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To: JGoren who wrote (19269)12/8/1998 8:03:00 AM
From: John Carragher  Read Replies (1) | Respond to of 152472
 
info from wsj

December 8, 1998

Asian Technology
Dual-Band Networks Plan to Boost
Capacity Without the Interference

By WAYNE ARNOLD
Staff Reporter of THE WALL STREET JOURNAL

THE CELLULAR pitchmen have come up with something new to
entice you to their networks: dual-band services.

In the past, this column has addressed the need for dual-mode phones that
would allow your mobile phone to function at home as well as in cities that
rely on a different radio frequency or cellular standard -- using your phone
from Hong Kong in the U.S. or Japan, for example.

This is different. The new push for dual-band services is about encouraging
you to use two different frequencies on the same network where you now
use just one.

Television ads typically portray dual-band networks as something that will
turn your life into a kind of sci-fi romance, where love and clear
connections fill the air.

Surprise! Dual-band networks aren't about love. They aren't even about
you. They're about giving operators enough space on the airwaves to fit
lots of other customers like you without making your own connections so
poor you switch. For now, dual-band services are just another confusing
new option to the cellular consumer, but industry executives say they'll
eventually take over conventional single-band services. When that
happens, you won't have to decide what frequency your phone will use.
You'll just be offered various packages of cellular service distinguished
only by how good they are relative to each other in terms of network
resources -- a sort of cellular first class, business class and economy.

Consider the three new dual-band networks being offered in Hong Kong.
The networks' operators -- Hongkong Telecom, Hutchison Telephone and
SmarTone -- were already offering services using the GSM (global system
for mobile) standard that tunes into frequencies around 900 megahertz on
the radio dial. But there are only so many cellular conversations that can be
squeezed onto any amount of radio frequency, so the operators have been
working hard to find ways to boost capacity and keep all those
conversations from interfering with each other.

LUCKILY, Hong Kong's government decided a few years ago to grant
licenses for cellular services at around 1,800 megahertz, dubbing them
PCS, or personal communications services. Hutchison won one of those
licenses, but Hongkong Telecom and SmarTone didn't. So they each went
out and bought a company with a PCS license. This year, the big GSM
mobile-phone makers started selling dual-band phones, which enabled
operators with GSM service at 900 Mhz and 1,800 Mhz to start offering
dual-band service.

The principle behind a dual-band network is pretty simple: the network
tells your phone to switch back and forth between 900 megahertz and
1,800 megahertz depending on which frequency is stronger or less
congested. Even during a conversation, the phone should toggle between
the two to make sure you get the best possible connection. In a perfect
world, a network operator starts with a blank slate and plans network
coverage incorporating both frequencies so as to benefit from their
differences.

Lower frequencies, for example, travel farther before petering out,
meaning an operator can cover a given patch of territory at 900 megahertz
using fewer radio base stations than at 1,800 megahertz. But because
higher frequencies spread less, an operator can put more high-frequency
base stations in a crowded urban area without having them interfere with
each other's signals. In other words, an operator can get more capacity
using 1,800 megahertz and customers can get less interference.

Few operators live in a perfect world, though. Smart Communications in
Manila and Far EasTone in Taiwan are lucky enough to be building
dual-band networks from scratch.

One of the worst possible scenarios is that facing Singapore's SingTel
Mobile. Singapore already had a GSM network at 900 MHz covering all
of Singapore, and then built a second, islandwide network at 1,800 Mhz.
Two networks, same coverage. That meant that when SingTel Mobile
started offering dual-band service this year, its dual-band network
expanded capacity but not coverage.

WORSE, SingTel used Ericsson equipment for its 900 Mhz network,
but incompatible equipment from Northern Telecom for its 1,800 Mhz
network. As a result, the two networks operate separately, and a
dual-band phone on one frequency only switches to the other frequency
once the signal it's using becomes too weak to carry a conversation, not
during a call already underway. SingTel says it's working on a solution.

Hutchison made sure to keep its PCS network on the same Motorola
equipment its GSM network uses. But HongKong Telecom and
SmarTone were faced with situation similar to the one SingTel
encountered. They bought PCS operators whose equipment was
incompatible with the gear they were already using. Rather than put up
with it, though, they took the drastic step of digging up the PCS networks
they purchased and rebuilding them using compatible equipment.

But that's where the similarities end. SmarTone decided to build a new,
Hong Kong-wide 1,800 MHz network and plans to use it for both
dual-band services and as a separate PCS service for budget-conscious
consumers.

HongKong Telecom, which already has a budget service on its GSM
network, is taking the perfect-world approach and using 1,800 Mhz only
to boost capacity in congested areas. It says it also has superior
technology to make sure its dual-band users really get less-congested
connections. Special software automatically tries to put dual-band
customers on the 1,800 Mhz network first, since phones trained to search
for a stronger signal will tend to always spot the congested 900 Mhz
frequency first.

What's more, the company says it has developed a special technology that
allows the network not just to choose one frequency or the other, but to
juggle the digital bits of a call onto both 900 Mhz and 1,800 Mhz to
reduce the risk of interference damaging the quality of your call.

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Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.




To: JGoren who wrote (19269)12/8/1998 8:56:00 AM
From: Jon Koplik  Read Replies (1) | Respond to of 152472
 
To all you people agonizing over "low" (and declining) handset prices -- Have you ever thought through the economics of what it means to sign up one marginal (paying) subscriber (to a wireless service OR cable TV service OR Internet service OR even some magazine) ?

Let me use Internet service as an example.

If I sign up for $20 a month, that is $240 a year. How large an amount of U.S. Treasuries do you need to produce $240 a year ? Well, at interest rates of around 5%, then it is 20 times $240 or $4800.

If you assume that the marginal cost to an ISP of having "me with them" is near zero, then me walking in the door and signing up is EXACTLY the same as someone donating $4800 worth of T-bonds to the firm's corporate balance sheet.

Another way of looking at this is : the marginal, new subscriber makes the business worth an incremental $4800 if the business were to be sold the next day.

Now, do you understand why agents who bring in new subscribers are usually given compensation ?

If a $30 cheaper handset brings in lots of new wireless subscribers ... believe me, the service provider is not crying over the additional $30 subsidy on the handset.

Jon.