Ericsson to Offer Wireless Group-Dispatch Calling (Update3)
Bloomberg News
September 23, 1998, 8:32 p.m. ET
Ericsson to Offer Wireless Group-Dispatch Calling (Update3)
(Adds AT&T's comments in 9th and 10th paragraphs.)
Orlando, Florida, Sept. 23 (Bloomberg) -- Ericsson Inc.,
aiming to compete better against Nextel Communications Inc. and
Motorola Inc., later this year will offer wireless equipment that
enables one phone call to reach several parties simultaneously.
The equipment, which also will include walkie-talkie
features, is expected to be adopted by some of the largest U.S.
wireless providers, such as AT&T Corp., SBC Communications Inc.
and BellSouth Corp., one analyst said. That will put more
pressure on Nextel, which also provides radio-dispatch services,
and Motorola, which supplies equipment to Nextel.
Nextel has been successful largely because of its walkie-
talkie-type service that allows groups of people, such as
construction workers and sales teams, to communicate while at
different locations. AT&T wants to offer similar services and
could announce a test of Ericsson's equipment as early as
tomorrow, analysts said.
''Nextel has demonstrated there's an interested segment of
the wireless market that wants dispatch capabilities,'' said
Kevin Roe, an analyst at ABN Amro. ''It's not just construction
crews.''
Nextel added 400,600 subscribers in the second quarter, more
than any other U.S. wireless company. The company now has about
2.04 million customers.
Motorola last quarter reported an 18 percent rise, to $1.37
billion, in sales of equipment for its ''iDEN'' dispatch
equipment. It was the only unit at the telephone-equipment maker
that reported an increase in revenue. Nextel is Motorola's
biggest iDEN customer.
''Because of resources and money associated with AT&T, SBC
and BellSouth, it's clearly an attack on Nextel,'' said Bob Egan,
research director for networking at Gartner Group. ''It's also an
attack on Motorola, which has enjoyed a monopoly'' for radio-
dispatch equipment.
Nextel said it doesn't expect the new Ericsson equipment to
offer as wide a range of services for groups as its own system.
AT&T declined to say whether it is testing Ericsson's new
equipment. The company said it welcomes equipment that allows it
to provide new services to customers.
''Manufacturers are doing a marvelous job developing
products to help differentiate wireless'' services, said Kenneth
Woo, an AT&T spokesman. ''Our hats are off to Ericsson for doing
that.''
SBC and BellSouth officials weren't available to comment.
'Anyone's Switch'
Callers using Stockholm-based Ericsson's new equipment will
dial a code to activate the service, which calls multiple people
at different locations. The hardware will be sold to phone
companies and located within switches that direct traffic on
phone networks.
''You could use this on anyone's switch,'' said Keith Shank,
director of strategic marketing and business development at
Ericsson, one of the largest makers of wireless phones.
The equipment is for wireless networks that use time-
division multiple access, or TDMA, digital technology. TDMA is
one of the world's three leading digital standards.
Wireless phones that include walkie-talkie features will be
available next year, during the second phase of the equipment's
introduction.
Shank said Ericsson will offer the equipment to its
''biggest customers.'' He declined to be more specific.
Not all analysts and investors see Ericsson's equipment as a
threat to Nextel and Motorola. Even if the equipment were
available tomorrow, it would take a while to get it into the
wireless networks.
''It's something that can't be introduced overnight,'' said
Albert Lin, an investment analyst at Abernathy Group. ''Nextel
has a pretty commanding lead for the next two to three years.''
Ericsson's American depositary receipts rose 1 1/2 to 20
9/16. Nextel shares rose 5/8 to 20 5/8, while Motorola's rose
9/16 to 48 1/8.
--Colleen McElroy in Orlando, Florida and Andrew Brooks through |
