360 bides its time Wireless carrier takes advantage of small market niche to leap into upgrade >BY WAYNE CARTER, Associate Editor-News

Chicago-based 360° Communications is planning a multimillion-dollar expansion of its cellular network in Research Triangle Park, N.C.

The carrier is planning to overlay code division multiple access (CDMA) digital technology on its network in the Raleigh/Durham/Chapel Hill area and will place new transmission equipment at existing sites in Durham, Orange and Wake counties. The expansion is expected to produce a sixfold increase in 360°'s call-handling capability in the market. Engineering studies have already begun, and the company's executives expect the project to be finished within a year.

The expansion comes just three years after 360° upgraded its Research Triangle Park network with narrowband advanced mobile phone service (NAMPS) technology. Increasing demand for cellular service prompted the carrier to upgrade again.

"The growth we've been experiencing in the Research Triangle Park area has been nothing short of phenomenal," said 360° Vice President Sal Cinquegrani.

Subscriber growth has exceeded the company's expectations, and 360° wants to ensure unimpeded access for its customers in the region, he said.

Harry Young, vice president at the Strategis Group, said 360° is bowing to the inevitable by implementing CDMA. "Smaller markets may be able to get away with analog [cellular service] for a long time, but not larger markets," he said.

After years of debate about digital technologies, CDMA is now gaining wide carrier acceptance, said Rebecca Dierks, wireless program director at Business Research Group, Newton, Mass. More equipment should be available for CDMA service, meaning lower prices for infrastructure and phones, and customers using CDMA-compatible equipment should experience better roaming capabilities as more CDMA networks come on-line, she said.

CDMA's increased call-handling capability and call-processing security will become necessary for cellular providers in large markets such as Research Triangle Park, not only to compete with personal communication services providers but to avoid overloaded analog networks, Young said. CDMA reuses all cell frequencies with a digital code encrypted in each signal to identify the sender and receiver and prevent interference with other signals.

Cinquegrani said 360° decided early in the decade that it would wait for CDMA technology to become viable before converting to digital. Time division multiple access technology (TDMA) was available for rollout before CDMA but offered only triple the call-handling capacity of analog. The carrier opted for NAMPS as an interim improvement until CDMA, with even greater call-handling capacity, became commercially viable, he said.

"We figured, if we know we can get more than a threefold increase without disrupting service, we can bide a little time and let the technology develop," Cinquegrani said, adding that 360°'s position as primarily a small-market provider allowed it to wait for CDMA, whereas providers in larger markets such as Chicago, Los Angeles and New York were forced to jump on the digital bandwagon early because of capacity problems.

360°'s claim of a sixfold increase in call-handling capacity with the new service is in line with CDMA test results, which have shown capacity increases ranging from five to 15 times that of analog service, Dierks said. But added features and increased quality will only partially determine how the move to CDMA will affect 360°'s market share once the upgrade is complete, she said. The cost, particularly relative to the cost of analog service, will be a key factor in whether the public goes for digital service, Dierks said.

Other than the cost of a digital handset, 360°'s customers won't know by the price that they're getting digital service, Cinquegrani said.

"When we deployed digital service in Las Vegas [in 1996], we decided not to put a premium on that service," he said. "The price is going to be the same.

The carrier doesn't sell digital service under a different label from its analog service either, because it believes myriad pricing and service plans drive customers away. "Confused customers don't buy," Cinquegrani said.

He wouldn't speculate on which of the carrier's markets may be next in line for digital upgrades. "We're going to be driven to digital by the need for capacity," he said. "I don't know where that next market will be."