Subject: [NEXTEL-1] Hot competition spurs new trends Carriers rolling out services

From: Marcel <[email-masked]>
Date: Mon, 14 Apr 2003 20:39:12 -0400

Hot competition spurs new trends Carriers rolling out services
By Peter J. Howe, Globe Staff, 4/14/2003

Raging competition in the wireless telecommunications industry is spurring
services way beyond free nights and weekends and sexy new handsets. Consumers
are seeing pictures on phones, more walkie-talkie services, and a growing push
to get landline customers to go all-wireless.

As industry analysts look ahead to competitive battles this year, another key
issue could be a long-delayed federal mandate that would let cellphone owners
keep their own phone number when they switch carriers. The move, set to finally
take effect in November, could potentially unleash a wave of millions of
disgruntled subscribers jumping from carrier to carrier.

Wireless carriers who have battled the switch will be in federal court tomorrow
proposing to raise the ante: They want landline carriers to be required to let
customers keep their old home or office number when they sign up for wireless
service. That could turbocharge the small but growing trend of Americans using a
cellphone as their only phone.

The multiple competitive fights take place against the backdrop of a slowing
industry. More than half of all residents of Greater Boston and the United
States now own a cellphone. The industry added just 6.2 million customers in the
second half of last year. That 4.6 percent growth rate was the slowest since the
launch of US cellular service in 1984, according to the Cellular
Telecommunications & Internet Association.

''Wireless carriers are facing the clear and present danger of competing
themselves to death,'' said Roger Entner, wireless and mobile services program
manager with the Yankee Group in Boston.

Many carriers have in recent months begun stabilizing prices to slow down what
has been a fierce price war. Still, they are finding plenty of other ways to
compete vigorously. Here's a look at a few key trends for this year:

Pictures. US carriers generally began selling handsets with full-color screens
only last summer and fall. But already players such as AT&T Wireless and Sprint
PCS are exploiting their capabilities to push new services, including phones
that can take and transmit digital photos with built-in cameras or keychain-size
attachments. They are hoping the services prove as popular here as they have in
Japan, where an estimated 10 million camera phones are in use, driving demand
for high-speed data services.
Jeff Hallock, senior director of consumer marketing at Sprint, said owners of
its camera phones, such as the $350 Sanyo SCP-5300, are now sharing an average
of 14 pictures a month. Sprint six weeks ago launched a slide-show news offering
called 1KTV, which for $4 a month gives viewers 60- to 90-second news, sports,
entertainment, and weather broadcasts with stamp-size color images accompanying
narrated news. Sprint is rolling out two more camera phone models this spring.
Verizon Wireless earlier this winter launched a $5 service offering access to
Web cams through certain models of cellphones. It hopes to see markets evolve
for people using their phone to check traffic cameras, home ''nanny cams,'' or
even units that show the backup at a car wash or fast-food drive-through.

Walkie-talkie. Nextel Communications, with average monthly revenues approaching
$70 per subscriber and the industry's lowest rate of ''churn,'' or customer
loss, has become the envy of other carriers that credit much of Nextel's
popularity to its ''Direct Connect'' walkie-talkie feature.

Verizon Wireless, Sprint, and AT&T Wireless all say they expect to launch trials
or offer similar services within a year. Vendors such as Wakefield-based
Comverse Technology Inc. and the European troika of Ericsson, Nokia, and Siemens
are offering systems they say would allow people to connect directly to
subscribers from multiple carriers, not just within a one-carrier system like
Nextel's.

Nextel is countering by expanding Direct Connect from regional markets to cover
coast-to-coast US direct calls by this summer. It has highlighted predictions
that other carriers' services might take several seconds to connect initially.

''My sense is that we will be able to deliver a service that customers will find
very usable, moving well beyond a certain carrier's proprietary technology,''
AT&T Wireless chief technology officer Rod Nelson said.

Number switching. Nov. 24 remains the stated Federal Communications Commission
deadline for wireless carriers to adopt the same ''local number portability''
system that landline carriers such as Verizon and SBC have adopted to let
residential and business customers moving to competitors or cable telephone
systems keep their old number.

After repeatedly getting the FCC to delay, the Cellular Telecommunications &
Industry Association and big carriers have sued. They say the change could cost
them $1 billion or more that could generate much more effective competition
invested elsewhere in better service or supporting efforts to add 911 location
services to cellphones.

Because carriers now spend as much as $300 just to get a new customer, any
change increasing carrier-switching by customers could shred already anemic
profits for the industry. Just who emerges as the biggest losers remains
unclear, but some analysts cite Cingular and Sprint PCS as companies with weak
customer satisfaction records that could face big net defections.
Tomorrow, the CTIA and carriers will be arguing the FCC lacks authority to
mandate the change, but if it does, it should apply it to people switching a
home phone for a wireless phone.

Andrew Cole, a senior vice president of wireless with the Boston consulting firm
Adventis, estimates landline carriers are already facing an $18 billion loss in
revenues by 2010 from replacement of home and office lines with cellphones.
While Verizon and other Baby Bells already own stakes in wireless -- SBC and
BellSouth have a 60-40 split of Cingular, for instance -- other wireless
carriers with no landline stake are likely to step up efforts selling units to
connect home phones to a wireless account over the next two years, Cole said.

''Wireless displacement is something the big carriers are all getting very
worried about,'' Cole said. Already, it is estimated that about 3 percent of all
Americans use a cellphone exclusively, he said, and ''there's a huge youth
market that is more likely to cut the cord.''

http://www.boston.com/dailyglobe2/104/business/Hot_competition_spurs_new_trends+.shtml

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Get a FREE REFINANCE QUOTE - click here!
http://us.click.yahoo.com/2CXtTB/ca0FAA/i5gGAA/61FxlB/TM
---------------------------------------------------------------------~->

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/