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PCS Ops Eye High-Speed Data

Leading personal-communications-services operators are
finally taking the plunge into data services in preparation for high-speed solutions
coming online late next year, which, they believe, will open opportunities in fixed
markets, as well as in mobile markets.

"We're getting out on the cutting edge, because
we see data as a big part of our future," said Sprint PCS spokesman Ed Maddox.
"There's an education process that we have to go through, for ourselves and for
our customer base."

Sprint will start delivering data on a wide scale during
the first quarter of 1999, at 14.4 kilobits per second. But the company plans to move as
quickly as possible to a third-generation CDMA (code-division multiple-access) platform
that will deliver data to mobile users at 64 kbps and to users over fixed links at rates
of hundreds of kbps in the near term, and at higher rates longer-term.

Lucent Technologies, one of Sprint's designated
third-generation suppliers, recently announced that it would deliver the first iteration
of its third-generation CDMA system for commercial deployments by the fourth quarter of
1999.

Sometimes called
"second-and-one-half-generation," this version of the next-generation
"CDMAOne" standard, backed by U.S. and many other regional CDMA interests, is
designed to operate within the existing 1.25-megahertz RF-channelization scheme of
today's CDMAOne systems, while bringing new modulation, power-control and other
features of the full third-generation system into play.

Operators will be able to achieve the initial
third-generation benchmarks for mobile and fixed data by installing RF-circuit packs in
existing base stations, said Cindy Christy, vice president for AMPS- (advanced mobile
phone system) and PCS-product management at Lucent.

The new Lucent system, made possible by advances in
software and in the core DSPs (digital-signal processors), will also double voice
capacity, thereby freeing up more spectrum for fixed applications, as well as for mobile
applications, Christy added

"We haven't completed all of our simulations on
fixed applications, but we'd expect a significant increase [in data-access speeds]
over mobile applications," she said.

Sprint and other users of CDMA technology are using only
two to four of their 1.25-MHz channels for mobile services in any given market. This
leaves in excess of 20 MHz of spectrum for use in new applications, such as fixed data and
voice services, noted Jeff Belk, vice president of subscriber marketing at Qualcomm Corp.

"There's plenty of bandwidth to work with within
the existing spectrum allocations when it comes to putting 3G [third-generation]
applications into play," he said.

AT&T Wireless Services Inc., which now has a nationwide
footprint for its cellular-digital-packet-data service, is in the vanguard of the new wave
of wireless-data launchings, having debuted a cluster of services late last year,
including the flat-rate "PocketNet" service, which is priced at $29.99 per
month.

But the carrier doesn't expect wireless data to really
take off until the speeds supported by the third-generation system that it plans to use --
known as UWC-136 (after the Universal Wireless Communications Consortium) -- come online,
AT&T Wireless spokesman Ken Woo said.

"We're told by our suppliers that we can expect
to see equipment supporting the new standard in 2000, which will give us the opportunity
to offer services at speeds of up to 2 megabits per second to 5 mbps," Woo said.

"The key question, in terms of timing, is
affordability, which ties in with the extent to which we can use existing infrastructure,
and that's something that we're sorting through with manufacturers," he
said.

The CDPD format has become the most widespread
wireless-data application -- now reaching 159 U.S. markets, representing 53 percent of
total population -- according to the Wireless Data Forum. By next year, CDPD will
represent 68 percent of an anticipated $1.5 billion revenue pie for wireless data here and
abroad, according to a study from Northern Business Information.

To date, market growth in mobile data has largely depended
on the ability of service providers to tailor applications for vertically integrated
markets, but the outlines of a mass market are now clearly in sight, said Scott Hamilton,
director of wireless data for CellularOne, the cellular-service joint venture between
AT&T Wireless and AirTouch Communications Inc.

"The real growth trends that we're seeing are in
the horizontal direction," Hamilton said. "People want access to e-mail and the
Internet on the road, so it's more of an individual sell than a corporate sell."

CellularOne has a marketing relationship with AT&T
Wireless under which it sells AT&T's PocketNet, "PocketEnterprise,"
"Wireless IP" and other data services, all of which operate over the
carrier's CDPD-access system, using different interfaces to connect with different
types of terminals.

For example, the PocketNet terminal is a cellular phone
supplied by Samsung Telecommunications America Inc. and Mitsubishi Wireless Communications
Inc. The phone comes with a screen that allows people to access e-mail and specialized
information services, such as sports and weather updates, as well as to record addresses
and other personal information.

With Wireless IP, priced at $54.99 per month, users can
surf the Internet using hand-held and laptop computers that are connected to a wireless
modem that interfaces with the CDPD system.

Where full Internet access is concerned, the popularity of
hand-held devices like 3Com Corp.'s "Palm Pilot" is playing a big role in
driving the need for mobile-data connectivity, Hamilton noted.

He said "Minstrel," a device supplied by Novatel
Corp., is especially popular as a wireless connector to hand-held computers. Minstrel
serves as a CDPD-modem-equipped cradle that makes connecting to wireless data a simple
matter for customers using a wide range of devices running on Microsoft Corp.'s
Windows CE operating system.

In terms of vertical markets, the big growth areas are in
"dispatch and public safety, where data really is a must-have value
proposition," Hamilton said.

Demand for higher-speed data solutions is pushing vendors
and operators into the market at a pace that could upset the standards-setting process for
third-generation systems.

So far, that process, under the auspices of the
International Telecommunications Union, is on track. Its goal is to set specifications in
time to support commercial rollouts in early 2000, said Dan Bart, vice president for
standards and technology at the Telecommunications Industry Association, the coordinator
for PCS- and cellular-standards-development activities in the United States.

The ITU -- which recently received 10 draft proposals for
third-generation specifications from various organizations around the world -- would like
to achieve a single standard for all air interfaces. One possibility involves utilizing a
"family of systems" approach, where a single multiplexing technique rides on
disparate transmission systems that are linked together through a set of interface
protocols.

This approach is seen by many standards proponents as a way
to avoid favoring one air-interface infrastructure over another. Some interests, however
-- including those tied to the U.S. version of GSM (Global System for Mobile
Communication) -- oppose a single- standard approach.

There's a possibility that holders of key patents that
are essential to a "family of systems" solution could refuse to license their
technologies, thereby blocking third-generation unification, Bart said.

"Business issues need to get resolved if we are going
to have a single standard," he added.

The intensifying pursuit of new data opportunities almost
guarantees that operators will grab the best means at hand vis-à-vis their existing
infrastructures to push ahead as quickly as possible, without waiting for the standards
issues to be resolved, noted Keith Shank, director of strategic marketing and business
development at Ericsson Inc., a leading supplier of GSM and TDMA (time-division
multiple-access) digital-mobile systems.

This means that operators in the GSM and TDMA domains will
likely discover a sweet spot for mobile users in the 30-kbps range next year, giving them
strong incentive to lay the groundwork for data operations as the technology supporting
higher-speed access matures, he said.

"You'll see a slow evolution to higher speeds,
because the applications that will start to make a difference in market demand can be
optimized to work at the lower speeds," Shank said.

He noted that the wireless industry expects to use
protocols with the new hand-held computer and screen-phone devices to strip away
multimedia components that intrude on airtime and screen space.

"This is one of the things that the WAP [Wireless
Access Protocol Forum] is focusing on for the gateway protocol," he said, referring
to a new group that is seeking uniform connectivity to hand-held devices.

Ericsson expects to deliver systems supporting 115 kbps
over both GSM and TDMA IS-136 systems by sometime in 2001, with 384-kbps capabilities
coming online a year later.

This leaves a window of opportunity for users of the CDMA
platform to proceed with the 64-kbps capability ahead of their competitors, adding still
more incentive for Sprint and other CDMA users to aggressively deploy higher-speed
systems.