NEW YORK-It has been said that where you stand depends on where you sit. And so it was earlier this month when representatives of four wireless carriers and four equipment vendors offered their views at a BT Alex. Brown forum on the interplay between services and technologies in driving revenues.
“TDMA does not stand for `too many damned acronyms’… Technologies are difficult to compare because performance depends on factors like terrain,” said Blair Kutrow, director of product development for Vanguard Cellular Systems Inc., Greensboro, N.C.
Vanguard plans an “aggressive conversion” from analog cellular to Time Division Multiple Access because digital technology-introduced late last year in its Pennsylvania markets-allows the packaging of more minutes into price plans.
“Digital changes the way customers view wireless… (which is) evolving from one-way to two-way as people leave their phones on. Today, wireless is about 5 percent of total telecom minutes. By 2002, it will be about 18 percent,” she said.
TDMA/Advanced Mobile Phone Service, now 50 percent of the market, will comprise about a third of a larger market in 2002, she added.
“One of the unique features of TDMA is its hierarchical cell structure, which allows us to combine coverage and capacity for different rate plans,” she said.
Jeffrey L. Hines, senior telecommunications analyst for BT Alex. Brown, said that TDMA’s hierarchical cell structure is a bit ahead of the curve in its applicability for office use without a private branch exchange.
This quality is “a great churn reducer” for business customers, Kutrow said.
Besides lowered prices and ongoing technology advances for better and more features, “the key thing this country needs is calling party pays,” Kutrow said.
“Today, about 10 to 15 percent of minutes are incoming. In Europe (where there is calling party pays), the percentage is much higher.”
Advances in battery life, “which we have nothing to do with,” are one of the most important drivers of wireless usage, said Robert Blumenthal, director of product development for Clearnet Inc., Scarborough, Ontario. Clearnet provides specialized mobile radio, enhanced SMR using integrated Enhanced Digital Network technology and personal communications services using Code Division Multiple Access technology.
Blumenthal said billing to the nearest second, United States roaming at Canadian rates and “100-percent digital circuit data without a modem,” have been big drivers of usage for Mike, Clearnet’s iDEN service. It now is offered in the urban areas of Ontario and Quebec, and will be introduced later this year in the Vancouver, British Columbia, area.
One of the “feature hooks” for Mike iDEN service is a “direct connect wide area intercom” for companies within an industry sector. “It gets to the point where a business cannot afford not to be in on this, to be without a direct connection to its business partners,” he said.
Mike iDEN service is positioned as PCS for businesses. On the consumer side, Clearnet’s PCS is atypically, “focused on offering 20 percent of features to 80 percent of customers,” Blumenthal said.
As with its business-targeted iDEN service, Clearnet’s strategy is to provide features and incentives to alter user behavior toward greater wireless usage.
Canada’s regulatory environment, which favors AMPS-PCS interconnection, also has helped Clearnet’s new PCS services broaden their reach geographically. “About 25 percent of our subscriber base is outside our service territory,” he said.
AirTouch Communications Inc., San Francisco, a multinational, multimodal, multitechnology wireless carrier, operates under two guiding principals, according to F. Craig Farrill, vice president for strategic technology.
“The killer [application] for wireless is voice … our firm belief is that all digital platforms will deliver [third-generation wireless],” he said.
By 2007, it is possible, he said, that 25 percent to 30 percent of total telecommunications minutes will be wireless, an increase of 500 percent to 600 percent over current figures. Quality improvements and cost declines are major contributing factors to this trend.
There will be new services, like “digital telephone plus messaging, making it easy to deliver data, which isn’t the case today,” Farrill said.
“Wireless information services are different from data because they get you the information clearly. It would be a shame to reinvent laptop computers and [personal digital assistants] when all that’s needed is a radio link.”
David Lowry, vice president of engineering and operations for Aerial Communications Inc., a Chicago-based PCS carrier, said he makes a distinction between wireless and mobile data. The latter will bring location-based information services to people on the move via their handheld devices.
“Wireless data is for the heavy user who needs equal access and bandwidth in the wired and wireless world. We can support mobile data with current technology and can make significant inroads into wireless data with 3G.”
Prepaid and roaming services are two other significant revenue enhancements Aerial seeks to exploit, Lowry said. Transparent roaming is in place in North America through the GSM North America Alliance, and it will be expanded into the international arena this year.
“CAMEL, customized applications for mobile enhanced logic, that give you the same features as you travel around the world, should be introduced in 1999,” Lowry said.
In the Code Division Multiple Access technology camp, Anil Kripalani, vice president of global standards planning for Qualcomm Inc., San Diego, offered this assessment: “The [Interim Standard] 41 [Mobile Application Part] standard provides us with the opportunity, not yet exploited, to support roaming around the world.”
Ever faster data speeds will drive the tandem growth in wireless data to accompany wireless voice communications, said Jyrki Salo, president of Nokia Corp., Irving, Texas.
“Over Christmas, each of the 2.5 million (wireless phone) users in Finland sent two short messages at a cost of about 20 cents each … so, the payback on that application is a matter of days.”
Salo concurred with Vanguard’s Kutrow that the introduction of calling party pays and airtime pricing comparable to landline telecommunications are necessary to drive wireless usage.
Robert Stozek, director of product management for the Motorola Inc.’s Cellular Infrastructure Group, Arlington Heights, Ill., concurred with earlier assertions that high-speed data transport and location-based technologies for delivering customized information are among the most important revenue drivers of the future.
“Security and encryption can’t be understated. Smart card technology is important, (as is) voice recognition (because) you can’t have the impediment of the keyboard.”
Motorola, he added, is in the process of rolling out pilot products for voice recognition by wireless systems.
“By 2005, there will be a migration from the hierarchical networks of today to peer-to-peer networks,” Stozek said.
“The nature of cellular systems will change somewhat as services migrate to the edge of networks and networks change to accommodate that. Operators will provide a transmission pipe similar to the paradigm of the (personal computer).”
Per Bengtsson, vice president of investor relations for Ericsson Inc., New York, said he sees wireless services evolving rapidly during the next several years. This year is the second and last in a cycle of service differentiation, which comprises introduction of value added services, ubiquitous coverage, wireline quality reception, high-volume call capacity and reduced costs.
This year also marks a transition into a period marked by the ascendance of the Internet, the mobile office and
the convergence of telecommunications services.
Wireless will greet the new millennium by heralding in the multimedia era, with third-
generation wireless, second-generation Internet and digital video, Bengtsson said.
