It's Your Move

When AT&T Wireless first publicized its plans for Project Angel last year, it created quite a stir in the industry. A major wireless carrier was taking steps toward the local service market. Now, just one year later, uncertainty and doubt have overshadowed the trial. The latest word, from a carrier that has been mostly silent about its progress, is from CEO C. Michael Armstrong. He has reportedly set a year-end deadline for developers to prove the project is an economic option for local service.

Regardless of Project Angel's ultimate fate, I still believe there is a great opportunity for cellular and PCS carriers in the U.S. local market. But I don't think we are anywhere close to reaching that opportunity. There are some significant issues that need to be addressed before wireless local loop (WLL) can become a successful venture for AT&T or any other carrier.

For example, many carriers, vendors and analysts blame installation costs and service pricing as the major hindrance to WLL. As a result, cost and price have been the focus of the U.S. WLL debate. But right now, the network should be the critical issue in offering WLL, not cost of service or installation. Carriers need to address capacity and spectral efficiency issues before they even launch trials or commercial service in the marketplace. Although digital networks have helped the security and call-quality issues, today's wireless networks do not have the capability to offer the quality of service that subscribers are accustomed to with wireline service.

Dropping prices will encourage subscribers to use wireless phones more, but what happens when they begin using wireless as an alternative to wireline and suddenly you can't support them? Supporting thousands of subscribers who use 1,000 minutes a month is much different from supporting thousands of subscribers who use 100 minutes a month.

Besides, lowering prices to be comparable to wireline does not make economic sense if you still are operating a network at wireless costs. Why not leave prices at traditional wireless rates and concentrate on improving network and technology issues?

Many carriers will blame vendors for the lack of network and technology capabilities. They claim they can't fully move forward with WLL efforts because there aren't enough products on the market to meet their needs. Most vendors admit they are focusing on the international arena because there just isn't a significant market for U.S. development. Carriers need to push these vendors harder. Vendors aren't going to spend the R&D to offer products unless there is a demand. The only way to reach real technology solutions is for carriers and vendors to work together to advance WLL. Carriers need to prove that they are serious about the WLL concept.

A handful of carriers have tried to prove their intent with deployments in very rural areas or stagnant attempts at the residential and business segment. But being committed to WLL doesn't mean you should jump into the marketplace prematurely. Too often the competitive environment encourages companies to get ahead of themselves in a rush to reach the market. Being first to market with a service offering is important, but only if the time is right. Carriers need to put more efforts into the network, technology and product issues before they jump into the marketplace with trials or commercial offerings.

When you do enter the market, it must be with a realistic strategy. The mission should not be all-out wireline replacement. Realistically, that is not going to happen anytime soon. There are too many issues standing in the way. But carriers can make headway by concentrating early efforts on smaller, niche markets such as second or third phone lines for residential service.

The only way for WLL to succeed is if you take the right strategy. Many carriers and vendors claim that WLL is ahard sell in the United States. That may be true now, but it doesn't have to stay that way. It all depends on your next move.