Management solution merges networks >BY Dan O'Shea, Technology Editor

As telcos enter new businesses such as wireless, cable TV and Internet services, they probably will be operating more than one network at a time. However, to take full advantage of a multiple network environment, telcos must manage the operations and network functions of each network in a unified way.

Telcos likely will be in the hunt during the next few years for centralized management systems that can handle the natures and requirements of myriad systems. Many U.S. telcos are only now beginning to realize this, but a recent international announcement points toward the eventuality of this trend.

GTE Network Management Organization, the arm of GTE that develops and sells network management software products to network operators, has licensed some elements of its WorldWin software family to Binariang Management Services Sdn Bhd, a newly authorized network operator in Malaysia that is 20% owned by U S West. Binariang is building its Maxis national multimedia infrastructure with a hybrid fiber/coax cable architecture, a GSM cellular network, the MEASAT satellite system and an international gateway.

"What we are trying to do with Binariang is help it set up and manage an integrated network," said Charles Morgan, senior director of international business development at U S West Technologies.

The integrated approach is what prompted Binariang to look for a network and operations management system that could handle integrated network capabilities from the start rather than through later upgrades, said Paul Freeman, general manager of information systems at Binariang.

Binariang wants to use its integrated capabilities as an important competitive advantage in a nation of 20 million people that already is served by eight wireless carriers and at least two wireline operators.

Still, with the exception of Telecom Malaysia, the other competitors are mostly new, and Binariang is the only one licensed for wireless and wireline.

"With many lines of business, one thing our marketing people want to be able to do is to package all those products, and that also requires integration of back-office network management capabilities," said Freeman. "You have to use network management tools that enable you to do that easily."

That is exactly the philosophy GTE NMO used to develop WorldWin as a solution for multiple network environments because the company knew operators would need to exchange information among their networks to remain efficient in an increasingly competitive environment.

The system is a natural for integrated networks, in part because its functions are treated as data rather than hard coded in software. This means support for multiple network configurations does not require time-consuming software upgrades.

Binariang is using the InService, InForm and InExchange modules of the WorldWin product family. These products allow quick service creation and modification, customer care capabilities and information exchange between network elements (see chart). WorldWin also has InView, which monitors network performance at the service level. Binariang will use its own monitoring solution at the outset but may use InView by next year, Freeman said.

"There are many customers using WorldWin now but in specialized applications. Binariang's use of it to manage many different services is the broadest so far," said Randy Boroughs, director of marketing and product management at GTE NMO.

"We'll see more and more of this type of thing [Binariang's use of one management system for integrated networks] happening in the future," said a spokeswoman for GTE NMO, based in Bothell, Wash.

If you are a nautical type, or even if you have been a passenger on a voyage captained by a weathered sea dog, you know that sailing requires more than just wind, water and vessel. A proper sailor possesses an understanding of the physics of motion, a skill for navigation, raw strength and an ability for intense concentration. That, coupled with an appreciation of the vastness, power and eccentricity of natural forces, is what allows one to safely maneuver in and, ultimately, conquer the sea.

Similar are the skills required to pilot the wireless telecommunications marketplace, an ever-expanding ocean trawled by both decade-old ships undergoing refabrication and, increasingly, modern new vessels being launched from all ports. For the skippers of those crafts, trying to predict the course of wireless competition will be like trying to surmise the nature of the sea.

The wireless marketplace is just one sector of an industry itself in the throes of a sea change. Wireless acquired the task of being one of the first industry sectors to test the competitive waters when the U.S. government dictated that spectrum in the 1900 MHz frequency band be auctioned off to a new breed of wireless network operators and used to provide personal communication services, a category widely hailed as the next generation of wireless communications. That vision is now being realized as the companies that secured licenses in the first wave of those auctions break the champagne bottles on their networks and begin offering commercial service as direct rivals to incumbent cellular operators.

The four PCS networks that have been cut over so far have provided just a preview of how competition may develop. Now, the arrival of the remaining companies is awaited by a newly deregulated industry eager to see how the first truly open and competitive marketplace will develop.

How long will it be before cellular companies feel the effect of new competitors on their businesses? How will customers receive PCS? Will many PCS carriers fall prey to competition? How will enhanced services, network coverage, service quality and customer care rate?

Those seeking a broad characterization of how competition will emerge may be disappointed. Conventional wisdom says that competition in wireless will vary from market to market, carrier to carrier, business plan to business plan. But what cannot be generalized can be broken down and examined component by component so that everyone involved can gain a sense of the shape of things to come.

Form and Function For years, PCS has carried a mystique that has given it the air of being a single event, a happening so powerful in its appearance and effects as to redefine all that came before it. And why not believe this is so? After all, selling a climax can be easy and lucrative. It even makes a good story.

But despite human nature's love of dramatics, PCS may be less a happening than the next step forward for an already exciting line of business.

The introduction of PCS will push wireless further into an environment of competitiveness that ultimately will help customers who until now have had limited service choices: prices that have dropped over the years but could be lower, network reliability that has improved but is still surprisingly unpredictable and relationships with service providers that are probably best described as fair but inflexible.

"PCS coming in will give the consumer more opportunities, and that's a good thing," says Richard Lyons, executive director of the Cellular One brand alliance of cellular network operators.

That observation may make it seem like cellular companies have everything to lose and nothing to gain, while PCS companies have nothing to lose and everything to gain. In reality, both may have everything to lose and everything to gain.

"The great news here is that the overall market will expand," says Doug Martin, North American vice president for sales and marketing at the wireless networks division of Northern Telecom. "Most pundits are expecting the whole pie to grow."

Cellular companies have had years to get ready for the market shift that is now coming about with the entry of PCS. If they are wise-and perhaps a little lucky-they will have learned from their experiences.

"We are preparing for an era of more competition," says Lyons. "Our member companies recognize that they will have to have multiple services and enhanced services if they are going to compete. The cellular companies are really beginning to broaden in that area."

Palmer Wireless, a small cellular provider in the Deep South with about 250,000 customers, is realigning its prices with the expectation that PCS providers entering its markets will attempt to underprice, says Margaret Osborn, vice president of marketing.

Because the average wireless customer is starting to fit the profile of a consumer, the next generation of wireless may be founded on a retail-like model, and service providers have to respond in the same fashion, says Osborn.

There are other examples of how cellular providers are preparing for the future. After more than a decade in business, they are learning how to be proficient in customer care. Still, customer satisfaction and churn levels for cellular do not provide much to brag about.

In addition, many cellular carriers are investing in network quality and reliability, upgrading their facilities to digital and filling out holes in coverage or strengthening their networks in high-traffic areas through the deployment of microcells or picocells.

Also, brand awareness has reached a new height, and cellular companies are investing more in their company images than ever before, finally aware that the hard sell is not the only way to customers' hearts.

All of these elements and many other tricks-including enhanced services, voice quality, ease of activation and contract flexibility-will be put to use by cellular companies as they work against an onslaught of new competition.

PCS providers, although new, will start out with some advantages of their own. Their networks will be completely digital from the start, so they will not have to tackle the difficult transition to digital that many cellular carriers have undertaken.

"While the cellular incumbents are blessed with established business, they're faced with the digital migration problem," says Bob Sellinger, director of PCS for Lucent Technologies.

Digital networks mean that voice quality and capacity will not be issues. They also mean that short message services and other enhanced offerings will soon be in the offing.

Also, in many cases, new PCS companies draw experienced executives, marketers and technology teams from the telephone, cable TV or cellular companies backing them. Those affiliations could also allow PCS newcomers to position their wireless offerings as components of bundled packages and establish themselves as proponents of full service networks rather than niche service providers.

With the hype machine on their side, disgruntled cellular customers could run to PCS companies the moment the first shingle is put out. And whereas only a few cellular providers have begun to ease the difficult service activation and long contracts that they are famous for, the PCS companies almost universally will offer easier activation and flexible service contracts.

"People don't want to be locked into a multiyear relationship that blocks them from available alternatives," says Alex Battey, vice president of marketing for Sprint Spectrum. The Same Road

PCS providers are still a ways back on the road cellular carriers began traveling long ago. Their challenge is to essentially repeat all the steps that cellular carriers took to launch their businesses years ago such as planning and building networks, dealing with zoning for cell sites-a step that has increased exponentially in complication because of private microwave radio operators in the 2 GHz band-and establishing marketing plans and distribution.

"If they put the money in [for the licenses], they'll be there," Lyons of Cellular One says. "They'll just get more investors or figure out ways to do business with what they have." Among the later-arriving C block carriers-and, for that matter, those who grab spectrum in the upcoming D, E and F block auctions-success could prove even more elusive. For some, finding the right partner or partners is the only answer.

"The ones that don't band together are going to have a great deal of difficulty getting the financing they need," says Lynn Langford, president and chief executive officer of Mountain Solutions, a C block license holder that is building PCS 1900 networks in 12 markets. The company is currently involved in negotiations with three of its C block brethren, she says.

But C block success will not be achieved by bulk alone. Many smaller PCS providers are planning to fill in wireless niches by providing low-tier service that offers PCS functionality without extended mobility. Others will attempt to use their current business status as a springboard into PCS. Mountain Solutions, an established rural wireline carrier, is one example.

Still others will differentiate themselves by focusing solely on wireless in an attempt to be unique and stand apart from the multiservice provider.

"There's still a call for what we call 'pure-play' wireless," says Mark Lowenstein, vice president of wireless research at The Yankee Group.

But for all the positioning and nuances between the PCS and cellular factions, a schism still exists in the wireless industry between those who believe PCS is nothing more than cellular at another frequency and those who believe its introduction will transform the face-and customers' perceptions-of wireless service. As one might expect, the voice of the newcomer speaks the latter.

"The incumbent cellular carriers will do their best to confuse the customer as to what PCS is," says Sprint Spectrum's Battey. "It's an attempt to de-emphasize this new technology and the capabilities that will be available."

AT&T Wireless, which is building out markets at PCS frequencies and which recently began offering digital service in portions of its cellular territory, is a proponent of the PCS-as-wireless concept and rejects the notion that it is different from cellular.

"[PCS] is a new generation of technology and services, but customers are insensitive to frequency," says Stewart Chapin, director of product development at AT&T Wireless. "PCS is service, not frequency. We use [the term] to refer to digital and what that can offer."

Ultimately, the most prominent voice is likely to be the one that educates customers about what demarcates their services.

"Some companies will take advantage of marketing that they're the incumbents, while the new guys will market in the name of PCS," says Bo Piekarski, vice president of PCS at Ericsson.

"Our prediction is that three to five years from now there won't be a difference," he says. "It's just going to be wireless communications."

For the time being, however, the differentiation race will continue. "It's not just PCS vs. cellular," says Battey. "It's how service providers elect to implement their offerings."

The Fingers of Fate The five fingers of fate may not fall into the same league as the four horsemen of the apocalypse, but ignoring them could produce the same result.

The five fingers of fate are actually a set of guidelines that any wireless provider must live by to be competitive, says Tim Biltz, vice president of cellular at Vanguard Cellular.

The first of the five fingers is coverage. "To be competitive, you have to have a quality footprint," says Biltz.

Access is the second finger. Customers will not be interested in a well-priced service if getting if network capacity is a problem, says Biltz.

Service functionality, the third finger, also cannot be overlooked. Some customers are likely to make buying decisions based on the services and quality of service offered. "A lot of business will be driven by that," says Biltz, especially because digital networks can provide enhanced services and higher-quality voice transmission.

"Voice quality is extremely important," says Jack Finlayson, corporate vice president and general manager of Motorola's Pan American Wireless Infrastructure Division. For proof, he points to the efforts in all wireless corners to upgrade to higher vocoder rates. "You see a lot of that push for digital by PCS guys, but the cellular guys are gearing up as well-they're not sitting back."

The fourth finger of fate is price. "You have to remain very competitive on price. You need elasticity in your calling plans," says Biltz. Price will logically drive usage minutes, and minutes drive wireless revenue.

The last finger points to customer convenience and care. "You have to portray convenience in every way you touch the customer," says Biltz. Building a reputation for such convenience starts with providing easy activation for customers, he says.

Being strong in these five areas should guarantee carriers a position in the race but little else.

Putting the Fingers to Work If the five fingers of wireless fate represent somewhat consistent attributes of successful service providers, room still remains for certain elements to carry more significance than others.

"We don't believe there's any one killer application that will distinguish services," says Lucent's Sellinger. Rather, it will be a combination of cost, positioning and quality of service-which is ultimately determined by the technology a carrier selects, he says. "What will give carriers an advantage is the flexibility of networks and the flexibility of the technologies they acquire," Sellinger says.

But as important as technology is to providing high-quality service and making it unique, all experts agree that there is more to the game. Customer service, for one, is clearly a hot button.

Some companies may have the notion that most cellular companies do not engage in much proactive or regular research regarding customer service. Cellular One, however, maintains consistent levels of customer service through a brand-wide customer satisfaction program in which member operators survey their customers annually to gauge satisfaction.

"We want our member companies to keep an 85% customer satisfaction rating annually to keep the brand," says Lyons.

Likewise, Palmer Wireless took top ranking in the most recent satisfaction survey. "We have always focused on customer service as fundamental to our operation, and we'll focus more on improving customer loyalty because there are more competitors in our markets," says Osborn.

For cellular providers-particularly Cellular One and its member companies-brand image also will play a prominent role in differentiating their products.

"Our brand says that we are not just bringing a small pocket of coverage," says Chapin of AT&T Wireless.

Cellular One, which has been exploiting national coverage for years, puts a different spin on it. "National companies can have a cookie cutter approach to their markets," says Lyons. "We're local because our member companies are local and focused only on their areas."

Vanguard Cellular, although a member of Cellular One, tries not to operate like a national provider. "It's a local business," says Biltz. "We customize our marketing strategy to fit every market we are in. Being part of a national brand is a pretty good starting point. From there, we water everything down to the lowest common denominator."

"Much of the competition will be locally defined," says Lucent's Sellinger. "Services will be positioned and priced on a local basis."

Price, as always, will also play a central role in future competition, but most agree that blind pricing is no good for anyone.

"Market segmentation plays a key role in the growth of business," he says. "You have to know your customers-what they want and what they are willing to pay. Some new companies are probably going to underprice, and they may take a bath."

"People want good value for what they're getting," says Sprint Spectrum's Battey. "It's not necessarily just a cheap price."

In areas where PCS has already emerged or soon will, cellular companies are already using pricing to react.

"The advent of PCS has sparked the existing cellular [companies] to really start gearing up," says Motorola's Finlayson. "We're seeing a lot of plans coming out that are extremely aggressive."

Palmer Wireless is one incumbent reacting early, but Osborn subscribes to the belief that all the hype about price competition will not amount to much.

"People used to say that PCS would be 45% cheaper than cellular," she says. "Now, it looks like some of those new companies may come in only about 5% cheaper."

In a realm as diverse as wireless, it is difficult to make a blanket statement about how the future of competition will evolve. Soon, however, the bulk of the wireless fleet will be in place, and predictions and promises will become real-world successes and failures. Overall, the growth of wireless acceptance to date portends a lucrative market for a large fleet of competitors. As Nortel's Martin puts it, "A lot of people will win."