Business News – Independent AT&T Wireless on Track to Deliver 3G

Posted: 09/2001

Business News

Independent AT&T Wireless on Track to Deliver 3G
By Josh Long

After gaining its independence this summer, AT&T Wireless Services Inc. says it’s on track to launch third-generation mobile services beginning next year, giving its subscribers the tools to browse the web at lightning speed.

AT&T Wireless, which was split off from AT&T in July, began offering businesses in Seattle wireless services over a global system for mobile communications (GSM)/general packet radio service (GPRS) network that same month.

The network supports 2.5G speeds, the equivalent of a dial-up modem on a personal computer, says AT&T Wireless spokesman Ritch Blasi. Using a Motorola Inc. Timeport phone, businesses can access traditional features such as mobile Internet and e-mail access, two-way text messaging, voice mail and multiparty calling, as well as new services, including unified messaging and “always-on”, high-speed data service.

The service costs $50 for 400 voice minutes and one megabit of data per month. Subscribers who use more than a megabit per month will pay slightly less than a penny for each kilobit they consume. Blasi says the company expected to begin providing the service to consumers in the fall.

AT&T Wireless is selling the service to businesses through its direct sales force, but over the long term, will probably tap all distribution channels, Blasi says.

AT&T Wireless plans to upgrade the network this year in markets representing approximately 40 percent of its subscribers, and cover nearly all of the top 100 U.S. markets by the end of 2002. The initial markets will include Portland, Ore. and Las Vegas, among other unnamed cities.

3G capabilities will follow. AT&T Wireless ultimately plans to migrate to a universal mobile telecommunications system (UMTS) network starting in 2003. The network will support download rates of up of to 2mbps. Before migrating to a UMTS network, however, the company plans to incorporate enhanced data rates for GSM evolution (EDGE), a software upgrade which could support up to 384kbps.

AT&T Wireless has roughly 1 million data subscribers. Those who purchase a wireless web phone and sign up for a voice plan receive free and unlimited access to more than 80 websites. Enhanced features such as e-mail and full browsing capabilities cost extra. Blasi declined to comment on how many subscribers are paying for enhanced data services.

The Redmond, Wash.-based company, which reported second-quarter earnings of $3.38 billion, hopes its alliance with Japan’s NTT DoCoMo Inc. will help to increase its appeal as a data services provider to varying market segments, from adolescents to enterprises.

DoCoMo has invested $9.8 billion in the company and agreed to share its technology, including the magic behind i-mode, the carrier’s en-vogue wireless service.

i-mode, with a mere 9.6kbps of download capacity, dispels the notion that speed is the ultimate answer to luring subscribers to a wireless data service. But wireless experts argue that cultural differences help to explain i-mode’s success. In part, they say, the predominance of wireless devices–and the relatively low penetration of PCs in the Far East–explain DoCoMo’s success, despite i-mode’s tiny screen, slow speed and other limitations Americans find irritating.

Blasi says AT&T Wireless will use the i-mode technology as a foundation to create other wireless services.

“People want something else here,” he says. “The killer app has not been defined.”

As part of its agreement with DoCoMo, AT&T Wireless has created a separate subsidiary to develop multimedia applications for 3G services. It is conceivable, for instance, that companies might incorporate a richer graphic presentation and more audio features, Blasi says. The subsidiary will probably start introducing applications next year, he says.

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