We've Come Unplugged
Speedy Wireless Access to Net Connects with Firms, Customers
USA Today
February 23, 2000
Shari Leyva, a telecommuting mother of two, had to become a Wireless pioneer to get the high-speed, reliable Internet connection she needed. Cable modem service isn't available in her suburban town of Gilbert, and her calls about getting a high-speed digital subscriber line, or DSL, link were never returned. "I just couldn't get anyone to call me back," says Leyva, who works for a Los Angeles maker of promotional toys and trinkets.
Now she's linked to a new breed of wireless service from Sprint that beams data into her home through an antenna a little larger than a standard sheet of paper at the top of her house. The Internet is always on, doesn't tie up a phone line and zips in about 100 times faster than it would over a standard modem. Leyva is one of millions of people tapping into a new generation of wireless phone and Internet services. A new world of wireless data is unfolding on two fronts ? mobile phones and mini-computers that give you access to the Internet or corporate data on the go and fixed wireless systems that bypass cable and phone networks to carry the high-speed Net services you want at home.
The options are vastly different and still in their infancies. They won't replace conventional ways of plugging in for most consumers anytime soon, but they offer tantalizing glimpses of a revolution that will make the Internet faster and more widely available than ever. "A new paradigm, which we call the wireless information age, is set to emerge," says Salomon Smith Barney analyst Michael Rollins in a report on mobile services.
The wireless information age is good news for the estimated 625 million mobile phone users worldwide for whom the Internet is fast becoming the big star of the really small screen. It's also good news for many households that won't be able to get high-speed Internet service from local phone and cable companies. Wireless has "hit the sweet spot," says Rollins.
How Sweet is Sweet?
* More than 30% of the U.S. population carries a mobile phone, and Merrill Lynch says that number could jump to nearly 70% by 2003, spurred in part by the ability to use the Internet and read or send e-mail over the phone. Parts of Europe are already at 70%.
* Revenue is expected to skyrocket this year for carriers like Teligent and Winstar, which use industrial-strength versions of fixed wireless technology to zap broadband services to business. Sprint, MCI WorldCom and AT&T are making their first forays into consumer versions of high-speed wireless Internet service. Sprint and MCI WorldCom spent $ 2 billion last year buying small companies with the right technology. AT&T has toiled for three years on its fixed wireless offering.
* Analysts expect the share prices of leading wireless technology and service companies to soar. They forecast 12-month share gains of as much as 84% for Sprint PCS, 52% for Nextel and 97% for equipment-maker Qualcomm.
* AT&T, seeking to cash in on investors' lust for wireless stocks, is creating a tracking stock for its own wireless business, as Sprint has done. BellSouth is considering a similar move, and there is speculation Bell Atlantic and SBC are, too.
* Microsoft staked out turf on the wireless landscape over the past year, making investments and creating technology that will help people reach their e-mail and corporate networks from handheld computers and mobile phones.
* The number of professional and amateur programmers working to create wireless data applications has jumped from 4,000 to 25,000 since August, says Sprint PCS CEO Andrew Sukawaty.
Mobile Wireless
So-called third generation wireless services will offer mobile phone users the kind of high-speed connections that should usher in a new range of uses, just as faster computers and Internet links have done in the wired world. And mobile phones are cheaper and easier to use than computers. "We're at the starting gate," says Sukawaty.
The Big Hurdle Today: Speed
Sukawaty expects mobile data speed to double in the next six months and continue increasing. But for now, data trickles into most wireless phones at about one-fourth the speed of a 56K modem and is limited to information tailored to the miniature screen.
Yet despite its drawbacks, the mobile Internet phone is already a potent consumer tool. Online shopping over a wireless phone is becoming a reality through a deal between Sprint PCS and Amazon.com. Online banking is in the works. And cell phones that double as Internet Walkmans, corporate databases and video-conferencing devices are not far behind.
AT&T Wireless President Dan Hesse takes his Internet phone into that bastion of bewilderment, the wine shop, where a quick check of a Web site helps him sort through vintages, rating and prices. "People always come up and start looking over my shoulder," he says.
Data is helping bring wireless to the point where "all of a sudden you go from 'Who needs it?' to 'I've got to have it,' " Sukawaty says. He should know. When MCI WorldCom, long a holdout on the wireless scene, had that change of heart last year, it agreed to pay $ 115 billion for Sprint, lured in large part by the possibilities at Sprint PCS.
Fixed Wireless
As mobile phones become able to do much of what a standard connection does, MCI and the top long-distance companies are betting billions that they can offer their own package of services using wireless to bypass the phone networks owned by their regional Bell rivals.
Teligent and Winstar are using fixed wireless to circumvent the Bells and offer high-speed service to businesses. Installing such systems is often faster and cheaper than tearing up the streets. And the market is huge, says Teligent CEO Alex Mandl, because fiber-optic lines don't serve about 97% of U.S. office buildings.
Federal Communications Commission Chairman William Kennard says fixed wireless brings more competition to the phone business and could hasten the rollout of high-speed Internet access for consumers, particularly in rural areas. That's how the big long-distance carriers plan to use it. Though AT&T has spent $ 110 billion buying cable systems it will use to bypass local phone companies, it plans to use fixed wireless where its phone and cable wires don't reach. It is now testing its fixed wireless system in the Dallas/Fort Worth area, and a long-awaited launch is due next year.
Yet analysts predict residential versions of fixed wireless will never capture huge market share. The reason: Cable modems and DSL will be on the market sooner and are faster overall.
In a recent report, Sanford C. Bernstein and McKinsey & Co. estimated the big long-distance carriers' fixed wireless services will take only about 15% of the residential broadband market by 2004. "The technical issues are legion," says Judy Reed-Smith, CEO of consulting firm Atlantic ACM. "This is not as easy to put up as the companies wished."
AT&T has only recently been able to cut the cost of installing its system to $ 750 per household, which is still a lot of money if a customer cancels. And earlier incarnations of the technology used by Sprint and MCI WorldCom were sensitive to disruptions by anything, including trees, that blocked a signal's path. Some customers became dead-of-night lumberjacks in order to keep their service going.
Tim Sutton, president of Sprint's broadband wireless group, says many of the early technical kinks have been worked out and often it's as simple as "pointing antennae at each other."
Whatever their drawbacks, fixed wireless systems are faster than dial-up connections, are always on and, in AT&T's case, include multiple phone lines at a discount to Bell rates.
Before he got Sprint's broadband service in Phoenix, Mike Elser says he was constantly exasperated by his dial-up service. A manager at a computer company, Elser would often need to download gigantic documents. With his old dial-up link, he would often start the hours-long download before he went to bed, only to wake up and find he had been bounced off the Internet at some point during the night, forcing him to start over. Those same files now bounce into his computer in three or four minutes, he says.
"Once you've had a broadband connection," Elser says, "you can never go back."
For wireless, that's the plan.
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