March 21, 2004 9:00 PM PST

U.S. carriers pick up the 3G pace

U.S. cellular carriers, which lag way behind European and Asian counterparts in offering wireless broadband, are set to unveil several initiatives on Monday to help them catch up with overseas companies.

AT&T Wireless, under pressure from an arrangement with part-owner NTT DoCoMo to introduce wireless broadband in four U.S. cities, is expected to announce at the CTIA Wireless 2004 show that Motorola, NEC and Nokia will supply it with camera phones for those third-generation, or "3G," wireless networks by year's end. That's a major step toward offering services like video streaming in the cities in question, which are likely to be San Francisco, Seattle and two other markets, executives noted.

Verizon Wireless, the largest U.S. cellular carrier, plans to make several announcements about BroadbandAccess, its wireless broadband service, at the conference. Vendors of equipment for cell phone networks expect that Verizon will say which company it wants to supply gear to expand the service, which is undergoing trials in Washington, D.C., and San Diego.

In addition, Nextel Communications is expected to unveil more details about a wireless broadband service trial it is conducting in North Carolina. The trial uses technology from Flarion Technologies that is capable of ferrying wireless data at 1.5 megabits per second, compared with Nextel network's current rate of about 20 kilobits per second.

"We're looking at this because it's fast, disruptive and efficient," Nextel CEO Tim Donahue said recently.

After five years of famously slow progress, 3G networks that use standards with cumbersome names such as UMTS or W-CDMA are now available throughout the United Kingdom, Germany, Austria, Japan and Korea. Carriers such as T-Mobile and 3 in Europe, and NTT DoCoMo in Japan, are using the technology, which operates 50 times faster than present-day cell phone networks. They use it to boost network capacity, to improve coverage areas, and to offer new services such as 2.4-megabit-per-second wireless broadband.

But carriers in the United States have lagged behind, mainly because their attention has strayed to more pressing issues, such as the November 2003 deadline to let cellular subscribers keep their telephone numbers when switching carriers. The slow economy also didn't help, according to Steve Largent, the chief executive of the Cellular Telecommunications & Internet Association, a lobbying group for the cell phone industry.

"It's been a slow rollout in the United States," he said. "It's been difficult to show a sustainable business model for that amount of capital investment."

Carriers have their eye on the 3G prize because, as a whole, they're counting on future sales of data-oriented services to make up for plunging revenue from voice calls. Once faster networks are in place, carriers can initiate their plans to sell broadband in areas overlooked by cable or DSL providers. Analysts forecast they will bring in a few hundred million dollars in extra revenue, once they do. The first wireless carrier to reach 3G is the first to begin earning that revenue.

"Timing is everything in this market," said Lawrence Babbio, Verizon's vice chairman.

Let there be music
But not all carriers' attention is on their networks.

Cingular Wireless, the No. 2 U.S. wireless provider, plans to announce several new initiatives designed to help it absorb the 22 million subscribers it will pick up if its plans to buy AT&T Wireless by the end of the year are successful.

It will unveil the Cingular Service Summary, which spells out the terms of service contracts to new customers in an easy-to-understand way. The carrier also intends to let people find out how many minutes they have left on a contract by pushing the star button followed by the letters M-I-N on their phones. They can also sport scores read over the phone by pressing B-A-L-L.

At the CTIA show, Sprint Communications will introduce phones and services involving music and other entertainment, according to a Sprint representative. It will also make the debut handsets with advanced audio capabilities, plus an upgrade to its picture-mail service, which is one of the surprising success stories of the industry in the past year.

 

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