Editor’s Note: RCR Wireless News announces that Wayne Schelle has been inducted into the Wireless Hall of Fame for 2005, now in its sixth year. The Hall of Fame recognizes the efforts of those people who have made significant contributions to advance wireless telecommunications. The Hall of Fame is conducted in efforts with CTIA, the Industrial Telecommunications Association and the industry at large.
About 20 years ago, Wayne N. Schelle addressed a roomful of business types at the New Orleans Marriott on the coming age of wireless. After his speech, his wife, who’d been sitting in the audience, summed up the crowd’s response.
“I hope you know what you’re doing,” Elaine told him, “because all the people around me said, `This guy’s crazy. This isn’t going to go anywhere.’ “
As it turns out, Schelle knew exactly what he was doing. Wireless was indeed going somewhere-it would just take a while.
Schelle already had started working on his vision after taking over a friend’s family-owned paging and mobile telephone company. In 1980, he got an experimental license from the Federal Communications Commission to begin work on a cellular infrastructure that would provide services in the Baltimore/Washington, D.C., market, and four years later, his network was one of only two experimental cellular systems in the nation. While the technology was cutting edge, the business model had yet to evolve.
“We went on the air in 1984, and I remember the phones very well-they were large,” Schelle said in a telephone interview from Florida, where he and Elaine keep a winter home. “We paid something like $1,800 to Motorola for each handset and sold them for $2,600. All that did was almost cover the marketing cost. We were losing money on each phone.”
The network was a success though, and Schelle became the first chairman of Cellular One of Washington/Baltimore, providing the first non-wireline commercial cellular business in the United States. But Schelle’s attention was soon diverted, and he sold out to build new networks in other markets across the country. He founded First Cellular Group Inc., which offered wireless services in five markets in the Southeast and California. Once again, however, success somehow became monotonous, and Schelle again cashed in, selling First Cellular to McCaw Cellular Communications Inc.
It was then that Schelle realized that he, like countless others, wasn’t pleased with his cellular service.
“I had become somewhat disappointed with cellular not doing what I had hoped it would do,” he said. “There were too many dropped calls, there was too much interruption, there were a lot of frailties I was unhappy with. That’s why I decided to look for something better.”
That “something better” would have to offer better quality than existing analog service, yet be affordable to more consumers. What’s more, it would have to work on lightweight, palm-sized devices users would embrace rather than endure.
At the time, U.S. cellular technologies occupied the 800 MHz spectrum. So Schelle looked a little higher on the spectrum, in the 2 GHz range and went to work. With Elaine, he founded American Personal Communications (APC) in 1989 and was awarded the first U.S. PCS experimental license, again in the Washington/Baltimore market. Four years later, the FCC acknowledged Schelle’s vision and granted him a pioneer’s preference license, allowing APC spectrum without requiring the company to participate in the spectrum auctions of 1994 and 1995.
Schelle called the new digital technology PCS or Personal Communications Services. His son Scott was named the company’s chief executive officer, and Scott’s wife Anne acted as vice president in charge of corporate communications. Through it all, Elaine Schelle remained Wayne’s closest business partner.
APC teamed with the Sprint Telecommunications Venture (Sprint Corp. and two cable associates) and began to build a network in the Washington area. Sprint Spectrum launched in style in November 1995, with Schelle hosting a party that featured celebrities like Larry King and a performance by Jimmy Buffet and the Coral Reefer Band. Al Gore, vice president at the time, made the inaugural PCS phone call, dialing up Baltimore Mayor Kurt Schmoke.
But while Sprint Spectrum may have offered a quality mobile communications alternative at deeply discounted rates, established cellular companies had one monumental advantage-a head start of more than a decade. Carriers like Schelle’s old Cellular One had already established a solid foothold in the Washington/Baltimore market, building out networks and compiling impressive subscriber lists.
Within an 18-month period around its launch, APC acquired more than 400 base-station sites throughout its service area, securing zoning approval for 300. The rapid buildout quickly helped close the gap between the wireless dinosaurs and the new kid on the block in the nation’s capital.
“We only sold 2,500 units our first year of cellular,” said Schelle, comparing his earlier wireless experience with the launch of APC. “PCS sold 100,000 in the first year. (Sprint Spectrum) went on the air on Nov. 1-the best marketing time is the months of November and December, around the holidays-and we sold 30,000 units by the end of the year.”
The very things that made the mobile corporate giants such a threat were also vulnerabilities, said Schelle.
“We were just nimble,” Schelle said. “Most of those (competing) companies were big companies who didn’t have the need to build themselves out the way we thought we needed to. When you’re small and you’re a no-name, you need to do things in a more aggressive way.”
Sprint Spectrum was one of the nation’s fastest-growing wireless providers and one of its most respected. The company ranked No. 1 in customer satisfaction in the area in a 1997 survey by J.D. Power and Associates, beating the incumbents after just two years in business.
And then, just as he’d done twice before, Schelle lost interest. By 1998, he and Scott had resigned from APC, with Sprint PCS buying APC’s remaining interest in the company.
“I’m sort of a start-up kind of guy,” Schelle explained. “I get a lot of satisfaction starting things up and get bored quickly continuing along the same lines, doing the same things. I just get very bored doing the same old stuff.”
Since then, the Schelles have split time between their homes in Florida and Maryland, where their four grandchildren live. Wayne is a member of the board of trustees at Johns Hopkins University and Hospital and a past member of the Greater Baltimore Medical Center board of directors. He still watches the industry, although it’s from the sidelines, and son Scott is the chief operating officer at Bluefire Security Technologies, a Baltimore-based mobile software developer.
Schelle has a bachelor’s degree from Johns Hopkins and an MBA from George Washington University.
The elder Schelle is glad to see the recent flurry of mergers among carriers, saying consolidation will create more opportunities to generate revenues while providing better end-user services and prices. But when it comes to wireless, what pleases him most is the ubiquity of the mobile phone.
“I consistently marvel at just what this industry is,” Schelle said. “Everywhere you go, people have a phone in their hands-12-year-olds, 36-year-olds, 75-year-olds. It’s wonderful to bring communications to so many people at a fairly modest cost. That’s just a great thing for this country and for the world.”
Not that Schelle is resigned to being resigned, necessarily. Even at 70, the entrepreneurial fire burns, if not as vigorously as before.
“People say, `Why don’t you come back and do a new business?’ But I don’t have any new ideas. I’m not happy about it, but unfortunately, I don’t. If I did have any ideas, I’d be there,” Schelle said with only a hint of wistfulness.
“Two great ideas in a man,” he said, beginning to chuckle. “It’s not all that bad.” RCR
For a list of past inductees into the Wireless Hall of Fame, visit the Wireless Hall of Fame link under Resources at RCRNews.com.
