“Customers really don’t care about frequency, whether it’s 1,900 MHz or 850 MHz,” said Robert Allen, AT&T chairman. “They care about services.”
To handle heavy roaming, AT&T will tap Nokia Mobile Phones to build dual-band, dual-mode phones for its new Digital PCS wireless communication service.
Under a three-year $240-million deal, Nokia will build TDMA phones that will operate at both the 800-MHz and 1,900-MHz bands. Jointly, the two networks will reach a potential 212 million customers. The phones will also run on analog networks when the user is outside AT&T’s digital network territory.
Dual-mode, dual-band phones should be available early next year. Customers who buy a $150 to $250 phone this year for Digital PCS will be able to upgrade.
With the announcement, AT&T is essentially integrating its existing cellular network with its forthcoming PCS network to offer a larger digital footprint to its customers, said Michael King, a research analyst with the BellSouth Foundation. However, the name may be confusing to some customers who have heard all the hype around the multibillion-dollar Federal Communications Commission’s auctioning off of the 1,900-MHz spectrum, which is usually referred to as the PCS spectrum, King said.
AT&T was the second-largest spender in the PCS license auction last year, second only to Sprint, King said. Some competitors have already begun to offer service in the 1,900-MHz band, but King sees AT&T as a bit overconfident.
“AT&T’s trying to capitalize on a lot of the excitement and notoriety of PCS,” King said. “They won’t have a PCS network running for some time.”
“It’s the largest digital rollout in history, in the world, really,” said Mark Lowenstein, vice president of wireless research at Yankee Group Inc., in Boston. “It really spotlights AT&T as a big player in digital.”
Digital personal communication services are expected to be a big factor in the growth of the cellular market, according to market research company Dataquest Inc.
The cellular market is expected to grow 30 percent this year in the United States, to 41.8 million subscribers, Dataquest officials said. Growth will slow down next year, to only 50.6 million customers. But by 2000, more than half of the 69.8 million cellular customers are expected to be on digital networks, spurred on by the need for personal communication services. Customers can also expect lower cellular prices with the growth of PCS.
Smart phones — phones that offer e-mail, voice, facsimile, and paging — will be on the U.S. market by the middle of next year, rising from 14,800 units in 1997 to 22.4 million units by 2020.