Personal communications services network buildout is largely complete in the nation’s largest
markets, and carriers this year are beginning to focus their attention on filling in coverage and building out secondary
markets, say industry experts.
Brian Cotton, research manager for wireless at Frost & Sullivan, estimated about 75
percent of PCS buildout activity is centered around filling in coverage in major metropolitan areas with the remainder
of the activity in buildout of rural and second-tier markets.
Expanding and enhancing coverage has become crucial
for PCS carriers, many of which had impressive fourth quarters in terms of subscriber additions. One-rate plans such as
the one AT&T Wireless Service Inc. introduced last year have played a key role in attracting subscribers, especially
high-end business users who are less tolerant of coverage problems.
In addition to driving expanded coverage, one-
rate plans also could spur carriers to improve in-building coverage in business and consumer settings, said
Cotton.
Sprint PCS has been aggressively building out coverage and capacity in its markets, which paid off during
the fourth quarter when the company added 836,000 subscribers, say analysts. Since the beginning of this year, Sprint
PCS has launched service in Atlanta, Chicago and northeast Ohio.
“We are up to the challenges of 1999. We
have completed major market buildouts in the first quarter,” said Andrew Sukawaty, chief executive officer of the
company. “We will expand coverage in our own markets and through affiliates and roaming agreements as
needed.”
PCS carrier Powertel Inc. said it will spend 1999 expanding coverage in its major markets and on
highways. Kevin Inda, vice president of investor relations at Powertel, said the company has completed its initial
buildout in 34 of its 55 licensed basic trading areas. The company has built more than 1,400 sites in its markets and
plans to build about 200 additional sites this year.
Larger PCS players like AT&T Wireless and Sprint PCS have
employed affiliate agreements to speed up the buildout of their networks in several secondary markets. AT&T has
affiliate agreements with Triton PCS and TeleCorp Inc. to build out nearly 75 of its smaller markets. Sprint PCS said it
has affiliate agreements with 16 carriers in 30 states, including its most recent affiliate agreements in Illinois, New
York, Tennessee, Nevada, Mississippi, California and Washington.
A- and B-block carriers have just more than one
year left to meet the Federal Communications Commission’s five-year benchmark that requires PCS carriers to cover
one-third of their pops or face license revocation. Given the initial buildout in the most heavily populated markets, most
PCS carriers easily will meet the requirements, say analysts.
“I think a lot of these companies have reached
the point where they have coverage in at least their top core markets,” said Peter Nighswander, vice president,
cellular and PCS at The Strategis Group. “They probably won’t run into any trouble at the FCC.”
