The mother lode: Wireless carriers march toward local minutes

U S West's recent effort to integrate its wireline network base with a digital wireless system is just the latest signal that not all wireless services will remain quarantined on mobility islands.

The ultimate goal of many wireless carriers-and the real reason why it is crucial that service on their networks mimics landline quality-is to capture wireline customers and convert them to the wireless side. Armed with integration strategies like U S West's or one of the enhanced cordless solutions now available, a growing number of wireless competitors are poised to do just that.

The long delay in resolving the C block personal communication services licensing debacle has left many potential wireless mobility competitors high and dry because the markets they once coveted are now populated by several wireless carriers all pursuing the same customers. But the best opportunity for these late entrants might prove to be outside the mobility fray.

"Somebody that understands that the real target is wireline minutes of use has an opportunity to make a go of it," said Peter Bernstein, president of Infonautics Consulting, Ramsey, N.J. "You have to go where the minutes are."

A study conducted by Business Research Group estimates that the local service realm presents a $15 billion potential market for carriers-either wireline carriers without an existing wireless strategy or new wireless license holders-able to create a service offering that is competitive in price and coverage and offers quality that at least approximates wireline (see figures).

"If they're able to differentiate themselves on cost and offer a wide local calling area, that will give them an advantage," said Becky Dierks, senior director of telecommunications at BRG, Newton, Mass. "People are willing to give up a little bit of quality if there's a cost tradeoff."

U S West's integration strategy-which is similar to Alltel Communications' plan to merge its wireless and wireline systems-is both offensive and defensive: With a wireless component, the company can provide a mobility service on par with those offered by the cellular and PCS providers in its markets. But by bundling wireless with its existing wireline offering, the carrier can also ward off the wireless vultures looking to steal its wireline customer base.

U S West's unconventional pricing plan is also likely to distinguish its service in customers' eyes, one analyst said.

"Hidden in there is the concept paying in six-second increments," said David Kerr, director of wireless at Strategy Analytics, Morristown, N.J. "That should really change the value proposition for wireless."

U S West's one-number integration plan is just one of the technological options carriers have for crafting a service that will appeal to wireline users. The BRG study points to GTE's Tele-Go enhanced cordless offering as another alternative, and several C block hopefuls have indicated that they will pursue similar limited-mobility strategies.

Still, some observers believe that with proper network design and breadth, the digital wireless networks operated by cellular and PCS carriers will be even better equipped to provide landline alternatives.

"We're moving step-by-step toward digital cellular providing one phone number that can reach you anywhere, if you have the coverage you need," said Ira Brodsky, president of Datacomm Research, St. Louis.

SPRINT SPECTRUM GOES OVERSEAS American Personal Communications has introduced international roaming capabilities for customers on its Sprint Spectrum GSM network in the Washington/Baltimore region. The company has signed roaming agreements with carriers in the U.K., Belgium, Germany, France, the Netherlands and Hong Kong.

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