James A. Murrell, III is Chairman of the Data Committee of the North American GSM Alliance, a group of US and Canadian digital wireless PCS carriers for more than two million customers. Murrell is also the Vice President of Business Development for Powertel, Inc., headquartered in West Point, Georgia. PDT: What progress has been made in the last year in terms of overall build-out of the GSM network in North America? JM: One of the most significant accomplishment for 1998 has been exponential GSM network expansion. GSM signal now covers more than 2400 cities and towns in 43 U. S. states, the District of Columbia and four Canadian provinces. This is approximately 60 percent of the population in North America, and includes networks managed by 23 licensed GSM carriers. Most carriers can provide dual mode service -- digital PCS supported by analog -- with coverage to over 90 percent of the U. S. population today. Over the past year, more than 3,000 transmission sites were added to make this level of coverage possible. The GSM network in North America now has a total of 10,452 transmission sites. This rate of expansion should continue well into next year.
PDT: How widely available are GSM data services in North America today in terms of covered population? JM: GSM network services now cover roughly 260 million people, or 60 percent of the population of North America. Of that number, I'd say conservatively that 90% now have data services available, based on the fact that all 15 Alliance members have launched data services. However, not all carriers are actively marketing their data services to customers yet, because their billing systems are just coming on line. But now that data is being more proactively marketed as a core GSM capability, customers should hear about it soon.
PDT: Of the more than 2.3 million GSM customers in North America, roughly what proportion use data services today? JM: My best guess is around 2 percent, but there is no way to get an exact reading since data is so new to North America and each carrier's public disclosures are not yet consistent.
PDT: The Alliance recently launched data to the public. But most Americans are only familiar with the voice capacities of cellular phones. How will data capabilities be promoted more widely? JM: Increased consumer education will lead to better understanding and eventually higher demand for data services. However, we must be careful not to promise more than we can deliver. First to be advertised and adopted will be the present GSM data capabilities, such as two-way short messaging, fax and e-mail. As the data rollout continues, interactive content and wireless commerce will follow. Some carriers are already offering push content and testing wireless commerce. It is likely that 1999 is the year for wireless data to share the limelight a bit with traditional voice services.
PDT: Will there be coordinated marketing efforts among Alliance members? JM: Yes, but quite candidly, we are somewhat late in this effort. Our first efforts have been to educate the trade media -- those reporters and editors who follow what we do and how well we do it. We don't want GSM's robust data capabilities to remain the industry's best kept secret. We have the advantage over competing technologies and services, and we should not be shy about boasting that we can deliver data now. Past delays have had less to do with being able to technically deliver data than with immature billing and other support systems not being ready to support the full suite of data services at launch. This has worked to the advantage of some data savvy business customers who discovered, to their delight, that they could not only use their PCS handsets to check e-mail, but also not be billed for the minutes. These folks are in the minority, but this does illustrate that some customers were hungry enough for the product that they found ways to use it even before it was commercially launched. Word has been spreading that data is available on GSM networks even though it is no longer free. Wireless data has been launched by all fifteen members of the GSM Alliance. More commercial launches of GSM data will be visible during the months ahead, as more and more services are marketed by carriers already on line. Data services will also benefit from a branding initiative by Alliance members. The GSM Alliance logo, to be found on everything from billboards to phone packaging, is drawing attention to our collective national presence. This common tie will help as we move to promote GSM data on a national level. The MDI (Mobile Data Initiative) and individual carrier web pages are also beginning to get the word out. All of this reinforces GSM as a sophisticated, mature technology. A group of public relations professionals from the Alliance is working with data experts to position the GSM message so that it reaches the right audiences during 1999. The initial target audiences include industry analysts, financial communities, governmental decision makers and the business consumer.
PDT: When do you think we might see growth in the United States of data service usage? JM: I think we will see a lot happen with data in 1999. When I speak of data, let's be clear: I mean data as a pipe -- two-way, circuit-switched -- where someone can do practically everything that is done now from a desktop PC on a portable notebook or laptop (admittedly at a bit slower speed). I'm not speaking of simple SMS (Short Messaging Service,) which has been in use since GSM was first launched in North America. The simplest wireless data features customers use today are fax and e-mail, but customers can and do use the GSM data pipe for a lot of other things. Any way you slice it, I believe the foundation has been laid for 1999 to be the year that we will use to benchmark wireless data achievements. At the end of the year, I am hopeful the industry can look back on some very meaningful milestones.
PDT: Current data rates are only 9.6 Kbps. We know there are ongoing trials to bring faster technologies such as HSCSD and GPRS in Europe and Asia. When can we expect data transmission speeds to increase in North America? Data rates will increase within the same time frame worldwide. Some systems may deploy HSCSD sooner than others, but availability of the core GSM technology enhancements will be generally the same for North America as it is elsewhere. Trials are being conducted concurrently.
PDT: Does that mean there are ongoing trials in North America? JM: I can not talk about specific pre-commercial trials. But I can tell you absolutely that HSCSD and GPRS will be introduced (from the carrier's perspective) as soon as we see an absolute market for higher speed and a bigger push toward universal information access. But I do not think we will have to wait until we are sure the market is ready before we deploy. You really have a chicken and an egg dilemma. If we are first to offer higher speed, it will be at a higher cost. If we wait, it may be too late to take full advantage of GSM's technology lead. Carriers are now working with manufacturers to find out what prices the market will bear, and the carriers are talking to their customers to determine the right time to enter the market. All of that is draped over later technologies like EDGE and 3G (third generation wireless). The timeline gets compressed quite a bit when you start thinking about the most optimistic view of 3G, and the most pessimistic view of HSCSD and GPRS deployment.
PDT: Which brings up the question - why would operators invest in HSCSD and GPRS, instead of waiting for third generation? JM: We're asking the same questions. If you want one answer for why, it will be because the marketplace demands it. But of course, that's only a carrier's perspective. We cannot simply be technology-driven; we must be market-driven to ultimately succeed. That is why I believe there is a heightened sense of urgency among manufactures to produce these so-called interim enhancements quickly. The market clearly wants higher speeds and better access, but not at any price. Let me say one more thing to add to that. The infrastructure itself might be in place and ready for such developments as 14.4 Kbps with tacked multiple time slots. It might also be ready for GSM packet data. But just as we've seen with things like SIM Tool Kit implementation this year, the networks can be ready long before handsets and software applications are there to support them. For instance, North American networks were ready to do dual-mode automatic roaming between GSM and traditional analog cellular systems before we could buy terminals to support the service. What I am saying is, if customers can't buy a dual-mode compatible handset -- one that works on digital and analog -- it doesn't make any difference if the network is ready. We had to have the whole system in place before the customers would buy it. The same thing will be true with HSCSD and GPRS. Time to market is critical.
PDT: Would there be a unified approach among Alliance members towards implementing those technologies, or would it happen on an operator by operator basis? JM: One of the great things about GSM as a technology is that it does have very rigid standards. That means if I implement something in the Powertel network, it generally works, for example, on Omnipoint's or PacBell's network. There are inevitably some differences in interpretations of the specs between manufacturers. Ericsson, Nokia, Nortel, Motorola and Siemens don't always make products that are 100% compatible in beta tests. Thankfully there is good cooperation in the GSM community of manufactures and carriers to easily work out these differences. So far, when we have gone to market with standard GSM products, compatibility has been almost universal. I do not expect any difference with the deployment of future additions to the GSM family.
PDT: A recent alliance press release said that the Alliance is endorsing the merging of two third generation W-CDMA flavors into one. What are the benefits of doing that? JM: We have always said that we're in favor of convergence of standards where convergence makes sense. And when we say that, we mean convergence that makes sense to the end user -- the person who is going to eventually be in the store buying a handset and wireless service. The GSM Alliance has never thought it made any sense for a customer's choice in the United States to be limited to phones that are more expensive and technologically inferior to those offered in the rest of the world. As it is today with second generation wireless, customers should be allowed to choose which technology offers the best value for them. What we've tried to say is that where it makes sense to converge standards, we will be in favor of converging standards. Where converge does nothing to improve the technologies, let the market place decide. Plainer than that: If some disagree that one standard is more robust than another, and many people do disagreed on that point, then let's let the customer decide who's right. The U. S. government has been correct in encouraging worldwide acceptance of this multiple standards view.
PDT: What are the implications of merging all standards for global interoperability? JM: You're going to have problems with interoperability no matter what is converged. I think that the main issues behind interoperability have more to do with spectrum and government allocations of spectrum than with the technology itself, because different countries operate on different frequency bands. As wireless devices and networks become more sophisticated and more capable, advances in technology will allow us to offer more sophisticated services across all 3G systems. As operators, we want to make sure that the cost of 3G is low enough that consumers won't experience sticker shock. Otherwise, they won't have a good reason to upgrade from what they use today. We hear a lot of talk these days about backward compatibility. Well, I'm not sure that being backward compatible is so wise if it sacrifices new innovations at the customers' expense. Interoperability among third generation GSM networks may be just as important as backward compatibility, but there needs to be balance.
PDT: It has taken a couple of years to build out to the current generation of GSM networks. When might we be seeing third generation technologies in this country? JM: I think we'll see third generation-like features beginning to emerge by the end of next year and some commercial trials of true 3G products by the end of the following year. I don't want to speculate beyond that.
PDT: Moving on to other subjects, how does roaming work among Alliance members? Are there agreement templates? JM: There is a roaming template that includes everything except rates. No one forces adherence, but structurally they make a lot of sense. The GSM shell agreements are all the same, so the language is common throughout our industry. This has helped us quickly launch both national and international GSM roaming very efficiently. On rates, however, everything we've negotiated so far has been bi-lateral at the wholesale level. Also, each individual carrier within the Alliance is responsible for its own pricing at the retail level. Most of us offer some form of national pricing with reduced rates to customers who travel extensively.
PDT: Overall, what would you say is the biggest challenge for the Alliance in terms of data? JM: Support systems such as customer care and billing are critical to the ultimate success of wireless data. Problems have been higher than expected because of the enormous success of the whole wireless industry. Employee and customer training is also a challenge. There just aren't enough experts to go around. Virtually everyone has grown much faster than our most optimistic plans. The real answer though, is education in general. Most people don't realize the power they have when they buy their GSM telephone. So we've not done a very good job of helping people understand how to use the phone as a conduit to get information from anywhere in the world, or to send information to anywhere in the world. Without knowledge of how powerful a GSM phone can be, customers won't realize the full value of the choice they made. Wireless data is not intuitive; most customers have to be taught. The challenge is not just getting people to understand how data works, but what applications are available to them that add value to everyday life. We need to teach business customers that the same applications they use in the office, such as voice conference calls, fax and e-mail, are easily accessible from their GSM phone. When a few customers in each market begin to use wireless fax and e-mail, others will notice and see the need. With the explosion of the Internet and growing penetration of PC in the home, the same message is needed for individual consumers. People in North America are mobile. When they realize things like fax, email, and basic information retrieval is available, easy to use, and affordable, I believe we'll see a domino effect. Soon support systems will catch up with data services innovation, and more and more customers will begin to understand the power and freedom wireless data brings. When it happens we can tell everyone. I told you this would be the year of wireless data.
PDT: One last question - what are the Alliance's plans for increasing the GSM footprint in the United States. beyond the metropolitan areas? JM: That's a fair question. When you look at PCS and how it was developed, the requirement for build out of PCS was based on population rather than geography. The reasoning behind that fundamental change, I'm told, was the need for more intense competition in the largest North America metro areas. With PCS, we haven't seen as many of the rural areas built out as we did in analog cellular era for two important reasons: first, the FCC ground rules changed from a geographic base to a population base and second, there are big differences in link budgets of RF propagation at 800 MHz versus 1900 MHz, no matter with technology is used. That is why many GSM carriers have entered the market by launching the largest cities and interstate corridors first. During the second half of this year, secondary cities have been built out to a much greater extent. There are many towns with as few as 20,000 population now covered by GSM. Although the Alliance has no official plan to acquire new licenses, there are many GSM carriers planning to participate in the FCC re-auction scheduled sometime in the first half of 1999. In addition, some of the smaller carriers have just launched in the last few months because they bought licenses in the basic trading area auctions held much later than the initial major trading area rounds, because of FCC imposed delays. Most of these new players have just finished their initial build-out, and a few have yet to launch. The GSM community should be able to sustain its current rate of growth through the next few years. That's a long answer to a short question, but I think build-out will continue at a very rapid pace. GSM is now available in more than 2400 cities and towns in North America. If you look at the way we have expanded throughout the U.S. and Canada from the first commercial launch to where we are today, GSM has grown at four times the rate the cellular analog carriers did in the same time frame.
PDT: Do you have any guesses when we might see as much as ninety-five percent coverage? JM: If you base that on population we may be there already. I am more comfortable predicting penetration on population than I am on geography. There are certain areas of North America that will probably never see a GSM signal because of signal propagation properties in our licensed frequency bands. But it probably doesn't make much difference, because when a customer goes into the wilderness it is usually to get away from the telephone. In any event, most GSM carriers now provide dual-mode service as an option for customers with remote coverage needs. I don't know whether that represents ninety-five percent or not. But with dual-mode now available to GSM no technology can legitimately claim footprint superiority, because analog cellular is the default of last resort for everyone. © 1999 Intel Corporation. Judith Berck is an employee of Intel corporation. |
