wireless research at Robertson Stephens. “In New York and Los Angeles, Verizon, for example, only has 25 megahertz of spectrum. They may have to look at putting some of their expansion plans on hold.”
While carriers continue to push the envelope concerning advanced features on their networks, they know that if a customer can’t get onto the network in the first place, those potentially lucrative services could prove pointless.
