found this on yahoo news. what does this mean to CAWS if it means anything to us at all
Tuesday November 12 6:34 AM EST
Wireless Revolution Arrives in U.S. Cities
NEW YORK (Reuter) - The long-heralded wireless revolution arrives in dozens of cities
across the United States Tuesday, with new tiny digital mobile phones offering clear
connections, better battery life and few dropped calls.
For consumers it means lower prices, greater choice, and new add-on features like
voice mail and paging built into the phone. For wireless firms new and old it means a
huge fight to grab and keep customers in much more competitive markets.
"Fundamentally, wireless services will get cheaper," said David Roddy, chief
telecommunications economist of Deloitte & Touche Consulting.
On Tuesday PrimeCo, a consortium of three regional Bells and AirTouch
Communications Inc. will announce its new digital Personal Communications Services
offering in a dozen cities across the country, covering 32 million people.
PrimeCo will start services in Chicago, Richmond and Norfolk in Virginia, the Texas
cities of Houston, Dallas/Fort Worth, San Antonio and Austin, New Orleans and all of
Florida.
"We are offering people a value proposition, and it will be a hassle-free experience,"
said PrimeCo spokesman Reg Rowe.
On Thursday Omnipoint Corp. will announce its own PCS service in metropolitan New
York, fighting existing cellular providers AT&T Corp., and merger partners Bell Atlantic
Corp. and NYNEX Corp.
Eventually, Omnipoint will cover broad areas in the Northeast, where 40 million people
live.
PCS refers to systems using licenses auctioned by the Federal Communications
Commission in 1995. Two or three PCS providers will enter every city in the next three
years to compete with two existing cellular service companies.
"We're already starting to spot bare bones pricing as companies vie for market
share," Roddy said.
Building PCS networks across the country will cost at least $30 billion, and new
entrants have to grab customers quickly, even at a loss, to get cash flowing in to start
paying the interest charges. Bondholders will be watching closely.
"In some areas it could turn into a bloodbath. It's difficult to find a business plan that
says five carriers can serve a given market and make money," Roddy said.
He said that the costs of marketing would be an additional burden, with advertising
blitzes to explain and promote what is a fairly complex product.
"They are going to need plenty of well-known actors who say 'trust us'," he said.
Comparing price is tough because of the variables of phone cost, monthly cost, per
minute airtime and so on, but scales are expected to be similar to that offered by
American Personal Communications, an affiliate of Sprint Corp.
APC offers customers in the Washington DC/Baltimore area phones for between
$150-$200, a $15-a-month flat fee with 15 minutes free and a 31-cent-per-minute call
charge.
Cellular's old pricing structure of year-long contracts, free phones but pricy airtime is
changing.
"Nobody's doing contracts anymore, and one-cent phones are on their way out," said
an Omnipoint spokesman.
APC's PCS service launched in November 1995 was the first in the country,
undercutting cellular rivals by 30 percent.
In the first seven months of operation, APC gathered over 100,000 customers, many
of them new to wireless. But as cellular rivals cut prices too, they also drew in extra
customers, showing the depth of the potential marketplace.
Cellular providers are now upgrading their services too.
AT&T in October launched its Digital PCS, which is not based on PCS license
frequencies but does offer similar features. These include call waiting,
voicemail-to-pager, and the benefits of doubled battery life and small handset size.
"About a third of our new customers signing on nationally are choosing Digital PCS,"
said AT&T vice president Jane O'Donaghue, in the first hint of how the campaign is
going.
The cost is $25 per month with 30 minutes of free airtime and a phone costing
between $150 and $250.
Confusingly, AT&T will start offerings its real PCS service next year. While it currently
covers 76 million people with Digital PCS, its real PCS network when complete in
1998 will give virtually complete national coverage, reaching 212 million customers.
PrimeCo, which includes Bell Atlantic, NYNEX and U S West as well as AirTouch, has
a special feature in its phones for customers who want to avoid running up big bills.
Customers can set a maximum monthly bill, and the phone will alert them when they
near that figure.
"'First bill shock' has been a problem with cellular phones," said PrimeCo's Rowe.
Wireless companies will find niches to avoid head-on pricing, with some concentrating
on the mobile professional, and others on pre-paid wireless calling.
Nevertheless, with crowded markets, consumers will have to sit down and work out
which is the best value of all the offerings available.
"Its going to be a pretty confusing marketplace," said Roddy.
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