ORLANDO, Fla.-Put four analysts up on a podium, ask them what they think and while their answers don’t always agree on specifics, their big picture themes often seem similar.
That’s what happened at the recent 1997 CDMA North American Regional Congress when four wireless market and securities analysts offered their views on the future of Code Division Multiple Access technology in particular and wireless telephony in general.
CDMA, which has gained a foothold in the United States and some Asian countries, lost out in earlier rounds of decision making in India and in certain Latin American and Pacific Rim nations. The reasons? It’s lack of a track record and the ability of nations to lock out by dictating certain technologies. The latter situation will change with the implementation, now pending, of the World Trade Organization market liberalization agreement.
“Some of those decisions will be revisited, and it will be good to have more technologies available,” said Crispin Vicars, senior analyst for The Yankee Group.
While not disagreeing with Vicars on the importance of opening markets to alternatives, Bob Egan, research director for The Gartner Group, said, “It’s time to get out of the Cold War on technology choices and start thinking about the end users.”
Actions speak louder than words, and one way to show customers the carriers want their business is to offer more sophisticated pricing plans.
“Wake up, guys. Zone-based pricing would increase minutes of use,” said Michael Elling, managing director of Prudential Securities Inc.
“This isn’t rocket science. It’s real simple stuff that would lower the cost of capital for a lot of companies, and Wall Street would make you rich.”
Cell-specific, or zone-based pricing, would be a valid response by CDMA and Global System for Mobile communications carriers to competition from dispatch services carrier Nextel Communications Inc., which is “kicking butt on this,” Elling commented.
Ira Brodsky, president of Datacomm Research, offered this counterpoint. “Nextel’s no-roaming charges are great, but plumbers don’t roam.”
For Vicars, landline phone companies-not other wireless operators-are the most important competitors.
Promoting wireless phone usage both in stationary and mobile environments is necessary for wireless carriers because their best hope of boosting wireless’ share of airtime usage is to “take landline minutes,” he commented.
“Wireless local loop is not fixed wireless, but access to both fixed and local users-pedestrians and motorists,” Egan said.
Elaborating on that theme, Brodsky said “AT&T’s (WLL) strategy of a pizza box on the side of your house isn’t the way to go.”
Microcells, now available, “are key to extending coverage, so that wireless local loop doesn’t necessarily have to be fixed.”
Besides taking landline minutes, Brodsky said personal communications services and cellular carriers have an opportunity to move into paging territory.
“Short messaging service gives cellular and PCS operators access to paging-like services,” he said. “Past attempts to combine cellular and paging didn’t work, but I look forward to pagers sold by PCS carriers.”
Wireless data communications, a minuscule part of the overall minutes of use today, hold great potential, provided certain developments in the works today come to fruition, panelists said.
One of the most promising possibilities on the horizon is the use of the Internet for voice transmission. “There will be voice via local calls over the Internet, and voice will become data,” Egan said.
Brodsky said he sees potential in the use of Cellular Digital Packet Data in Internet protocols, although he predicted its use as an air interface will “fade out.”
“With the capabilities of digital networks, whether CDMA or GSM, companies want future migration paths to deploy applications,” Vicars said. “CDPD provides that function, although it has limited coverage.”
Voice-to-text conversion is another important component of expanding wireless data and voice airtime usage.
“The majority of my responses, even to electronic mail, are with voice, so voice-to-text conversion is important for providing customers better value than your competitors,” Vicars said.
Voice-to-text conversion would get around a major impediment Elling said he sees in mobile data communications.
“We cannot type and drive even while sitting in the back of a taxi, but we can talk,” Elling said. “I don’t see one device as having it all. There are three priorities: first, smaller, lower-cost handsets; second, enhancements to voice services; third, wireless data.”
Wireless voice services are inherently simpler and less segmented than data services, he said.
“I’m a big believer in data. I have seen it in wireline and expect to see it in wireless, but it has many applications, many protocols, many markets. It is very complex, unlike voice.”
