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OPERATORS DEPLOY DIGITAL SERVICE AFTER YEARS OF TESTING STANDARDS

Years of testing, flip-flopping and hesitation are coming to a close as cellular companies begin to commit to a digital standard for their networks.

Driving the need to decide is the practical necessity to improve channel capacity and the impending entrance of fully digitized personal communications services operators into all cellular markets.

Digital technology gives operators more capacity on their current spectrum. The U.S. market is still torn between two rival digital technologies, Time Division Multiple Access and Code Division Multiple Access. TDMA allows cellular channel sharing by assigning users a specific time position. CDMA allows multiple users to access a single channel by allocating unique code sequences to each user.

Analog transmission-deployed in the original cellular systems more than a decade ago-uses a continuous electrical signal. Using digital technology, operators can transmit more calls on the same amount of spectrum and that is important with about 25 million cellular users today.

“If the industry had anticipated there would be this many cellular subscribers, they would not have originally deployed analog,” said Tom Ross, cellular director at Economic & Management Consultants International Inc. Cellular companies will keep a portion of their networks operating on analog technology, but PCS systems will be fully digital.

TDMA won proponents early on because the infrastructure equipment was readily available. CDMA equipment has not been available for full deployment, which means operators who favor CDMA and have markets nearing capacity are deploying stop-gap measures until the infrastructure equipment is commercially available.

For instance, AirTouch Communications Inc. said it hopes to have CDMA deployed in its Los Angeles market by late summer/early fall, or at least by the end of 1995. But until then, AirTouch has been improving the analog system by adding microcells and performing cell site sectorization.

Qualcomm Inc., a CDMA equipment developer, recently pushed back its mid-1995 availability date for some CDMA equipment. Its cellular infrastructure equipment will be available during the last quarter of this year and early in 1996 for large-market deployment. Northern Telecom Ltd., another CDMA manufacturer, expects to have its CDMA equipment commercially available by mid-1996. “We as an industry underestimated the complexity of bringing this technology to market,” said NorTel spokesman Mark Buford.

Even if operators in the same market deploy different technologies, analysts don’t believe it will be a barrier to churn because the cost of the digital phones won’t be significantly high.

For instance, if a customer terminates service with a CDMA cellular carrier and switches to the carrier’s TDMA-based competitor, an inexpensive TDMA phone could be bundled into the new service deal, analysts said.

Operators expect handsets will be dual mode, accommodating TDMA or CDMA and analog technologies. Dissatisfied users can still churn to the other carrier using the analog portion of a dual-mode phone.

Ameritech Cellular Services changed from TDMA to CDMA a few years ago after a round of testing, said Evan Richards, Ameritech Cellular’s vice president of network. “We had installed about 100 cells worth of TDMA, and set up a system in Chicago and St. Louis. But the service wasn’t good enough,” Richards said. Customers complained about the voice quality, the waterfall sound and warbling, he explained.

It wasn’t too late for Ameritech to tear the TDMA system out and begin to replace it with CDMA. “The range of CDMA is greater. When we installed TDMA, we put one in each cell. With CDMA, we put one in every other cell. More capacity with less equipment,” Richards said. Ameritech expects to fully launch its digital cellular service in the first or second quarter of 1996.

CDMA is the choice of PCS provider PCS PrimeCo L.P. because it is “inherently broadband,” said Joe Woods, vice president and general manager of PrimeCo’s Chicago market.

CDMA provides a good evolution path as the industry moves from services that require little bandwidth, like voice, to more broadband-type usage, he said. The benefits of CDMA are the cost and functionality as well as the broad range it offers. “We don’t know where technology is going, but we want to have a network that will have a level of service quality that will be appealing,” he added.

McCaw Cellular Communications Inc. selected TDMA technology several years ago and has been aggressively deploying it in the company’s 100 cellular properties. TDMA will be available in 100 percent of McCaw’s cellular networks by the end of the year, except in Texas, the company said. To date, TDMA service has been operating for a year in Seattle and is operating in Florida, Colorado and Utah, said Bob Ratliffe, vice president of corporate communications for McCaw Cellular Communications Inc. and spokesman for AT&T Wireless Services, the long-distance carrier’s PCS arm. The company is using Interim Standard-136 technology.

This means AT&T Corp., which bought McCaw last fall, is locked into TDMA for cellular at this time. And since AT&T Wireless Services intends to hook its cellular and PCS holdings together, AT&T will use TDMA for PCS as well.

There’s been no fence jumping by longtime TDMA proponents BellSouth Cellular Corp. and Southwestern Bell Mobile Systems. Both have TDMA up and running, with no plans to change soon. Southwestern Bell has deployed TDMA in Chicago, Gary, Ind., Dallas-Fort Worth, St. Louis and the Washington, D.C./Baltimore area, with plans to launch TDMA service in Boston this year. Eighty percent of Southwestern Bell’s cellular customers eventually will have access to TDMA cellular, the company said.

BellSouth has deployed TDMA in Los Angeles, with plans of activating more sites this year and early next year.

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