As the arms of wireless communications continue to stretch across the country, wireless local loop services are becoming increasingly popular, especially in rural areas where landline phones don’t reach many homes and businesses.
In the past year, companies such as Western Wireless Corp. and Frontier Cellular successfully launched WLL services in North Dakota and New York, respectively, and several other companies have conducted WLL system tests in other rural markets such as Iowa.
The service itself is still in the early adoption stages in the United States, but elsewhere in the world, where landline services are at a premium, WLL is in great demand.
In “Global Wireless Local Loop Markets: 1998,” The Strategis Group, Washington, D.C., projects fixed WLL subscribers will exceed 50 million worldwide by 2005, with Code Division Multiple Access being the technology of choice, followed closely by Digital European Cordless Telephone. In the Asia-Pacific region alone, subscribers are expected to reach 20 million, approximately 40 percent of the world WLL subscriber base.
Allied Business Intelligence Inc., Oyster Bay, N.Y., projects more aggressive growth. By 2006, WLL subscribers will exceed 100 million, ABI said. Decreasing costs, lack of competition in rural areas and higher quality service all are contributing to WLL’s steady rise in popularity.
“The promise of fixed-wireless technology has always been dependent on price-per-line, and we seem to be hovering around acceptable price to move product,” said Larry Swasey, senior wireless analyst at ABI. “The interest in WLL is high in all regions. There should be close to 2 million subs (in the United States) by the end of this year, and most vendors have shipped, or are about to ship, hundreds of thousands of lines.”
This includes Harris Corp., which last week said it launched the first Time Division Multiple Access local loop system in the 400 MHz band. The WINRoLL 400 system is designed to provide telecommunications coverage in large, rural areas, said the company.
According to ABI’s report, “Wireless Access Solutions to Local Loop Telephony,” no company can yet meet the “magic number” of $500 for price-per-line. The most successful vendors offering wireless local loop still linger around $650 to $850 for urban lines and $1,000 and up for rural access.
Mei Huang, vice president for international consulting at The Strategis Group, confirms ABI’s findings.
“The major thing is price,” Huang said. “If the price doesn’t come down to the level to the price you pay for installing copper lines, the line operator doesn’t have much incentive to use wireless.”
Frontier Cellular is making strides in the area of cost by offering its WLL subscribers unlimited calling packages that are competitive with landline rates. Frontier charges $35 per month for unlimited local calling in Rochester, N.Y., and $40 per month in other markets.
Wireless industry analysts and players concede one of the keys to widespread WLL success is its ability to accommodate wireline value-added services such as voice mail and call waiting. Incumbent local exchange carriers have the edge in this area, making it very difficult for WLL providers to secure any footing in the local telecommunications market.
Western Wireless knows first-hand the resistance and problems LECs can generate in their efforts to defend their telecommunications market share.
In January, Consolidated Telephone Cooperative, the landline phone company in Regent, N.D., population 268, disconnected numbers Western Wireless was using to offer WLL service. Consolidated claimed Western Wireless should have negotiated a competitive interconnection agreement with the company since Western Wireless was offering residential phone service.
“We’ll see the incumbent defending their territory and using whatever means they have to. It’s not unlike any other business where you have a monopoly and then competition trying to encroach on that,” said John Tedeschi, director of product development for Western Wireless.
In spite of the legal hassles, Tedeschi said the service in Regent has been “wildly successful.”
The extensive reach of copper lines in the United States however, means demand for WLL services in metropolitan areas remains limited.
“I think it’s going to be a subset of services offered by present PCS and cellular providers. There may be schemes where you get unlimited usage in a zone (the area surrounding your home or business). Outside of that, you get charged,” said Perry Walter, first vice president and wireless analyst at Robinson Humphrey Co., Atlanta.
Walter also said he thinks people who have a second or third line for a fax or modem eventually may disconnect them to go wireless.
Other wireless providers looking to enter the WLL market include U S West Communications Inc. and Bell Atlantic Mobile. AT&T Wireless Services Inc. is addressing the domestic WLL market with its Project Angel initiative, and Tedeschi said Western Wireless is “actively evaluating other options” in regards to expanding its WLL services.
So what does all this mean for wireline? Although wireless technology undoubtedly will continue to gain ground in the battle for telecommunications market share, wireline still has an important role to play.
According to Martin Cooper, co-founder and chairman of ArrayComm Inc., the transfer of very large amounts of data can be much more effectively handled by wires, and wire and fiber will continue to be the technology of choice for long-haul broadband communications. ArrayComm makes WLL equipment.
Cooper also noted in order for WLL systems to be cost-effective and reach significant market penetration, they must interface directly into the switched network and be spectrally efficient.
