Cover Story
October 20, 1997
ANY TIME,ANYWHERE?
North American wireless customers face unique challenges
when traveling to other parts of the world--and carriers are just
beginning to address those challenges
TERRY YEN and GARY DROUILLARD
Any time, anywhere has always been the mantra for wireless service providers
in North America. In the past, it meant that subscribers were able to place and
receive calls on their mobile phones any time, anywhere--as long as it was in the
United States and Canada. With the increasing globalization of business and an
exponential increase in international travel, wireless service providers soon will
find that to keep their most valued subscribers satisfied, any time, anywhere
service must extend far beyond U.S. and Canadian shores. Compared with
European or some Pacific Rim wireless markets today, North American
international roaming is in its infancy. By some estimates, international roaming
business accounts for 15% to 30% of a European or Asian operator's total
revenue. U.S. operators, in contrast, estimate that international roaming
accounts for less than 1% of the total North American industry revenue today.
Why does the North American market of 50 million cellular and personal
communication services (PCS) subscribers lag behind the rest of the world in
terms of international roaming? The most prominent reason can be traced to
customer expectation. Although service providers may have international
roaming agreements, most have not aggressively marketed this capability.
As a result, most subscribers in North America are unaware that international
roaming is available. Coupled with the known complexities and cost of roaming
in the U.S. and Canada, the typical subscriber probably has low expectations
about roaming across the ocean.
This situation is expected to change. Statistics from GTE TSI indicate that travel
between North America and the rest of the world for business and pleasure will
increase 42% by 2000.
Between the economic hotbeds of Asia and North America, travel is expected
to grow even more--65% between 1997 and 2000. Seldom will travelers find
one empty seat on a 747 jet flying between an Asian capital and a North
American West Coast gateway such as Los Angeles or Vancouver.
Many of these travelers are likely to be business executives, the cream of the
crop in a wireless service provider's customer base. Sensing this potential surge
in demand for greater mobility in cellular and PCS, service providers are finally
beginning to seek solutions to satisfy the growing needs of their top customers.
North American issues
Several unique technical and business issues await North American service
providers as they begin to develop international roaming services. U.S. and
Canadian carriers have deployed various wireless access technologies--AMPS,
code division multiple access (CDMA), time division multiple access (TDMA)
and GSM--on two different frequencies, 800 and 1900 MHz (Table 1).
Not all potential roaming partners have compatible networks. AMPS
subscribers, who dominate the North American market, can roam only with
other AMPS networks around the world while using an AMPS handset.
CDMA and TDMA standards have dual-mode capabilities that enable their
subscribers to roam on either digital or AMPS networks. GSM users in North
America can roam only on other GSM networks around the world. And Japan
has three unique standards of its own, including personal digital cellular, the
personal handy-phone system and a Japanese version of total access
communication systems. As a result, a subscriber who buys a handset in New
York is likely to find it will not work in Tokyo.
A less obvious technical issue for North American international roaming is
mobile phone number conflicts. North American technologies based on the
IS-41 standard for internetwork signaling--such as AMPS, CDMA and
TDMA--use a 10-digit construct called a mobile identification number. Like a
typical phone number, the first three digits of the mobile identification number
are the area code.
Outside the U.S. and Canada, however, those first two or three digits could
represent a country code, which could create a conflict. In these instances,
subscribers could lose their unique identity. Countries such as Israel, Mexico,
Peru and Venezuela have known conflicts with U.S. area codes.
Fortunately, a voluntary organization known as the International Forum for
AMPS Standard Technologies is working with service providers around the
world to address mobile identification number conflicts. Through quarterly
coordination meetings and the adoption of a special international roaming mobile
identification number, service providers have been able to resolve existing and
upcoming conflicts.
An even more important challenge that carriers will face, according to roaming
administrators at North American service providers, is fraud. Because fraud
losses in North America alone add up to almost $1 billion annually, carriers are
understandably concerned about exposing themselves to additional losses from
international roaming.
The main source of this fear is that carriers feel they have no control over
customers who are halfway around the world. Fortunately, carriers already have
asked for real-time usage monitoring tools to track their customers' North
American roaming, and several monitoring tools are available today. Vendors of
these new tools are rapidly making them available to overseas carriers as well.
Another concern for North American carriers is the ability to collect on an
international roaming partner's debt. What happens when there is a dispute or a
chronic slow payment for an account?
To address some of these situations, a new international roaming agreement that
outlines a resolution process has been drafted. In addition, requiring an overseas
carrier to participate in the Cibernet Net Settlement program will correct late
payment habits. The Net Settlement process has firm dates and stiff penalties for
noncompliance with the financial terms of the roaming agreement.
A hurdle that overseas carriers must overcome to break into the North
American market is the multitude of roaming agreements needed to gain
widespread coverage in the United States and Canada. This is a perplexing
problem for overseas carriers because most of them are coming from having
national, single-carrier coverage on their home systems. To them, the North
American market looks fragmented. An overseas carrier may need as many as
100 agreements in place to gain coast-to-coast coverage in North America.
Here and now
Despite the issues, several international roaming solutions exist for all North
American operators.
Automatic roaming with subscribers' own handsets. Assuming carriers
achieve technical compatibility, automatic roaming is the most convenient option
for subscribers. This solution allows subscribers to take their handsets to
another country, just as they travel with their handsets to another North
American city, and use them almost as if they were in their home market.
The overseas service provider connects to the North American provider as if it
also were located in North America. The overseas carrier adopts North
American protocols for clearinghouses and billing, thereby making its identity
invisible.
For this solution to be effective, service providers must resolve all potential
mobile identification number conflicts before implementing a roaming agreement.
This is the preferred approach for CDMA and TDMA service providers today.
CDMA providers in Hong Kong, Singapore, Canada and many major
metropolitan U.S. cities offer this international roaming solution to their
subscribers.
Manual roaming with rented numbers. Manual roaming can take many forms,
but one frequent practice is for a service provider to "rent" a block of mobile
identification numbers from a service provider in another country. Before leaving
their home market, roaming customers rent a mobile identification number from
their service provider.
This mobile identification number is then assigned to the customer and
programmed into the second numerical assignment module of the customer's
handset. When the customer reaches the destination country and switches the
handset to the second numerical assignment module, he or she can use all the
services offered by the local service provider.
While the customer can originate calls at will, he or she must provide the
directory number of the rented mobile identification number to receive calls from
the home network.
This solution is being used by several AMPS service providers. SK Telecom, an
AMPS and CDMA service provider in South Korea, shares such an
arrangement with BellSouth in the U.S. SK Telecom subscribers can roam in
North America using rented numbers from BellSouth and appear on the
networks as BellSouth subscribers.
SIM card roaming. Subscriber identity modules (SIMs) are a unique feature of
GSM technology. Sometimes referred to in advertising as the "smart chip," this
microchip device is inserted in the handset and stores information about a
customer. A GSM handset cannot operate without a SIM card.
To roam internationally, a North American GSM customer needs to take his or
her SIM card to an international destination and rent GSM handsets from the
local GSM service provider. Once the SIM card is inserted into the rental
handset, the customer can originate and receive calls to his or her mobile
number.
A rental handset is required for North American GSM customers traveling
overseas because North American GSM handsets are designed to operate at
1900 MHz, as opposed to 900 or 1800 MHz everywhere else.
GlobalRoam. GlobalRoam is a relatively new international roaming solution
provided by GTE TSI for a number of AMPS, GSM and personal digital
cellular service providers around the world. This solution can be characterized
as a bridging service that connects customers using different technologies.
When an AMPS customer travels to Europe, he or she takes along a SIM card
and a rented GSM phone. Likewise, a GSM customer is provided with an
AMPS handset when traveling to the U.S. In either case, the customer can
place and receive calls on his or her home cellular number.
This two-way arrangement is enabled by special network gateways that provide
interoperability between the different wireless air interfaces. GTE TSI offers
GlobalRoam in conjunction with GTE Wireless,
T-Mobil of Germany and NTT DoCoMo of Japan.
Automatic roaming is clearly the most convenient solution for customers because
it does not require rental handsets or trips to an operator's customer service
center in a foreign country. In terms of cost, airtime rates do not differ much
among the various methods, but the need for rental handsets drives up the cost
of GlobalRoam and SIM card solutions (Table 2).
Prospects for an open road
Operators recently have removed two barriers preventing widespread
international roaming.
Initially, there was no international roaming agreement that defined the terms and
conditions of the business arrangement. However, such a document now exists
and is widely circulated.
In addition, overseas carriers previously lacked roaming support tools for
validation, call delivery and usage monitoring. Today, though, most major
vendors have active international operations.
The removal of these issues has placed the fate of international roaming in the
hands of market forces. The new digital PCS carriers in North America appear
to be actively marketing international roaming services.
Competing against entrenched cellular operators, PCS carriers are working to
match the coverage of cellular in North America in order to provide their
subscribers with domestic roaming capabilities. In parallel, several PCS carriers
are developing international roaming service with an eye on differentiating their
value proposition against cellular operators.
Some GSM PCS carriers already are advertising international roaming service
to 17 countries in Europe and Asia. The need to match service offerings will
drive cellular operators to more aggressively pursue international roaming
relationships.
The ultimate international roaming service could become commercially available
in 1998. Low earth orbit satellite systems such as Globalstar and Iridium may be
the first to provide global any time, anywhere service.
Both companies will offer dual-technology phones, allowing customers to use
cellular or PCS where available, and satellite where terrestrial wireless service
isn't available. Globalstar phones, for example, will support the two dominant
digital wireless technologies today--CDMA and GSM--in addition to satellite
transmission air interface.
Regardless of technology or standards, the user will be able to place or receive
calls with one phone and be identified by only one phone number. Unlike
today's wireless customers, satellite customers will be able to buy a phone in
New York and be assured that it will work in Tokyo--or Timbuktu.
Terry Yen is a Manager in the Costa Mesa, Calif., office of Pittiglio Rabin Todd
and McGrath. Gary Drouillard is Manager of Roaming and Fraud
Administration for BC Tel Mobility, Vancouver, British Columbia. |
