Wireless carriers do some bonding

U.S. wireless carriers offering high-speed phone service are starting to strike deals so customers can access e-mail or download games in parts of the country their own provider has not yet reached.

These so-called roaming agreements are the lifeblood of the communications industry and have been a staple for decades. But the emergence of the roaming deals involving the new, higher-speed networks is the first sign that the same spirit of cooperation still rings true, even though the stakes are higher.

Carriers are spending billions to offer phone service at up to 56kbps, or seven times faster than what is available now. They all hope faster networks will increase customer satisfaction with their own cellular phone service, and lead to new revenue sources like game playing or downloading music videos.

"Yes, (the carriers) hate each other, but since they will all have holes in their coverage, it is more embarrassing than having to roam," said Roger Entner, an analyst with The Yankee Group. "All of these guys are hyping the service beyond belief. This way, they can mutually protect each other from backlash."

The first deal involving the high-speed networks was signed Thursday between Cingular Wireless and VoiceStream Wireless. Subscribers to Cingular's Wireless Internet Express service, which is now in just a handful of states, can use VoiceStream's high-speed network in every state except California and Nevada.

VoiceStream customers will be able to access the company's I-Stream service in Las Vegas using Cingular's network, and will be able to do the same in North Carolina, South Carolina, eastern Tennessee and coastal Georgia in the next month. These are portions of the country where the high-speed network VoiceStream launched Nov. 14 has not yet reached.

More carriers are expected to sign similar agreements in the next few weeks. AT&T Wireless will likely team up with VoiceStream and Cingular, said Jane Zweig, an analyst with The Shosteck Group.

Representatives for VoiceStream and AT&T Wireless did not return calls for comment Thursday.

All three carriers are in the process of launching new phone networks using GPRS (General Packet Radio Service) technology. Each carrier also intends to have its own network to cover the entire country.

"Let's be honest--there will be holes in the network," Zweig said. "So they will have to rely on each other for coverage in areas where they haven't got a GPRS unit."

Terry Durand, Cingular's executive director of technology, insisted that all the carriers supporting GPRS are interested in doing these types of deals.

"Of course, we want to take advantage of those carriers we can do this with," he said.

But the roaming agreements are also taking on an added level of significance for carriers.

The billion-dollar construction projects are putting a strain on carriers' finances, causing them to drop their competitive attitudes and work together, analysts say.

For instance, Cingular's upgrade of its network may end up costing the nation's second-largest carrier $4 billion--about $1 billion more than it expected. However, Cingular and VoiceStream announced in mid-October that they plan to share some of the costs to upgrade their networks.

"There are levels of hatred," Zweig said. "From a competitive standpoint, they need to love each other and hope the GPRS world takes off."