The number of players participating in the wireless technology industry grows with each technological advancement. In the 1990's, three key communications developments are commanding the industry's financial, marketing and technological attention. They are digital direct broadcast satellite (DBS) services, personal communications services (PCS), and low-earth orbit and medium-earth orbit (LEO and MEO) global satellite systems. Meanwhile, paging, cellular telephone and other standard wireless communications services continually add advanced features and applications to address our increasingly mobile society.
Communication services providers and product manufacturers make up today's wireless technologies industry. Both groups often create consortiums or alliances in order to pool resources to plan and implement major projects. For example, DIRECTV, a unit of GM Hughes Electronics, turned to an experienced consumer electronics manufacturer, RCA-Thomson, to help it develop a digital DBS system with a marketable price and to distribute it to retail consumers. On a grander scale, Bell Canada Ltd., Lockheed Corporation and Sprint Corporation are among those companies participating in Motorola's implementation of its multi-billion dollar global satellite system, Iridium.
Primary categories within the wireless technologies industry are: paging systems and trunk radio, packet-switched radio, cellular telephone, local area wireless networks, wireless cable, satellite-based wireless systems, and PCS.
Paging Systems
Conventional paging systems offer regional and nationwide one-way messaging to subscriber devices. The messages may be numeric only, such as a telephone number, or alphanumeric, which contains both letters and numbers. SkyTel, whose service covers 90 percent of the continental United States, is the predominant player in this field. Other providers include Pagenet and Pagemart.
Trunk radio, a two-way radio paging network, typically has been used to transmit voice communications. For example, Specialized Mobile Radio (SMR) operators dispatch and communicate with freight haulers or similar fleets. Racotek Inc., Nextel Communications Inc., and other vendors also offer trunk radio data services for paging and file transfer applications.
A recent paging system development is enhanced paging services (EPS), which transfer data, such as corporate bulletins or on-line news updates, one-way. EPS's message length capability of 30,000 characters far surpasses conventional paging's capability of 240 characters. EPS can also simultaneously broadcast messages to a number of receivers. Current suppliers are Mobile Telecommunications and Motorola Advanced Messaging Group, whose EPS service is called EMBARC (Electronic Mail Broadcast to a Roaming Computer).
Radio Frequency (RF) Packet Radio
RF packet radio, also called private packet radio, transmits short data messages either one-way or two-way. Typical applications include messaging; point-of-sale transactions, such as credit card debiting; telemetry, which monitors remote devices, such as vending machine supply levels and utility meter readings; and database query, such as obtaining a current stock market quote.
Two providers define the private packet radio industry: Ardis Company and Ram Mobile Data, Inc. Ardis provides coverage in 10,700 metropolitan regions in the United States, Puerto Rico and the Virgin Islands. The company reportedly controls over 90 percent of its market. In Los Angeles, New York, San Francisco and Washington, D.C., its data rates reach 19.2 kilobits per second using Radio Data Link Access Protocol. In these three locations, its data rates are faster than those of cellular telephone modems, which typically run a maximum of 14.4 kilobits per second. Elsewhere, however, its data rate is considerably slower, 4.8 kilobits per second, using Motorola Data Communications MDS-4800 protocol.
Hardware suppliers for Ardis services include AT&T, Digital Equipment Corporation, Hewlett-Packard Company, IBM, NCR and Toshiba America Inc. Subscribers can obtain middleware (products that allow applications running on incompatible operating systems to communicate with each other) and applications from Airsoft, Business Partners Solutions, Nettech and others.
In comparison, Ram Mobile Data, Inc. provides services in 6,300 regions in the United States. It uses Mobitex protocol to transfer data at 8 kilobits per second. Ericsson GE and Intel supply hardware for its network. Applications suppliers include AT&T, Lotus and others.
Cellular Telephones
Most cellular telephone networks use analog-based circuit switching technology. The most common transmission system in the United States has been advance mobile phone service (AMPS), which uses 3-kHz analog voice channels modulated onto 30-kHz FM carriers. Two digital technologies evolved to address the need to increase each channel's call capacity: time division multiple access (TDMA) and code division multiple access (CDMA). In 1989, the Telecommunications Industries Association (TIA) adopted TDMA as a digital standard, and in 1993, it accepted CDMA. Any cellular provider is capable of offering circuit-switched transmission.
Neither TDMA nor CDMA, however, offers a low cost mechanism for data transmission. A consortium, comprised of McCaw Cellular Communications, Inc., GTE Corporation, Ameritech, Bell Atlantic Corporation, NYNEX Corporation, Pacific Telesis Group and Southwestern Bell (now SBC Communications), developed specifications for a packet-switched cellular technology. Called Cellular Digital Packet Data (CDPD), it intersperses data amid voice traffic already on the air. Any cellular provider can offer CDPD-based services without having to obtain licenses for additional frequencies from the Federal Communications Commission (FCC), because this technology shares the same bandwidth as cellular voice channels.
Rollouts of CDPD services began during 1994. GTE Mobilnet provides coverage in 74 metropolitan regions, and McCaw Cellular Communications, Inc. offers coverage nationwide. Coverage by the five participating regional Bell operating companies (RBOCs) is within each of their specific regions.
To implement their networks, CDPD providers require hardware and software that, in most cases, is supplied by outside vendors. Key suppliers of the CDPD subscriber device, which essentially is a modem and radio bundled together, are Cincinnati Microwave, Motorola, PCSI and Sierra Wireless. A number of software companies are competing to supply CDPD providers. They include Advanced Control Technologies, Advantis, EDS, General Programming, Lotus, Microsoft, Navtech, Software Corporation of America, Sun and Verifone.
Whereas in CDPD products the modem and radio are integrated, in circuit-switched cellular products they are not. The market offers a variety of cellular modem products to meet non-CDPD cellular users' digital transmission needs. Some are Personal Computer Memory Card Industry Association (PCMCIA) modems, including Type 2 and Type 3. Others combine a cellular phone and external modem. And others are pocket fax/data modems or internal modems for laptops. While most connect directly to phones, others require purchase of an external interface box or a given vendor's cable or adapter. Likewise, most are compatible with the market's most popular cellular phones, but some are compatible only with select phones.
For the most part, cellular modems are compatible with any Macintosh or Windows platform with an EIA-232 serial port. Some, however, work only with specific platforms, such as Compaq or Toshiba. All run at speeds of 14.4 kilobits per second. Their wireless protocols are MNP10, Enhanced Throughput Cellular (ETC), Motorola Enhanced Cellular Control (ECC) or U.S. Robotics High Speed Technology (HST).
Thirteen suppliers dominate the cellular modem market. They are Air Communications Inc., AT&T Paradyne, Apex Data Inc., Compaq Computer Corporation, Data Race, Megahertz Corporation, Microcom Inc., Motorola UDS, Powertek Industries Inc., Racal-Datacom Inc., Toshiba America Inc., U.S. Robotics and Western Datacom.
Local Area Wireless Networks (LAWNs)
For private data transmissions within a limited geographic area, such as a building or office park, companies can install local area wireless networks (LAWNs) that use unlicensed narrowband, spread-spectrum or infrared electromagnetic frequencies. These networks are based on microcellular architecture. Each contains a server, the wired backbone and antennas for access points that command an operating range, or microcell, for wireless devices.
Customers can choose a supplier that owns and operates the LAWN and bills them for services, such as Metricom Inc. and Pinpoint Communications Inc., or they can purchase spread-spectrum base stations, antennas and other equipment from manufacturers and set up their own networks. Suppliers of the latter option include Gambatte Inc., Proxim Inc. and Spreadnet.
Wireless Cable
Wireless cable, which has existed since the 1970's, transmits video programming via microwave towers to some 700,000 U.S. subscribers. Financial, technological, regulatory and other difficulties have plagued the industry. The Cable Act of 1992 , though, minimized a major limitation, access to programming, by requiring producers to sell their programs to any buyer at competitive prices. Today, some 175 systems operate in the United States.
Digital technology promises to put wireless cable in an even stronger position to compete for cable customers. American Telecasting Inc. and five vendors, namely Andrew Corporation, California Amplifier, Emcee Broadcast Products, Microwave Filter Company, and set-top manufacturer Zenith Electronics, have created Wireless Cable Digital Alliance to test digital compression over four of its systems.
Exploring a different competitive approach, Videotron is introducing its Videoway interactive technology in systems that it recently acquired in San Diego and San Francisco, California; Spokane, Washington; and Tampa, Florida.
Other operators are adopting a wait-and-see attitude toward technological advancements. In order to build their customer bases, they are focusing on maintaining lower prices than cable operators and providing top customer service.
In addition to American Telecasting Inc. and Videotron, wireless industry cable players include CAI Wireless, Cable-Maxx, Coastal Wireless Cable Television, Daniels & Associates and General Instrument Corporation.
Personal Communications Services (PCS)
The FCC began auctioning licenses for personal communication services (PCS) frequencies in 1994. License holders expect to implement their networks in 1997.
Six companies won narrowband PCS licenses in 10 markets. AirTouch Communications, Inc., currently a cellular voice and data provider, will offer PCS service for acknowledgment paging and short messages. BellSouth Wireless Inc. plans to provide acknowledgment paging, electronic mail (E-mail), credit card verification, telemetry and locator services. Destineer Corporation will implement two-way paging, acknowledgment paging and E-mail services. Another cellular voice and data provider, McCaw Cellular Communications, Inc., will provide two-way messaging. Pagenet will offer voice paging, and Pagemart will offer two-way paging and acknowledgment paging.
The FCC granted broadband PCS licenses for 99 markets during the January 1995 frequency auction. Viewing PCS as the next major development in public communications networks, long-distance service carriers, local telephone companies, cellular telephone service providers and cable operators submitted bids. The top three bidders (namely Sprint Corporation, AT&T, and a consortium of Bell Atlantic, NYNEX, US WEST, Inc., and AirTouch Communications, Inc.) obtained 61 of the regional and metropolitan markets. Besides data transmission, the companies intend to provide telephone and video services.
Satellite-based Systems
In the mid-1990's, two satellite-based systems have captured the wireless industry's attention: direct broadcast satellite (DBS) and global satellite.
DBS, an alternative to cable television, transmits programming via geostationary satellites, positioned 22,300 miles above Earth, directly to subscribers' homes. Two systems, PRIMESTAR Partners and Digital Satellite System (DSS), currently offer DBS in the United States.
General Electric and six cable operators, including TCI and Time Warner, own PRIMESTAR Partners, which began operations in 1986. The company leases its minimum 36-inch diameter satellite dish, receiver and other components to subscribers. General Instrument Corporation produces PRIMESTAR's equipment. In order to increase the number of channels it can offer and to improve image and audio quality, PRIMESTAR converted to digital compression technology in mid-1994.
In comparison, DSS has used digital compression technology from the moment it began broadcasting in June 1994. DIRECTV, a unit of GM Hughes Electronics, and UBBS, a subsidiary of Hubbard Broadcasting, are the two companies that provide DSS programming. RCA-Thomson produces the 18-inch diameter satellite dish and other components and sells them to subscribers through its retail outlets. Systems start at $700. After one million units have been sold, Sony will also become an equipment supplier.
A third DBS player, EchoStar Communications Corporation, will enter the market after it launches its own satellite, scheduled for late 1995. The company eventually expects to provide 250 channels.
Market analysts have likened consumer acceptance of the DSS product, which resulted in sales of nearly one million systems during its first year, to that of VCRs and televisions when they first hit the market. Based on this record, they expect DBS to have between 10 million and 15 million customers by the year 2003.
The other satellite-based technology that has captured industry focus, global satellite systems (also known as LEO and MEO satellite systems), will provide two-way voice, data and facsimile communication internationally via handheld telephones. In early 1995, the FCC granted licenses for development and implementation of three initial systems: Motorola's Iridium, TRW's Odyssey and Loral/Qualcomm's Goldstar. These licensees plan to become operational in 1998.
Implementation of these systems requires coordination and cooperation among scores of telephone companies around the world, national and international government entities, technology firms, from telephone unit manufacturers to rocket launchers, and key investors. For example, Iridium's major shareholders include Motorola, Nippon Iridium Corporation, DDI Corporation, Bell Canada Ltd., Sprint Corporation, Lockheed Corporation, VEBA AG and numerous Japanese, South Korean and Taiwanese firms.
Groups that lost out during the FCC's initial licensing process also hope to implement global satellite systems. Among them are Constellation Communications and Mobile Communications Holdings, whose applications the FCC deferred until January 1996 to give them the opportunity to improve their financial qualifications.
-- contributed by Nancy Muenker
