Consumer dissatisfaction continues

Electronic News, Jan 5, 1998 by Sarah Cohen

New York--Tom Wheeler, president of the Cellular Telecommunications Industry Association (CTIA), calls 1997 the year of personal communications services (PCS), the year when digital cellular phones became widespread throughout the U.S. "Last year fulfilled on the promise of competition--50 major markets moved from two competitors per market to five or more providers" and PCS accounted for much of the new wireless licensees. This lead to a substantial decrease in the cost of wireless services to consumers, stabilizing to 10 and 15 cents per minute on the digital side, by some accounts. Analog service is about 20 percent higher.

However, not everyone views the wireless scene as absolutely rosy. Ray Jodoin, InStat analyst, called 1997 "a year of complete consumer confusion...the customer doesn't care about what standard he's using, whether or not he's using PCS or AMPS, code division multiple access (CDMA) or time division multiple access (TDMA)...The bottom line is they're all lousy for two reasons: They cost more than the wireline phone, and you can't talk with anyone anywhere in the world."

And users of even digital wireless phones aren't always pleased with the performance of cellular services. There are reports of poor sound quality, and complaints due to the inability to connect to other phones using wireless protocols from a competing camp.

Industry observers agree that next year is unlikely to solve the "too many wireless protocol" problem that exists within the U.S. According to Rhonda Dervin, group marketing director for the wireless subscriber systems group of Motorola Semiconductor, "There won't be a unified wireless standard in this generation or the next. People have invested too much money" in their chosen protocols. The same scenario is not true in Europe, where GSM is the unified standard and may upgrade to the universal mobile telecommunications system (UTMS) in its third generation, a measure endorsed by Japan, who also has designs on converting to UTMS.

In 1998 on the digital side in the U.S., InStat's Mr. Jodoin said CDMA is encroaching rapidly upon the dominance of TDMA (utilized by AT&T) in the marketpace and will surpass TDMA in shipments by the end of this month. "When all is said and done, CDMA can handle more conversations per channel than TDMA." He believes next year will bring a further decline in cost per minute and fees per month to the customer.

But the true winner in a wireless protocol race in the U.S. "was (the analog protocol) AMPS, still is AMPS and will always be AMPS because the cellular portion is at 800-megahertz," said Mr. Jodoin. The CTIA's Mr. Wheeler expects dual-mode phones, operating within both the digital and the analog radio spectrums, to become more widely available next year.

IP networks may provide a possible answer to the multiple protocol problem in the U.S., says Mike Pawlowski, director of business, marketing and planning for GTE Mobilnet Wireless Data Services. But, he warns, IP networks are years away from the standardization phase. He sees 1998 bringing "more intense competition and more robust packaging of Internet solutions" at the data transmission side of cellular services, which employs the cellular digital packet data (CDPD) protocol. Mr. Pawlowski believes CDPD growth along the radio spectrum eclipses that of PCS growth today.