At Year's End ...

Third-generation innovations, bitter price wars, prepaid growth and mergers dominated 1998's highlights. The year 1999 offered more of the same, but with greater frequency. Wireless high-stepped its way from telecom time to Internet time. Complementing these highlights, breakthroughs in wireless data practically became commercial realities, causing many to cautiously wonder if this was, could it possibly be, wireless data's big year ... finally?

Andrew Cole, Renaissance Worldwide head of wireless practice, awards a gold star to Sprint PCS for its bold offering -- Wireless Web. Although the service may not be the penultimate in wireless Internet surfing, it is a smart first step.

"Wireless Web is a major step forward," Cole said. "While the United States is still tiptoeing in data, it is a great service, and Sprint PCS has been able to leverage what is a great technology in CDMA."

The service uses the NeoPoint 1000 handset. NeoPoint helped accelerate data by making its NeoPoint 1000 handset a user-friendly form factor.

"That is the principle of data development," he said. "Data needs simplicity, and that is what is encompassed in Wireless Web."

Steps by other vendors helped data blossom in 1999. In addition to Phone.com's developments in wireless portals with MyPhone, the Palm VII, a data-only terminal with wireless data connectivity, was an important innovation. Phone.Com's WAP progress and its microbrowser also have been major steps forward by making data devices interoperable and allowing users to access the Internet via phones and small devices, Cole said. MyPhone provides the opportunity to rapidly offer subscribers mobile-optimized services through its own branded mobile portal.

As a whole, the industry took other great strides to make wireless data more of a reality than ever before. "The standards bodies moved from frostiness to at least being amicable and on speaking terms," Cole said. "With regard to 3G, there is a lot of progress there. The United States is making steps with its view of letting the market decide. The industry was able to come up with a compromise to 3G, and that is a good thing going forth."

In 1999, 2.5G became a reality -- a little more than 2G, not quite 3G -- as carriers experimented with ways to get more juice out of 2G.

"The only down side at the end of the day is that 2.5G might delay some carriers in jumping to 3G in America, while their European counterparts jump headfirst into 3G," Cole said.

Whenever there is talk of a merger, people in the company worry about job security. But what about contracted employees? If the Omnipoint-VoiceStream merger goes through, will it ruffle Jamie Lee Curtis' feathers if the company retains Omni the parrot as the company spokes-bird? Will Omni go psycho if Curtis keeps the position? Omnipoint has built up brand awareness with Omni, who appears in all types of advertising. On the other hand, Curtis is VoiceStream's national spokesperson. Perhaps the two will join up in a future ad campaign -- Omni's voice is so clear over the Omnipoint network that Curtis, ready for her blind date, does not know he is a parrot.

Closing out 1999, Wireless Review asked carriers what their shining moments were during the past 12 months.

MERGER MANIA Aerial Communications' planned merger with VoiceStream Wireless will form the largest national GSM player. It offers some of the largest network-coverage areas in the industry. Alltel's growth through mergers and acquisitions caused an increase in customers in existing markets. SBC Wireless' acquisitions of Cellular Communications of Puerto Rico, Comcast Cellular (Delaware, New Jersey and Pennsylvania), and Ameritech Cellular (Indiana, Michigan, Ohio and Wisconsin), helped the company increase its domestic wireless subscribers by 24.7% to 10.3 million. The Vodafone-AirTouch merger created one of the world's largest wireless communications firms with mobile operations in 23 countries on five continents and more than 31 million proportionate cellular customers. The company also is planning to merge with Bell Atlantic.

PERFECT PRICE PLANS AT&T introduced calling plans, including AT&T Personal Network, AT&T Group Calling, AT&T Family Plan and AT&T Personal News. It continues to offer an array of mobile-computing applications in areas such as public safety, fleet management, and field and financial services. Dobson Cellular Systems, which doubled in size this year, successfully integrated its newly acquired northeastern markets. In many of these markets, it launched TalkUSA flat-rate plans and prepaid products. GTE Wireless helped customers simplify their lives with no-toll, no-roaming calling plans; "chill, no bill" prepaid service; "got phone, got office" with wireless e-mail and Internet services; and simpler bills. Powertel's local and nationwide postpaid price plans and economic prepaid service generated strong customer response: Net subscriber additions were up 35%. PrimeCo improved its prepaid program by launching AdvancePay, which bundles everything, including domestic long distance.

HI-TECH HEAVEN BellSouth's cellular and PCS operations continued their strong growth in customer numbers, POPs covered, revenues and profits. Rapid conversion of its customer base to digital service continues -- more than 70% of minutes of use now are digital. BellSouth also introduced mass-market wireless data services via the Research-In-Motion interactive pager and Palm VII devices. Centennial Wireless deployed digital technology and introduced new digital rate plans. CenturyTel deployed digital technology in nearly 100% of its MSA markets. The company stands ready to receive additional revenues through enhanced services and features. Omnipoint provided effective international roaming. The company also is closer to its 2000 launch of packet data, and it effectively upgraded various customer-care systems. Rural Cellular co-created an E-911 Phase II solution, which will make it possible to pinpoint wireless users in need of emergency assistance. US West was awarded the Financial Times Global Telecoms Award for best total service portfolio and best use of enhanced integrated network solutions. The company offers 1-number service, which includes one mailbox, one bill and the same look and feel as wireline service.

SKYROCKETING SUBSCRIBERS Sprint PCS led the wireless industry in subscriber growth for the past four quarters, adding more than 2.9 million customers in that period. Bell Atlantic Mobile continues to better its margins each quarter. It increased total revenue per subscriber by 2.3% to $53 dollars in 3Q99. The company expects to further benefit with the combination of Vodafone AirTouch and the GTE merger.

This year proved every cliche: Two steps forward, one step back. Win some, lose some. Good news, bad news. When developments are moving at such cataclysmic Moore-like speeds, you can't always hit home runs. This year's major events showed both sides of the coin.

POINT * AT&T's Digital One Rate plan changes the wireless industry. Carriers everywhere jump to offer similar flat-rate plans.

* The FCC postpones wireless number portability. Carriers convince the FCC that the forbearance of LNP obligations best serves the public and the development of a competitive wireless marketplace.

* The FCC allows Western Wireless to obtain universal-service funding when using wireless broadband in rural areas to provide service.

* The Yankee Group reports that 90% of wireless users are "satisfied" with their customer-service experience.

* IBM and other Fortune 100 companies select Iridium's North America gateway to coordinate special contingency telecommunications plans for events such as Y2K.

* CTIA reports 76,284,735 wireless users, up from 60,831,431 one year ago.

* Congress and President Clinton sign the Wireless Communications and Public Safety Act of 1999. The new law promotes using one number, 911, to summon help in an emergency.

* The FCC rejects three of the nine CALEA punch-list items, including surveillance status, continuity check tone and feature status.

* CTIA commits $25 million over six years to support research on the health effects of RF exposure. Wireless Technology Research, led by Dr. George Carlo, administers the funds to universities, scientists and independent research laboratories.

* Wireless industry increases charitable community actions, including donations to homeless and domestic-violence victims.

COUNTERPOINT * An AT&T switch crashes in New York due to capacity constraints, and AT&T's 3Q99 subscriber growth is only 269,000, compared with 473,000 in 2Q99 and 325,000 in 3Q98.

* Congress investigates whether the FCC approved the transfer of bankrupt NextWave licenses to Nextel and granted ownership waivers in a confidential spectrum agreement.

* During the C-block re-auction, the FCC does not relieve C-block licensees who paid full price for licenses during the first auction. Airadigm files for reorganization under Chapter 11 and Southeast Telephone goes out of the PCS business when it can't make a payment.

* The Yankee Group reports that only 43% of wireless users are "very satisfied" with their customer-service experience.

* Iridium files for reorganization under Chapter 11.

* Rude and careless wireless users draw negative attention, getting wireless phones banned from theaters and restaurants, and generate criticism about using phones while driving.

* The FCC rejects the wireless industry's request to eliminate the spectrum cap. FCC raises the cap to 55MHz in rural areas, while maintaining a 45MHz cap in urban markets.

* The FCC concludes that six of the nine punch-list items fall within CALEA's scope.

* Carlo appears on ABC's 20/20 to say it can no longer be presumed that cellular phones are completely safe.

* Prepaid plans, for subscribers that are considered credit-challenged, still cost much more than postpaid plans.

During 1999, Wireless Review's Mystery Caller uncovered frightening holes in customer communications about wireless service. Over the last 12 months, Wireless Review has reported actual phone conversations with wireless carriers about service. Some conversations were humorous while others were alarming in their inaccuracy. Here are the top 5 picks for the most disturbing responses:

GSM DYSLEXIA WR: Can I use my phone anywhere in the country with your service?

CSR: We don't have roaming agreements in some places. Some cities are not set up for GMS. We are on the GMS system, and all cities are not set up for GMS.

INTERFACE INTRIGUE WR: What is the difference between CDMA, TDMA and GSM?

CSR: TDMA ... is generated through what is called time development management ... CDMA is code development management ... The TDMA system allows the system to be able to hold three calls at one time; it is like an old system. CDMA allows the system to hold 10 calls at one time.

GEOGRAPHY LESSON WR: I am looking for service that I can use in England.

CSR: What I need to find out is are you speaking of New England, the country?

ACCOUNTING 101 WR: When you use a landline phone, calls are free after you pay a monthly service charge. Why is it more expensive to use a wireless phone?

Sales Rep: Because it is wireless, and you are not using ... a regular phone (where you have a lot of hookup and cables). OK, whereas a wireless is just like it says. Wire. Less. No wires. It is all going by fiber optics.

Y2K NOT OK WR: Will my phone work on Jan. 1, 2000?

CSR: I am going to be honest with you, I really don't know. I need to know, too. I have one also. I pay a bill, too. So I need to know also. I mean, we don't know. I am going to be honest with you. We don't know. I wish I could give you more information, but I really just ... don't ... know.