Posted: 01/2000
Carriers Help Customers Cut Cord
By Shelly Tyler
Service providers are looking to differentiate their services, reduce churn, increase average revenue per user and attract new, high-value customers. One way carriers can achieve all these goals is to offer their business customers wireless office services. Wireless office customers are "golden customers" because they demand and require anytime/anywhere communication. For this reason, the wireless office concept is gaining momentum and many manufacturers and service providers are developing ways to bring it to market.
In-building wireless systems allow workers to utilize portable phones within a building or campus and still receive all the functionality of a corporate PBX, key/hybrid phone system or Centrex. In-building wireless, which allows workers to move freely throughout their work environment receiving and placing calls, is especially attractive to the education, health care, retail and manufacturing sectors that have highly mobile employees; however, all business segments will want in-building mobility in the future.
Such in-building wireless systems have been around for a few years, but until this year, their appeal was limited for several reasons. The systems were expensive and faced hand-off problems between base stations, and there wasn't a digital in- and out-of-building solution. The introduction of new digital systems, however, that have improved reliability and voice quality, coupled with the support of top wireless carriers including AT&T Wireless Services Inc. (www.att.com) and BellSouth Cellular Corp. (www.bellsouth.com) will increase the popularity of these services in the next few years.
All of the licensed wireless office systems operate at either 800mHz or PCS 1.9gHz, and are produced by one of three manufacturers: AG Communication Systems (AGCS), a subsidiary of Lucent Technologies Inc. (www.lucent.com); Ericsson Digital Wireless Office Services, a division of Ericsson Inc. (www.ericsson.com); and Hughes Network Systems (www.hns.com). All of these systems currently use time-division multiple access (TDMA); however, AGCS also produces an advanced mobile phone service (AMPS) product.
AGCS marked its first shipments of its ROAMEO TDMA wireless office telephone system in the second quarter of 1999. Ericsson also started shipping its wireless telephone system in October and Hughes Network Systems expected to start shipping its AIReach Office product in the first quarter of 2000.
How It Works
AGCS', Ericsson's and Hughes Network Systems' digital TDMA wireless office telephone systems all work essentially the same way. The system consists of a controller that connects to an existing PBX, key system or Centrex as an adjunct. The controller administers PBX line termination, call processing and maintenance. Base stations are placed throughout the building to transfer calls from the wired phone system to employees' mobile phones. Sometimes companies also install antennas to extend coverage over a large area.
When employees are in the office, all incoming calls are routed automatically to the office telephone system. Both the employee's desk phone and the cell phone ring. Users can enjoy all the standard features of wired desksets on their cell phones including call transfer, call forward, conference calling, call waiting and three-way calling, to name a few.
When users are outside the office, the wireless office telephone automatically redirects incoming office calls to the outside wireless (macro) network if the user's handset is active in it. Businesses can choose which employees they want to have macro access. If a business does not want a particular employee to use his or her handset outside the workplace, it can restrict the employee's handset to work only inside the building or campus. Employees can set up their own accounts with wireless carriers to be billed separately for their personal macro network usage--an added feature for employees since they do not have to pay a monthly service fee.
Businesses buy the controller and base stations from the manufacturers--AGCS, Ericsson or Hughes Network Systems--and the handsets from their wireless carriers. Generally, wireless carriers charge businesses $5 to $15 a month per user for unlimited in-building wireless use. Businesses then can set up service plans for each employee that best meet their off-campus wireless needs based on their job function.
Wireless Licensed Handset Shipment Forecast
Wireless Centrex
Nortel Networks (www.nortelnetworks.com) is in the final stages of testing a future opportunity for many wired carriers to reap the benefits of wireless office solutions. Nortel Networks' DMS-100 Integrated Wireless Centrex integrates Nortel's DSM-100/200 wireline and its DMS-Mobile Telephone Exchange (MTX) wireless switching system into a single platform.
Nortel's Network's DMS-100 Integrated Centrex Solution provides businesses with a wide range of features including the corporate VPN calling plan, and basic Centrex features such as calling line ID, three-way calling, and call forwarding. The DMS-100 Integrated Centrex Solution enables employees to move around their building or campus and also leave the building and enter the public wireless network.
Nortel's Integrated Wireless Centrex is highly flexible and accommodates a number of scenarios. Wired carriers that do not own licensed spectrum can either choose to offer either the wireless Centrex as an in-building/on-campus solution only, or they can upgrade their DMS-100/200 or add a DMS-100 and work with a wireless service provider to offer out-of-building wireless coverage. Wired-line carriers that do own 800mHz or 1900mHz spectrum can upgrade their existing DMS-100/200 switching system to provide in-building/out-of-building wireless Centrex service.
Centrex operators can provide in-building/out-of-building wireless services by working with wireless carriers, who should be willing to work with Centrex providers because they want access to wireless office customers. Highly mobile business customers are the most valued customers for wireless service providers because they use thousands of airtime minutes a month and use value-added services that mean large profits to wireless carriers.
Since cell-site controllers and wireless networking interface equipment are located at the CO, the customer's equipment needs are reduced. The DMS-100 Wireless solution supports code-DMA (CDMA), TDMA, and AMPS technologies at both 800mHz and 1900mHz. This product was expected to be generally available by December 1999.
Other Developments
Nortel Networks is currently introducing its PicoNode in Europe. This product will be available in the United States in early 2000. This wireless office telephone system is similar to the systems mentioned above developed by AGCS, Ericsson and Hughes. However, instead of using TDMA, this system relies on global systems for mobile communication (GSM) for the radio. This system can be deployed either as a standalone unit or as an adjunct to a PBX. In October, Nortel Networks announced that BT Cellnet, United Kingdom, would begin offering this product to its customers. Nortel Networks' PicoNode is a unique product that incorporates a GSM switch, base station controller and base transceiver station in one package. This product enables calls to be switched locally instead of transmitted to remote mobile switching centers.
Ericsson also is developing a wireless office solution for GSM carriers in both the United States and Europe. In the United States, Powertel (www.pcs.org) and Pacific Bell Wireless (www.pbwireless.com) are testing their GSM on the Net solution, which combines GSM wireless communications with Internet protocol technology, and the University of California, Berkeley (www.berkeley.edu), is testing open interface applications to use with the system. GSM on the Net essentially creates a mini, private GSM network by integrating GSM wireless communications into a LAN/intranet environment to offer voice, datacom and video. The GSM voice traffic is transported as IP packets. Users will be able to use PC phones, multimedia terminals or fixed IP phones. This service, which is expected to be available in the first quarter, will give carriers new integrated computer and telephony services they can customize to businesses and vertical market applications.
Wireless office, in-building wireless and wireless Centrex will become an integral part of the success and failure of cellular carriers in the next few years. Offering wireless office services currently gives carriers an opportunity to differentiate themselves to achieve a competitive advantage, but in the future, the lack of a wireless office solution will make carriers vulnerable to losing key customers and profitability.
Shelly Tyler is an analyst at The Phillips Group-InfoTech (www.phillips-infotech.com), a worldwide consulting firm specializing in strategic solutions for corporate clients in the telecommunications and information technologies industries. She can be reached at +1 973 884 0100.
