Motient Communications Inc. announced it will shut down the rural sections of its network, reducing its DataTAC network coverage from 200 million people to 137 million. The move is not totally unexpected-Motient has been bleeding customers and revenues for years, and has lately been using its remaining cash reserves to increase its stake in Mobile Satellite Ventures.
Motient said it would focus on its top 40 markets and would continue to supplement its network offerings by reselling services from Verizon Wireless and T-Mobile USA Inc.
“By focusing on our top 40 markets, we can free up the resources we need to add new networks and services to our iMotient Solutions service portfolio. These new networks represent the future of the wireless data market, and we are committed to investing in areas that will provide our existing and new customers the greatest value going forward. Wireless applications and the broadband requirements to support them are only going to grow in the future, and our iMotient Solutions platform provides us the ability to evolve into the future with our customers.” said Christopher Downie, the carrier’s chief operating officer and executive vice president. “By refocusing our DataTAC network efforts, we will also be able to improve the cost structure of our narrowband network, and expand our network offerings to include 1xRTT and GPRS.”
Loss-making Motient recorded a decline in revenues from $12.1 million in the third quarter of 2003 to $8.4 million in the third quarter of last year. During the course of that year the carrier also lost customers, including UPS, Sears and others. At the same time, Motient has been increasing its stake in Mobile Satellite Ventures, which has promised to launch an innovative satellite-based wireless network.
Motient has been a longtime player in the wireless data market. The company’s slow-speed DataTAC wireless data network competed with Cingular Wireless’ Mobitex wireless data network as well as the CDPD data offerings from Verizon Wireless and the former AT&T Wireless Services Inc. However, the market for slow-speed wireless data networks has been slowly declining as carriers introduce more advanced technologies like GPRS, CDMA 1xRTT, EDGE and EV-DO. Indeed, the nation’s two CDPD networks are in the process of being shut down.
“The response to iMotient Solutions and our new 3G network offerings has been fantastic,” said Deborah Peterson, Motient’s vice president of system engineering and solutions. “Customers put a tremendous value on network choice, a single point of contact, device support and the consultative nature of our relationship that ensures them a wireless data solution that works. The same wireless data company they have known for 15 years can now offer next-generation service with the same level of support and commitment they have come to expect from Motient.”
