Cellular revisited Afraid to let PCS newcomers tarnish their hard-earned image, cellular operators are sallying forth with enhanced digital services and marketing efforts >BY JASON MEYERS, Wireless Networks Editor

Judging from the way things have shaken out so far, incumbent cellular operators never expected personal communication services to look so much like cellular.

Most of the larger cellular carriers-particularly those serving urban markets where capacity strains show more readily-have been looking at upgrading their systems for years. A few even launched digital trials early on, only to find flaws in the technology that sent customers running back to analog and forced operators to reconsider their initial digital platform designs.

Despite these early digital trials, however, incumbent cellular operators appear to have been caught largely off guard by how quickly PCS has gained favor in the mass market. In the past 15 months, several PCS operators have launched fully digital networks in the designated 1.9 GHz band. Meanwhile, only a handful of cellular operators have been able to claim full commercial availability of digital services at 800 MHz.

Customers are beginning to notice. PCS launches traditionally are accompanied by a flurry of marketing and advertising activity aimed at disparaging analog cellular service, portraying it as yesterday's wireless. Cellular carriers have quickly responded with their own publicity campaigns, but the fact remains that certain features inherent to digital systems outstrip what an analog network can provide.

After more than a year of taking a beating, however, cellular is on the rebound. In an effort that has begun in the largest urban markets and will eventually trickle down elsewhere, incumbent carriers are quickly improving the quality, security and reliability of their embedded networks by providing digital alternatives. New marketing and pricing campaigns are aimed at downplaying the difference between wireless service in various spectrum bands while highlighting the advantages of networks that have evolved for more than a decade.

Even as PCS proliferates, the cellular contingent is redefining wireless on its own terms.

Digital forces As successful as analog wireless service has been to date, cellular operators are going to find it difficult to defend themselves from all fronts if they can't provide some response to PCS (Figure 1). Most cellular operators will opt for digital wireless.

For various reasons, a number of operators already have begun some type of digital upgrade. Some, hovering dangerously close to maximum capacity in their analog networks, hope that converting some channels to digital will alleviate that crunch.

"It's like giving yourself a longer highway with more lanes," says Craig Farrill, vice president and chief technical officer of AirTouch Cellular. "You can get more people on it, and you can drive on it longer." Traditional analog carriers tend to view digital service as a premium and market it only toward their most profitable customers. AirTouch's goal, Farrill says, is to eventually migrate about 15% of its high-use customers onto its code division multiple access (CDMA) system. The target market is customers that use at least three hours of air time a month.

"This is about minutes, not about users," says Farrill. "Minutes are where the revenue is.

Other cellular carriers-primarily those operating in small or mid-sized regions-may not need the capacity but have some high-volume customers that want the added features and benefits digital can offer. Still others cite purely competitive reasons-they want to be able to offer something to customers who are at risk of switching to a competitive PCS system.

"Our initial foray into CDMA was driven by wanting to make sure the quality was in place and the analog network was maintained," says Susan Amato, senior vice president of engineering and network operations at 360° Communications. "The longer-term strategy is related very closely to adding capacity.

Technology in transition Because the majority of incumbents already offer comprehensive packages of analog services based on advanced switching and intelligent network platforms, adding digital air interface capabilities is not technologically difficult.

"The primary challenge is just RF management," says Bob Sellinger, director of personal communications systems at Lucent Technologies, which assists many of its 800 MHz cellular customers in migrating to digital. In many cases, operators will not need to add base station sites, which eliminates zoning and antenna siting issues.

To accommodate additional load, however, carriers may need to adjust the RF design. "You may have to do some cell splitting to support the same number of customers," Sellinger says.

Adding digital capabilities to an existing network generally involves minimal hardware additions at the base station sites and software upgrades in the mobile switching centers. Depending on the design of the existing system, some cellular operators find that they require no additional cell sites for the transition.

"We have enough of an analog base that we were able to leverage that and be creative with our RF design," says Samantha Anderson, manager of technology planning at 360°.

Most carriers already have room in their base station sites to accommodate the additional radio equipment required. For their part, most infrastructure providers supply customers with equipment that can adapt to changing needs.

"As we roll out smaller equipment, we make sure it's still backward-compatible," says John Powers, director of sales and operations for Motorola's Cellular Infrastructure Group. "We make sure the integration is simple and that operators aren't required to replace equipment.

Care in handling The real challenge in transitioning these systems to digital lies in the fact that they have an established reputation and carry active, revenue-generating customers. Changing anything-for example, moving analog customers to another channel to free up space for digital testing-risks disrupting service for those who helped build the business in the first place.

"You don't want to punish the paying customers," says Powers.

"We do not want to jeopardize our analog customers at all," says Anthony Muscato, vice president of engineering and planning at Ameritech Cellular, which is currently testing CDMA. Indeed, one of the most important differences between new PCS builds and cellular analog-to-digital transitions is the fact that new operators have no existing users and are therefore not as vulnerable to engineering error.

"New operators want to come out with a bang, but established operators don't want to disrupt their existing customers," says Arunus Slekys, vice president of digital cellular networks at Hughes Network Systems. The need for seamless operation often dictates that work on the digital network is made during off-hours. "The challenge is the cutover, so at midnight on Sunday you throw the switch," Slekys says.

That becomes even more of a challenge when the analog system in question is already over-saturated with customers, which tends to be the case in densely populated urban environments like New York and Los Angeles.

"The most important thing is for the operator to engineer the system with the digital transition in mind so that they have a good system to begin with as they introduce digital," says Keith Shank, director of product management at Ericsson Radio Systems. "That way, the analog consumer sees very little of what's going on.

Operators also want to ensure that they offer customers something in voice quality clearly delineated from analog service.

"It pays to wait and deliver the highest quality service," says Farrill of AirTouch. "We had to exceed the expectations of analog customers to have a value proposition they would perceive as premium.

The final cut By many accounts, optimizing an analog-to-digital transition is one of the most challenging steps in the process.

"You can't just put digital channels in your analog cellular sites and hope for the best," says Roderick Nelson, senior vice president of engineering at AT&T Wireless. "We've had some growing pains. It is very challenging to introduce new technology on a system that has millions of customers on it, but we had the benefit of four years of experimentation.

The optimization process involves testing and tuning the radio network to ensure optimum transmission, looking for coverage holes, testing cell handoff and making sure that network capacity meets the operator's expectations.

"The key to making it work well is to optimize well," says Ameritech's Muscato. "The learning curve is slow initially and will grow exponentially.

Most cellular operators are deploying a relatively new digital air interface for the first time. "With any new technology there's a whole new set of parameters to optimize," says Bill Stone, network staff director for digital implementation at Bell Atlantic Nynex Mobile. "It takes some time-and some trial and error-to learn how to set up those parameters.

The testing and optimization process is far from final, especially because cellular operators have analog networks to fall back on, precluding the need for full digital system deployment all at once. Most cellular carriers turn on limited digital systems at first-enough to support early adopters and high-end customers-and continue build out gradually from there.

"It's an ongoing, iterative process, and I don't think we'll ever be done," says Amato of 360°.

Mixed messages One of the biggest dilemmas cellular providers must tackle is defending existing service offerings in the face of heavy competition while simultaneously marketing an enhanced digital service. Some industry observers have wondered, only half-jokingly, if cellular carriers should move their best customers over digital to boost revenue, or if they should move their worst customers over to get them out of the way.

Analog cellular networks have been satisfying customers' needs for many years, and some smaller operators are confident that just enhancing the existing system will sufficiently squelch competitive threats.

"We offer a lot of enhanced features on our analog network, and we don't feel we need to provide digital to differentiate ourselves," says Philip Junker, director of strategic marketing at 360°, referring to "PCS-like" features such as voice-activated dialing and over-the-air activation.

The difference in quality between analog and digital also depends on perspective. Although digital service is touted for its ability to eliminate static, other factors can contribute to overall quality.

"I view quality through a couple of lenses: on where I can use my service and reliability in addition to the clarity of a call," says Junker. "Cellular fills the bill on all three.

Even in larger markets where digital service has almost become a necessity for capacity reasons, the operators' marketing efforts depend upon the specific customer needs (Figure 2).

"Digital has different appeal to different segments of the marketplace," says Hank Bonde, president and general manager of L.A. Cellular. Where some customers seek longer battery life or the security of digital, others prefer the sound quality of digital voice transmission.

Despite the debate about technology-based advantages, incumbent operators generally view themselves as having the upper hand simply because they were there first. Often, they have not only technology and operational expertise, but customer loyalty as well.

"No matter how fast new entrants can do it, it's going to take them a long time to perfect what they can offer customers," says Bonde.