Wireless Carriers Up Their Capacity
March 14, 2001 M-Commerce By Michael Cohn
Wireless carriers are building their mobile Internet services and
encouraging companies to create applications that will inspire more users
to surf the Web using their mobile phones.
At the Internet World Wireless 2001 show in February, Sprint PCS
unveiled its Application Developers Program, an educational campaign
designed to stimulate creation of innovative uses for its Wireless Web
service.
“We want to cultivate the development community and identify key
partners for Sprint PCS,” says Bryan McCann, vice president for wireless
data services at Sprint PCS. “We’ll communicate strategic information so
developers can get insights into how the networks are evolving.”
Sprint PCS plans to discuss the evolution of both the devices and the
networks, including the CDMA (code division multiple access) technology
that the company uses on its network.
“It’s really about how effective the network is and how good the
coverage is,” McCann contends. “Is it a single platform? Many of our
competitors have different networks running out there. When we deploy
a service, it immediately becomes available to all of our subscribers.”
McCann also thinks it’s important to consider the language used to write
applications. Sprint PCS supports Openwave Systems’ HDML (Handheld
Device Markup Language) gateway, as well as WML (Wireless Markup
Language), which is being used for WAP (Wireless Application Protocol)
applications. Sprint PCS is deploying a WAP-compliant server and offers
a strategic WAP migration plan for developers on its Web site.
“The advantages to WAP compliance and WML are that they’re standard,
and there are applications written in WML that will be more broadly
available than HDML,” says McCann. “HDML has some unique and
interesting capabilities. WML uses extensions to provide the same
capabilities. Those are things that developers need to know and
consider, or when they move from HDML to WML they might lose some
functionality.”
Sprint PCS plans to conduct online conference calls to educate
developers and allow them to hear what executives have to say about
application development. Sprint also has a technical support line and
publishes industry information to give guidance and support. “The most
important issue for developers is how they monetize the application,”
says McCann. The revenue models vary for Sprint PCS application
providers, but the company generally believes in revenue sharing.
Sprint PCS is upgrading its network for so-called 2.5G and 3G (third
generation) services. It hopes developers and third parties will give the
company a “wish list” of applications they would use, once given
additional bandwidth.
“We will see enhancements in financial and commerce applications,”
McCann predicts.
The CDMA network will evolve first toward CDMA200 and go to full 3G
using CDMA2000-1XRTT. Sprint hopes to boost bandwith to 5 Mbps by
2005.
The company plans to invest between $700 to $800 million to get its
network up to an initial speed of 144 Mbps, which McCann claims Sprint
will be able to achieve with a software change. He points out that Verizon
paid billions of dollars to acquire licenses in New York City alone.
“Verizon needs to deal with the merger of different companies,” says
McCann. “They also have multiple back offices they need to deal with.
On the spectrum side, if you look at what they paid for 3G spectrum in
New York alone, it’s more than what we paid for our entire spectrum in
the U.S. ... We feel very comfortable that we have enough spectrum,
given our technology, for the next 10 years.”
Verizon is going through a quiet period prior to an IPO, so it couldn’t
reveal many of its plans for building out its network. But it did respond to
some of the claims made by Sprint PCS. Like Sprint, Verizon uses CDMA
and is migrating to 1XRTT. Its Mobile Web service currently operates at
14.4 Kbps. Once it evolves to 1XRTT technology, it anticipates speeds to
increase tenfold.
“It depends on the devices,” says Verizon spokesperson Andrea Linskey,
“but with higher data speeds, we’ll have the ability to do higher-speed
file transfers and streaming video.”
Uniting the various networks now owned by Verizon won’t be a big
problem, she claims. “The nice thing is that all the partners that make up
Verizon—GTE, AirTouch, and Bell Atlantic—were all CDMA players.
There’s quite a lot of money invested in the network already, and it’s
mature.”
By moving to 1XRTT technology, Linskey believes, Verizon will achieve
greater voice capacity as well as higher-speed data. Part of this will be
accomplished with the extra spectrum that Verizon has just purchased.
“All wireless vendors need more spectrum to meet the increase in
customers for voice and data services,” she observes. “Headroom on the
capacity side is key. Certainly CDMA is the most efficient digital standard
out there as far as efficient use of spectrum. We process ten times the
amount of calls we could with TDMA [time division multiple access]. You
can add more capacity to the network, but obviously there comes a time
when you need to add more spectrum. With big buckets of minutes and
long distance roaming, the impetus is there to use your cell phone
more.”
Verizon is now operating services in 96 of the top 100 markets in the
U.S., which allows for plenty of room to roam. “Through our own network
and roaming network agreements with Alltel, we can keep customers on
the network, and it’s still cost efficient for us,” says Linskey. “I can’t say
that for a lot of carriers that are taking a bath on their one-rate plans.”
Clearly, wireless carriers are in a battle for customers and mind share,
the outcome of which will depend on their ability to increase capacity.
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