Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Which wireless carriers in the United States are in the best position to migrate from providing standard voice and text services to always-on, higher bandwidth service? To date, wireless companies have been competing to land the mobile millions by offering low-rate plans and free phones. The transition to next-generation services, however, may require a new strategy. Here’s a run-down of some of the top U.S. mobile carriers: VERIZON WIRELESS The largest U.S. mobile carrier, Verizon Wireless is a joint venture formed in April 2000 by the combined wireless operations of Bell Atlantic and GTE (which merged later in the year to form Verizon Communications) and the British-owned Vodafone, which owns 45 percent of the carrier. With more than 27 million customers, Verizon covers 49 of the top 50 markets in the U.S. with its CDMA (code-division multiple access) technology. That massive customer base, along with new licenses it picked up in the spectrum auction in December, puts it in a strong position to hold on to a hefty share of the consumer market. The size of its market, however, could be the toughest obstacle in migrating to next-generation services. Verizon will need to learn how to serve and up-sell 30 million users, without spending its fortune on customer service. CINGULAR WIRELESS Cingular Wireless is the second-largest carrier in the country with more than 20 million customers in 38 states. A joint venture of SBC Communications (the parent company of Pacific Bell, Southwestern Bell and others) and BellSouth, it came into being in January 2000 and started using the name Cingular in October. It operates in 43 of the top 50 states, with strongholds in the Southeast and the West. Cingular leads the pack in deploying mobile wallets — software that lets users enter their credit card information just once, then buy more easily through the phone’s Internet connection. It also says it will be the first to roll out GPRS (general packet radio service) in the U.S., offering customers an always-on Internet connection (like DSL from the home), as well as faster data downloads. But as with Verizon, Cingular faces the challenge of shifting tens of millions of consumers to premium services and finding streamlined ways for customers to pay for the new services. AT&T WIRELESS GROUP In third place is AT&T Wireless Group, with 15 million subscribers. Its parent, AT&T, owns about 70 percent of the tracking stock of AT&T Wireless, and Japanese carrier NTT DoCoMo, the master of the popular I-mode service, recently paid $10 billion for a 16 percent stake in the company. Two weeks ago, AT&T announced its restructuring plan, which includes spinning the wireless group off as its own company. Elliott Hamilton, senior communications industry analyst with the Strategis Group, says AT&T Wireless has the best brand recognition and image among consumers — although the aggressive ad campaigns of Cingular, Verizon and SprintPCS are working hard to change that. AT&T Wireless’ alliance with DoCoMo is another one of its strategic strengths. Carriers around the world have envied the success of DoCoMo’s I-mode, which has more than 20 million subscribers. But Warren Wilson, Summit Strategies’ wireless practice director, points out important differences between Japan and the U.S. that will make it difficult to simply “import that model, plop it down in the U.S. and expect it to work.” One reason is that Americans, accustomed to full-featured e-mail and Web services, may not be as satisfied with wireless text services. Another difference is Americans’ insistence on driving rather than using public transportation: “Commuting on a train, an hour each way, is ideal time to play with a mobile phone. Americans’ refusal to ride mass transit wipes that opportunity for carriers off the board,” says Wilson. SPRINT PCS GROUP In fourth place is Sprint PCS Group, a division of Sprint Communications that serves about 11 million subscribers. Sprint PCS took an early lead in offering wireless Web service, although AT&T had been offering its PocketNet services earlier, with less traction. Sprint says that data usage was up 30 percent in the first quarter of 2001 and up sixfold over a year earlier. Additionally, Sprint PCS says it has picked up 826,000 new customers during the quarter, lowered its churn rate and boosted average revenue per user to $60 from $57 — enough good news to prompt analyst Peter Friedland of W.R. Hambrecht, to tell the Financial Times, “These guys are my top pick in the U.S. wireless space.” Its smaller customer base can be explained in part by the fact that it has acquired them one at a time, whereas Verizon Wireless and Cingular resulted from combinations of companies. The Strategis Group’s Hamilton believes Sprint PCS’ all-digital CDMA network “will provide it capacity advantages as well as an easier migration to 2.5G-3G services.” He also says it has an “early mover advantage in wireless Web services and wireless location services.” So which company is in the best position for the upgrades to broadband? The answer could be as much about people as it is about pipes. Summit Strategies’ Wilson says customer service could be a key factor in determining the winner. “The infrastructure side is the piece that gets the most attention, but it’s just as big, if not a bigger challenge, for them to switch into this mode where customers can define their own service, quickly and comfortably.” Wilson thinks that wireless business applications will drive the switch to next-generation mobile phones. If that’s so, he likes the No. 5 U.S. carrier, Nextel, which serves about 7 million subscribers in 182 of the country’s top 200 markets and saw $5.7 billion in revenues in 2000. “Nextel’s been playing wisely,” he says. “Once you enable a corporate application that employees find useful, that’s a pretty sticky, low-churn situation,” much more than just voice service and headlines. He also likes Nextel’s radio service (based on Motorola’s iDen technology), which lets members of a corporate fleet use the phones like walkie-talkies without burning through minutes. “They’ve been focused on the enterprise for several years,” he adds. “It’s hard to identify another major carrier that has done well addressing that market.” Copyright � 2001 The Industry Standard

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.