The new Nextel SMR operator upgrades inside and out >BY JASON MEYERS, Wireless Networks Editor

As the wireless industry gathers this week for one of its most important annual events, Nextel Communications is likely to prove a most unwelcome guest.

That's because the specialized mobile radio (SMR) operator has chosen this week to launch an aggressive new advertising and marketing campaign that marks the culmination of a three-year internal and external rehab project. Having overhauled its network technology, restructured its operations and personnel, and made inroads toward a national presence, Nextel is now quaking the wireless market with an enhanced digital offering aimed at the highly lucrative business market.

Nextel's rebirth began in 1994, when the company took its first crack at a digital offering based on SMR technology from Motorola's Land Mobile Products Sector.

"Motorola developed a technology and rolled it out in Los Angeles, and it didn't work," said Tim Donahue, president and chief operating officer of Nextel. "The quality of the interconnect portion was awful, and people just didn't accept it.

Around the same time, wireless magnate Craig McCaw-having just sold his cellular empire to AT&T-dropped out of the Federal Communications Commission's personal communication services license auctions and sunk $300 million into Nextel. McCaw's investment marked the beginning of a technology upgrade that would position the company to offer a national digital wireless offering with enhanced dispatch capabilities, including one-touch broadcast to individuals and work groups.

"[McCaw] saw the value of the national network and of the differentiated product," Donahue said. "What he didn't like was that the quality was so bad. He's an ingenious technologist, and he was able to bring his expertise to the table and fix the technology.

The result was Motorola's integrated digital enhanced network (iDEN) technology, for which Nextel placed an order valued at more than $100 million in June 1996. The platform, which uses a Northern Telecom switch, has all the components of a GSM platform up to the point of the air interface, where it breaks between 200 kHz channels for GSM interconnect and 25 kHz channels for the dispatch portion, according to Bob Barnett, vice president and general manager of Motorola's iDEN group (see figure on page 108).

The advantage that presents to operators-only the first of many-is in using one core infrastructure for two types of high-quality services without having to reinvent either, he said. "We're continuing to make various enhancements in the two-way side to bring out features and functions," said Barnett.

Despite improvements in the quality of service the iDEN technology can provide, the concept of providing communications capabilities to work groups has not shifted, said John Shelton, president of Nextel's Chicago region. He views Nextel's offering as the voice communications equivalent of capabilities such as local area networks and intranets that have become so vital to corporate operations.

"The power of this is not just in terms of coverage and distance but also the ability to talk to several people at once," said Shelton. "It's a natural follow-on to what the computer industry has been doing for the past several years.

While the technology was being improved, Nextel was also bringing in expertise from the wireless industry-both domestic and international-to help raise the monetary and spectral resources necessary to build a national presence.

"We got the technology fixed, we put the new team in place, and it was time to raise some money so that we could put together the national network that is key to our success," said Donahue. The company plans to save 70% of the U.S. population with its digital networks by the end of 1997, he said.

The campaign that will kick off this week-the first broad-sweeping advertising effort the company has ever done-will use the tag line "Get smart, get Nextel" and will focus on security, feature capabilities, cost structure and especially voice quality. "We want to make sure our customers understand that we are hell-bent on putting the best possible quality out there," Donahue said.

Nextel recently announced that it would not charge roaming fees for customers traveling in other Nextel markets, and this week it will unveil a pricing structure that rounds air time charges to the nearest minute-something cellular and PCS pricing structures have yet to achieve.

"The value of rounded pricing is the whole genesis of the ad campaign," said Bob Ratliffe, vice president at Nextel. "We think customers should pay for what they use.

The campaign will also highlight Nextel's near-nationwide network presence, a feature that few cellular or PCS operators can rightly claim, Ratliffe said. "No one has been able to do a lot of national advertising in wireless," he said. "Because our footprint is going to be so large, we can. By the end of this year, people are going to know who Nextel is.

Nextel's sprawl suggests that it ultimately might adapt its service to be more consumer-friendly rather than focused on business communications. That could happen eventually, Donahue said, but in the meantime the company will focus its efforts where the money is.

"Clearly we have the capacity and capabilities in our network to handle consumers-and lots of them-but right now the economics don't work," he said. "Right now we're in the business-to-business game. I want high-revenue customers. We're going to the moon."