PALM SPRINGS, Calif.-Data holds the promise of new services and new revenues, and speakers at last week’s Rural Cellular Association conference emphasized the importance of those revenues-and the importance of small carriers not falling behind as national operators turn to ever-faster technology.
CTIA President Steve Largent reminded a session audience about the explosive growth in data revenues in the past five years, from about $200 million in 2000 to about $8.5 billion last year, and opined that the interest in full-track music downloads is a preview of what’s to come in terms of video and television viewing over wireless devices.
Ralph de la Vega, chief operating officer for Cingular Wireless L.L.C., spoke during a keynote address of his company’s launch of a high-speed UMTS/HSDPA network in 16 markets last year, and said Cingular is on track to expand the network in most major markets by the end of this year. He reiterated Cingular’s goal of turning down its analog and TDMA networks by early 2008, and was nothing if not blunt when he told the audience that the message to operators relying on doing TDMA business with Cingular beyond 2008 was, “There won’t be a whole lot of business that we’re going to do with you.”
De la Vega did note, though, that as data revenues become a larger percentage of average revenue per user, data roaming would become more important to the carrier. Last quarter, Cingular reported that about 11 percent of its ARPU came from data services, and de la Vega told the crowd that he could see data becoming as much as 25 percent of ARPU-but never overtaking voice in its importance.
He added that Cingular felt that rural communities would eventually be connected by wireless broadband and that Cingular “had many different ways in which we can partner.”
De la Vega said his company would evaluate potential partners on a case-by-case basis, examining coverage, quality of service and economic benefit. De la Vega also urged operators to be willing to put money into upgrading switches with customized application mobile enhanced logic, or CAMEL, which allows users to access services such as text messaging, prepaid roaming and data roaming.
De la Vega added that Cingular sees HSDPA as a cost-saving technology, explaining that it cost 45-percent less to produce a minute of voice with UMTS/HSDPA than with GSM, and 70-percent less to produce a kilobyte of data on the new network than with EDGE.
Kevin Beebe, Alltel Corp.’s group president of operations, had his own network news to speak of, elaborating a bit on Alltel’s newly announced roaming agreement with Sprint Nextel Corp. Part of that agreement, Beebe said, was that Alltel was committing to move its CDMA network to EV-DO Revision A and in fact to do joint Rev. A development and deployment work with Sprint Nextel.
He also said that Alltel was “patenting an interface capability that we think will be really big in terms of enabling the customer to get access to the content that they want in an easier way.”
Beebe also noted that Alltel is supporting GSM roaming for T-Mobile USA Inc. and Cingular-and expanded its agreement with Cingular and agreed to build out its GSM network in more markets. He added that Alltel hasn’t been selling GSM wireless service. However, Beebe pointed out, one of the carriers recently purchased by Alltel-First Cellular of Illinois-has been selling both GSM and CDMA wireless service to customers.
Beebe also said that Alltel was taking a pass on the upcoming wireless services spectrum auction due to the split nature of the spectrum in the 1.7 and 2.1 GHz bands and the potential expense with building a nationwide greenfield network with such spectrum. He also noted that Alltel was not in favor of the blind-bidding rules that the Federal Communications Commission plans to use for the auction.
FCC Commissioner Deborah Taylor-Tate sent a videotaped message to the assembly, noting that the FCC wants to encourage rural carriers to help with the rollout of wireless broadband. She added that “comprehensive reform” of the Universal Service Fund was needed, from its collection mechanism and administration, to creating separate funds for wireline and wireless and limiting rural areas to one carrier of last resort.
“There is no one, simple solution to the problems plaguing the fund,” Taylor-Tate said.
Tom Walsh, president of RCA, called her statement “somewhat shaded” and noted that RCA would be pressing its agenda in Washington during an upcoming lobbying session in July. Carol McDaid, RCA’s Washington advocate, said later that due to the size and complexity of the USF issue, she didn’t expect to see final action on it this year.
