No Time to Waste

Alhtough many C-block licensees struggle just to build basic network coverage and overcome financial strains, Hargray Wireless has deployed mobile and fixed-wireless service in nine counties.

Although most young PCS players are focused on initial build-out and don't want to be bothered with other issues that could slow things down, C-block licensee Hargray Wireless already has jumped into fixed wireless and considers the move a critical element in increasing overall penetration. Just one year into commercial deployment (Hargray launched mobile service in April 1998), the service provider began offering fixed-wireless services throughout its coverage area (Georgia and South Carolina) in April 1999. A few months later, Todd Pence, Hargray Wireless general manager, said, "Quite frankly, there's not much to it."

The service provider simply installs a Qualcomm terminal (QCT 6200 or QCT 1200) at the customer site. The 6200 terminal plugs into the electrical outlet and plugs into one existing phone jack in the house. Then, multiple phones can work on the wireless system. It creates a dial tone and is transparent to the customer. The main challenge with the 6200 is making sure customers understand they must physically disconnect the phone company's line to the phone interface. If the line still is connected, the unit will be damaged. According to Pence, installation is easy as long as the line is disconnected. When the 6200 is installed correctly, it connects all existing phones to the fixed-wireless network.

The 1200 terminal acts just like one desk set or individual phone. You plug it into an electrical outlet, and it's ready to go. Once connected to the wall, the 1200 serves as an individual phone rather than connecting multiple phones to the fixed-wireless network. Often customers buy the 1200 unit as a second phone for a teenager's room.

Currently, Hargray sells the Qualcomm terminals for about $100. Although they cost more than most standard home phones, Pence said it has not been an issue because customers look at it as comparable to the cost of a wireless phone. He added that just 90 days into its launch, prices started dropping, and over time that trend will continue. In addition, service rates already are priced comparable with landline service.

Hargray offers three types of fixed-wireless service: prepaid, business and residential. Each has a different rate structure to accommodate targeted market segments. Residential fixed-wireless packages adjust to customer usage with unlimited minute plans ranging from $20 to $40.

Similar landline packages in the Beaufort, SC, market average $63.71, according to a Hargray press release. Unlike landline service in Beaufort, Hargray does not charge measured long distance for calls to Hilton Head and Ridgeland, SC, and Savannah, GA. Fixed-wireless long-distance rates are 10 cents per minute anytime, anywhere in the United States. Standard packages include features such as voice mail, caller ID, call waiting, call forwarding and 3-way calling.

Hargray's prepaid option is popular for families that want a second or third phone for teenagers. For $50 a month, customers receive unlimited local calling in Hargray's wireless-service areas (12 counties today, eventually 19 counties). The local phone company only offers local calling to one county.

Although Hargray initially targeted businesses for fixed-wireless service via direct mailers and advertising, Pence said the service has become attractive to all user levels. In fact, its prepaid service has become the most popular, overtaking its number of business users. Basicresidential packages also are gaining momentum as advertising increases and people start understanding the service better.

Hargray is using a variety of marketing venues including newspaper ads and radio spots to increase awareness. Word of mouth also has played a big role in pushing potential customers to visit stores. So far the biggest challenge has been explaining the service to customers. Employee and customer education has become the key to success.

"As we get better educated, it gets easier to sell and explain," Pence said.

Moving Forward
Although Hargray won't publicize subscriber numbers, Pence said its fixed-wireless service is taking off.

"It's doing really well," he said. "We are pleased with our internal targets."

That doesn't mean the service provider isn't prepared for a few bumps along the way.

"We're tracking (the service) daily to see how it's doing and to see if we need to make any adjustments," Pence added. "We've tested it, and it works fine. Nothing is ever perfect. There is always something you didn't think about, but we haven't seen any major problems."

Other service providers that have tackled the fixed-wireless arena haven't been so lucky. AT&T Wireless and Western Wireless, for example, have struggled with cost issues and have had to face resistance from LECs. But according to Pence, these issues have not affected Hargray's deployment. The local public-service commission still considers it a wireless unit, and Hargray hasn't had to address any additional CLEC guidelines or issues.

"We haven't had any regulatory problems at all," he said.

And how are the LECs reacting to this new competition?

"No one has given us a hard time about it," Pence said.

Of course, that may have to do with the fact that its parent company, Hargray Communications Group, is the LEC in some of its fixed-wireless deployment areas. The company considers fixed wireless a complementary service offering. Traditional wired service benefits some people, and fixed wireless benefits other people. If a customer says, "I can't call Savannah toll free," Hargray responds with, "Try our fixed-wireless unit, which allows you to do that."

"It's a complement and just another product line and service offering to our customers," Pence said. "So if (Hargray) landline loses customers to fixed wireless, the customers are still with Hargray instead of with someone else."

Hargray Communications Group has positioned itself as a full-service company, including local service, long distance, paging, Internet, wireless and fixed wireless. It is taking advantage of that position to bundle wireless offerings. For example, the fixed-wireless business package includes unlimited local calling for $50 a month and 10-cent long distance. But when a business uses more than 2,000 fixed-wireless minutes, its mobile-wireless rates drop to the same as its fixed-wireless, including 10-cents-a-minute long distance instead of 15-cent long distance. Similarly, a residential customer who uses the $40 unlimited fixed-wireless service receives a 10% discount off local airtime and 10-cent long distance on its mobile wireless service.

Hargray looks at the addition of fixed wireless as a way to increase customer loyalty and reduce churn, because customers can go to Hargray for a home and mobile phone, and get one bill, additional discounts and good customer service. But Pence admitted fixed wireless is not yet able to compete with landline service providers from a data standpoint. It still has to contend with the low data speeds inherent in a wireless network. As a result, it promotes the service for voice use only.

"We don't try to oversell the product," Pence said.

As wireless-data speeds increase, he expects there will be more opportunities to completely replace the local service provider. Already, Pence said, customers would like to use Hargray for all of their communications needs.

"But we can't supply the data (capabilities) right now," he said.

Today, customers are using Hargray's fixed-wireless service at various levels. Many business and residential customers already use fixed wireless to replace their LEC voice service but keep landline for data or Internet. Other customers are keeping their current voice and data services, but go to Hargray instead of their current local provider for a second phone.

Demanding a network to support primary voice communications is asking a lot of such a young network, not yet fully deployed. But Pence said capacity has not been a problem and should never be a reason to delay such a deployment. Supporting higher usage is just part of operating a wireless network today. Every service provider must adjust network development to support the increased call volume that goes with offering tons of minutes for affordable rates, regardless of whether it offers fixed wireless.

"We don't want to say we won't offer this product, because six months down the road we won't have the capacity," he said. "You always want to get the system operating to make sure you have enough capacity to handle what you do."

If an alternative to landline service is the goal, and data is not a possibility, why not just position traditional wireless service as a primary communications device and urge customers to use their mobile phones at home?

"That's fine," Pence said. "But if you're home and get a call, you want more than one extension. They (other service providers) are doing unlimited portable, but wireless has different uses and needs. Someone may want five different phones, a speakerphone or want to pick up more than one extension. (Fixed wireless) is just another way for people to use home phones. It's just another product offering to give customers what they want ... One thing we've learned is that people like phones for different purposes. You can't always assume what customers want."

With that in mind, Hargray has wasted no time in pledging to meet those needs. While larger companies are "over analyzing the issue," Pence said smaller service providers are able to make decisions and move forward quickly.

"Bureaucracy makes it impossible to roll out (new services)," he said. "Small companies have to survive, so we're being pro-active. A lot of people don't understand fixed wireless and aren't sure (about it). But it is coming, and it is going to get bigger. We want to attack on our terms, so the other guys say, 'What are they doing?' We like to be pro-active vs. reactive. In wireless that's what you have to do to be successful."

Todd is TelecomClick content director.