Although much attention has been focused on the network transitions and upgrades of national carriers, many regional operators around the country also are deciding how to implement new technologies and whether to spend money to upgrade infrastructure.
Those technology decisions are typically driven by the technology choices of their major roaming partners, be it the CDMA path or GSM path. A number of carriers are in the midst of the same transitions that larger carriers are experiencing: migrating customers from TDMA to GSM technology, or trying to decide at what point they should upgrade to the latest technology.
Some small carriers, however, are worried that they’ll be left out of data roaming agreements with large carriers even if they do end up deploying 3G networks.
Tom Walsh, general manager of CDMA carrier Illinois Valley Cellular and a board member of the Rural Cellular Association, said that for smaller carriers, the expense of a network upgrade is a challenge because it has to be spread out over a much smaller customer base. And even if companies are eager to hop onto a new technology bandwagon, he added, vendors tend to focus on provisioning the largest carriers first.
Walsh’s company is transitioning customers from analog and TDMA to CDMA; its major roaming partners are Verizon Wireless, Sprint Nextel Corp. and U.S. Cellular. Usage on the analog and TDMA networks is “extremely low,” he said, adding that the federal mandate on providing enhanced 911 capabilities was a big motivator for his company and other small carriers.
Illinois Valley is putting in a new switch and could begin installing CDMA2000 1x EV-DO technology by 2007 to enable high-speed data roaming. Still, Walsh said, there are some technology upgrades, such as walkie-talkie capabilities, that he said he prefers “to sit on the sidelines and let certain things play out to see if it truly is something we need to invest in.” When Illinois Valley Cellular, which serves north-central Illinois, first looked at the technology about a year-and-a-half ago, he said, the expense was large and the company decided to hold off. Now, it’s re-examining the feature because the cost has come down, the technology has improved and customers are showing more interest.
The big carriers’ buildout can also affect the timing of when small carriers decide to do a network upgrade. In the case of Golden State Cellular, a small carrier that serves northern California, the company had looked at upgrading its network to EV-DO this year. Then it found out that Verizon Wireless, which serves adjacent territory and is Golden State’s largest roaming partner, wasn’t going to launch the technology in the area in the same time frame.
“We decided to postpone it a year,” said Dan Rule, general manager for Golden State. He said that until Verizon Wireless put EV-DO in place, Golden State would essentially be “an EV-DO island. It doesn’t make much sense.”
Still, some small carriers fear that they may be cut out of data roaming even if their networks are state-of-the-art, according to RCA General Manager Tim Raven.
With carrier consolidation, Raven noted, it’s possible for national carriers with a couple of roaming agreements to “create a national footprint with very small, tiny white spots”-and they might not think it worthwhile to fill those holes with roaming deals with small carriers.
“There seems to be an increasing sense within the industry that as we get into the broadband services, the large carriers are going to look more to maintain their own footprint, and at best roaming with one or two other major, national carriers … where the small guy is not allowed,” Raven said-although he added that RCA has no concrete examples of such exclusion. Still, the association has been lobbying for automatic roaming agreements in order to avoid the possibility.
“With just voice, the market dynamics have been pretty stable, pretty predictable,” Raven said. “What we’re seeing now is, with the evolution into broadband services, the market situation is changing as well. As the big guys expand their footprints, the old dynamics are no longer necessary.”
Along with worries about new technology, Raven said, carriers in very remote areas are likely to continue running their analog networks because customers simply don’t want to give up the service.
“You will probably have to bring them kicking and screaming into the local wireless company to change out their handset,” he said-or, he added, customers might only switch once the analog network is turned down and they can only get digital service in their home service area.
