WSJE: Nokia To Seek To Bridge Cellular Divides
By GAUTAM NAIK
Dow Jones Newswires
February 7, 1999
Staff Reporter
LONDON -- Nokia Corp. is expected to launch today a digital cellular phone that will add a further twist to wireless wars in the U.S., while substantially improving service for subscribers.
Nokia's so-called tri-mode phone works on older analog networks, as well as two versions of a digital standard known as CDMA, or code-division multiple access. Because the phone incorporates all three technologies, it can provide better geographic access to digital networks in the U.S.
The new Nokia device is made specially for the U.S. market, said people familiar with the Finnish manufacturer's plans. While Europe and parts of Asia have a single digital standard for cellular phones, the U.S. has a hodgepodge of systems. The result is that a U.S. digital phone that works on one network typically doesn't work on another, leading to consumer complaints of spotty coverage and dropped calls.
The lack of a flexible digital phone has been conspicuous among U.S. carriers such as Bell Atlantic Corp. and AirTouch Communications Inc., which operate CDMA networks on two different -- and incompatible -- radio frequencies. And it hasn't made it any easier to battle one of their biggest rivals, AT&T Corp.
AT&T operates digital cell-phone networks using two different radio frequencies and a standard known as TDMA, or time-division multiple access. Since last year, however, AT&T has been able to offer its own tri-mode phones, built by Telefon AB L.M. Ericsson and Nokia, that work on the TDMA system. Because of these phones, and the improved coverage they offer, AT&T was able to market an immensely successful one-rate calling plan across the U.S.
"The one-rate plan is where the U.S. cellular market is going," said Kent Olson, an analyst at Strategis Group, a technology consulting firm in Washington. "It is very important for AirTouch and Bell Atlantic to have a nationwide footprint like AT&T." Not only will the new Nokia phone give AirTouch and Bell Atlantic a new marketing option, it could also let GTE Corp., Ameritech Corp. and other regional CDMA players offer improved digital coverage to their customers.
The Nokia phone, expected to ship by the end of March, underlines the Finnish maker's resolve to stay on top of the mobile-phone heap. Last year, it overtook Motorola Inc. as the world's biggest cell-phone manufacturer, and outran Ericsson of Sweden by quickly introducing better cell-phone models. Indeed, Nokia's new phone launch comes just a week after Ericsson unveiled a new digital model for the European market.
Nokia's tri-mode phone is modeled after its extremely successful 6100 series, people close to the company said. Phones in the 6100 series cost anywhere from $199 to $249 in the U.S., and Nokia's tri-mode phone is expected to cost a little more than that.
One unusual feature of the new device is a built-in modem. It also has a so-called profiling system that lets the user program the phone to accept only certain calls. Thus, the user can create a profile known as "meeting" that diverts all nonbusiness calls to a voice-mail box. Similarly, under a profile named "outdoor," all calls from the boss over the weekend are automatically transferred to voice mail.
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