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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?


To: w molloy who wrote (3971)12/6/1999 4:42:00 PM
From: Bux  Read Replies (2) | Respond to of 13582
 
Network congestion? I had little idea things had become so good (for Q).

sfgate.com

Wireless: Victim of its own success

Vanessa Hua
OF THE EXAMINER STAFF Dec. 5, 1999


Lured by the siren song of a cheap calling plan, mobile phone novice Dwana Bain signed up with Pacific Bell Wireless in March, but when Bain dials up during the evening commute and at other peak hours, she gets a wail of busy signals or the silence of disconnected calls.

"I get the "system busy' message on my phone quite frequently," said Bain, 29, of Menlo Park, adding that only the threat of a pricey early termination fee kept her from skipping out of her contract.

"I owe my soul to these people for one year," she said.

The cultural shift in the way people use cell phones - from a luxury item to an everyday fix - has overwhelmed the wireless network in the tech-savvy Bay Area and other metropolitan areas, industry experts say.

Affordable service plans and improved mobile phone technology have enabled more users to gab longer than the phone carriers had anticipated.

Just as America Online's all-you-can-eat Internet plans led to a surge in use that [ depth of text is 44.60 inches. ]jammed its modems, so, too, must the wireless industry now deal with the consequences of skyrocketing popularity.

In AOL's case, subscribers hogged the system for hours, preventing others from logging on. Similarly, too many people using their mobile phones at the same time cause fast-busy signals, disconnected calls, and other woes - even as carriers spend billions beefing up their networks to meet the demand.

"The overloaded networks are one of the clearest signs that wireless demand is out of control," said Jeff Kagan, an Atlanta telecommunications analyst who has several mobile phones with different providers. If one carrier's network is busy, he'll try another.

The recent swarms of inexpensive plans with long distance and roaming included helped push the number of mobile phone users to nearly 28 percent of the U.S. population this year, or 76 million subscribers.

"The number of subscribers has been unstoppable, in terms of response," said Pamela Johnstone, a spokeswoman for Cellular One, the Bay Area's leading carrier.

Once they've signed up, millions of subscribers are staying on longer than ever. Instead of stashing their mobile phones for emergencies or important business calls, people are using them to chat while waiting in line or even to replace their basic telephone service. New phones with longer battery life and features such as paging and voicemail have also encouraged extended use.

Mobile phone subscribers use an average of 159 minutes per month on local calls, up 39 percent from a year ago, according to the Cellular Telecommunications Industry Association in Washington, D.C.

"The busy hours for us have shifted. It's not just during rush hour but during the whole day. And that's put a strain on various systems," said David Maischoss , regional vice president of marketing of Pacific Bell Wireless, a subsidiary of the San Antonio-based SBC Communications.

The bounty of new subscribers and changing usage patterns caught some carriers off guard, despite planning by their marketing, sales and engineering departments. The massive competition fostered by digital service attracted two to three times more subscribers than expected, analysts said.

In May 1998, AT&T became the first service provider to offer a plan that allowed customers to make calls anywhere for a single flat fee. The carrier was also the first to fall victim to its own success: AT&T officials admit that <*col. 1 of WIRELESS (#35220 )*> the company had trouble keeping pace in the New York market where the flat rate plan premiered.

Earlier this year, New Jersey-based Naevus International Inc., a consumer products company, filed a class action suit against AT&T for failure to accommodate the traffic from hundreds of thousands of new Digital One subscribers. Litigation is still pending.

The wireless industry's continuing push for new customers angers users like Geoff Nilsen, 25, who relies on his Sprint PCS as his primary phone.

Calls on his mobile phone often drop. More recently, his friends must dial him two or three times before getting through, he said. Customer service representatives said the problems were due to network overload. At the same time, Sprint and other carriers have stepped up their blitz of advertising and promotions. "Sprint's overselling with a massive marketing campaign, but it doesn't even have the infrastructure to handle its current subscribers," said Nilsen, of Palo Alto, who pays $50 a month for 500 minutes of local and long distance service.

In the Bay Area, Sprint PCS leads in the perceived frequency of dropped, or disconnected, calls, with 60 percent of customers complaining about the problem some or all of the time, according to a recent survey by Telephia, a San Francisco market research firm.

Nextel followed closely behind at 59 percent, Cellular One at 45 percent, GTE Wireless at 45 percent and Pacific Bell Wireless at 37 percent.

In the last year, Sprint PCS signed up 2.9 million customers, more than doubling its subscriber base to 4.7 million nationwide, a spokeswoman said. Other carriers also reported record growth.

"For network engineers, identifying traffic spots beforehand is damn near impossible. It's a whole new science," said Craig Ellingsworth, an analyst at the Yankee Group, a market research firm in Boston.

Network engineers have had years of experience dealing with dead spots, or areas where tall buildings and geography limit the reach of cellular signals and antenna placement. Now congestion has become the next generation of headaches, baffling users who can't get service even in areas near cell towers. Even with the advent of digital technology - which has a capacity three to seven times greater than older analog - the unexpected rush of customers strained the network.

"Digital offers a lot more capacity than analog, but there are still only a certain number of calls that can be handled," said Harry <*col. 2 of WIRELESS (#35220 )*> Thomas marketing director of GTE Wireless, based in Irving, Texas.

On both wireless and land line telephone networks, only a certain number of calls can go through at any given time. Calls compete with others to get and stay on the network on a first-come, first-served basis. When mobile phone users experience dropped calls or have trouble connecting, it may be due to congestion (although an old, faulty mobile phone or a dead spot can also cause such problems.)

Adding to the potential for a disconnected call is the process of handing-off. As a user chats while driving, his call gets passed from antenna to antenna. If the hand-off site is busy serving other users, the call may disconnect.

Service providers pinpoint these trouble spots through constant monitoring, field testing and receiving customer complaints. Solutions include reallocating capacity by moving telecommunications equipment to more heavily trafficked areas or by adding new equipment that increases capacity and carries the call signal farther.

In some cases, some service providers may even bring in a "cow" - cellular on wheels - to boost capacity. In San Diego, GTE rolled in a cow to replace a cell tower on a building destroyed by fire. Cellular One uses mobile towers at sporting events such as Pebble Beach golf tournaments, Sears Point races and professional football games.

"It would great if you could just turn a knob and move capacity from place to place, but that's not the way it works," said MirjanaCvjeticanin, Bay Area general manager of Nextel, the Reston, Va.-based carrier that primarily serves business customers. Nextel designs its network to serve peak traffic levels - even if that means some capacity is wasted during down times, she said.

The industry has labored to increase capacity and coverage, making an estimated $9 billion in capital expenditures this year in North America. Sprint PCS has already budgeted money to build out and increase capacity through 2001. Likewise, over the last three years, Cellular One spent $300 million on network improvements, turning on more sites than in the preceding 10-year period, a spokeswoman said. Nextel expects to increase the number of its Bay Area cell sites by 30 percent.

The lengthy zoning process may slow even the best plans. After finding a suitable site, companies still need to get clearance from local government officials, negotiate leases with property owners and sometimes fight neighborhood opposition.

"We try to anticipate the needs <*col. 3 of WIRELESS (#35220 )*> and demands from subscribers," said Heidi Swanson, a Sprint PCS spokeswoman. "But we can't go anywhere and plop down (mobile phone equipment) in a site."

Subscribers remain impatient for change.

Ray Thackery loses his connection nearly a quarter of the time on his $115, 1,400-minute GTE plan.

"I'm at an Internet start-up. I need to be contactable at any moment," groused Thackeray, vice president of sales and products at seeUthere.com in Mountain View.

"Instead, people are always calling me back, asking why I put the phone down on them."

The congestion may lead some customers to rethink their choice of carrier, analysts warn, since many subscribers rank call quality and local coverage as high in importance.

"There's nothing more frustrating than talking to major client wanting to place an account, and in the middle of the conversation, the call breaks off," said Scott Hauge, an insurance agency owner who switched to Cellular One about two months ago.

Although Hauge sought the much-touted reliability of digital service over analog, he estimates that his calls still disconnect at least a third of the time.

Some relief may come in the next few years as carriers build out their high capacity networks. But telecommunications experts said the bottleneck is here to stay, especially as new bandwidth-crowding Web and data services and more mobile phone subscribers test the network.

Hooked users say they are willing to put up with the inconvenience as the technology evolves.

Tom Grams, head of international sales for television station ZDTV, plans to stay wireless despite spotty coverage and high bills of the Sprint PCS service he began subscribing to six months ago.

Said Grams: "A cell phone is incredibly handy even though it's another tentacle that ties us in the late 20th century."


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¸1999 San Francisco Examiner Page D 7 Examiner