Wireless World Is Looming Large for Data

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New Orleans -- The wireless industry last week served up a
vision of the future that could chill the soul of anyone heavily invested in wireline
facilities -- except for the fact that there is utter confusion over how to get there.

Speaking by video to attendees at the annual PCS '99
conference here, Federal Communications Commission chairman William Kennard offered a
ringing endorsement of the point that industry leaders were trying to make. "I think
the next millenium is going to be the wireless millenium," Kennard said.

"All of the services people are getting from the
providers of cable, phone and Internet services today, they will be able to get from
wireless," he added. "We want to give you the flexibility to make that
happen."

Various players in the mobile- and fixed-wireless domains
offered glimpses of strategies that suggested how the wireless spectrum that is already
available and coming to auction could pose a daunting challenge to cable and other
wireline-broadband providers.

For example, William Lee, vice president and chief
scientist at Vodafone AirTouch Plc, suggested that his company will eventually deliver a
fourth generation of mobile-wireless technology that uses infrared or millimeter spectrum
for fixed service over the "last 50 to 100 meters" to deliver a full broadband
bundle.

But Lee later conceded, "We can't do it with all
wireless. It will have to be a hybrid that uses wireline, as well."

One of the first companies anywhere to bank on the ability
of a mobile-wireless service to play a role as a first-line telephone service is new
venture Leap Wireless International Inc., which just launched its domestic
"Cricket" service in Chattanooga, Tenn.

Offering a low-cost, fixed-rate local service, Leap
believes it can sell consumers on making the wireless phone the primary communications
device, leaving the wireline connection for applications such as Internet access and fax,
said Sue Swenson, president of Leap and CEO of the domestic Cricket unit.

"By not supporting roaming outside of the local
market, our cost structure is much lower than other [personal-communications services]
providers, which allows us to set a flat rate of $29.95 per month for the service,"
Swenson said.

"People are already starting to substitute wireline
phone service with wireless just because of the convenience, despite the much higher
prices," she added. "We think that by giving them that option at a very low
price point for the mobile service, we'll encourage that type of substitution on a much
wider scale and, at the same time, expand the customer base for mobile services."

Leap -- which is building more traditional PCS networks in
Mexico and Chile -- picked up commitments of $330 million each from Lucent Technologies
and Ericsson Inc. last week to bolster its U.S. operation.

Cricket plans to launch next in Nashville, Tenn., and it is
working on construction plans in 14 other cities, which Swenson declined to name. The
company will focus on consumers in second- and third-tier cities.

Aside from trying to make the mobile phone the phone of
choice in all places, the wireless industry's biggest priority now is expanding data
services. Visionary proclamations from conference podiums suggested that wireline
operators should be most worried about data competition.

Presenters offered scenarios in which users would get
services configured for any type of device -- from car-mounted tracking systems to
hand-held gadgets to PCs -- delivered at speeds ranging from a few hundred kilobits per
second to multimegabits per second.

It was clear from discussions with various vendors and
operators that wireless is a long way from getting beyond the limited-bandwidth services
now in sway at Sprint PCS, AT&T Wireless Services, Vodafone AirTouch and other
operations.

But some executives suggested that 14.4-kbps and slower
data rates represent a golden opportunity without a need for jumping to higher rates, now
that there is finally a consensus on how to configure data services for the small screens
on hand-held phones and personal digital assistants.

"There's an argument to be made that the presence of
100 million users in the marketplace with data-enabled mobile phones and PDAs could
dramatically change the Internet to where low-density content becomes a major component of
what's available through Web sites," said Mark Powell, director of global portfolio
planning at the personal-communications sector of Motorola Inc.

All mobile handsets Motorola plans to ship next year will
come equipped with WAP (Wireless Application Protocol) browsers, said Jonathan Ruff,
senior manager for business development in Motorola's personal-communications sector. He
predicted that "the market for low-density content is going to skyrocket as more
people buy WAP-enabled phones."

The biggest effort in wireless-data content is developing
content that is specifically useful in the mobile environment, such as information on
flight status, personalized stock and news updates and weather information.

When it comes to getting serious about providing data
services that compete with today's mainstream applications, however, the wireless industry
faces immense challenges beyond adding bandwidth.

"For a lot of people in wireless, a future that
incorporates IP [Internet protocol] has become a mantra, but how to get there still isn't
clear," Cisco Systems Inc. vice president of market development Jon Shantz said.

"The big problem with wireless-data standards so far
is that they've been all about making wireless-data transport possible without focusing on
creating the distributed architecture that's essential to providing value-added
services," he added.

Cisco and Motorola have teamed up on an initiative aimed at
focusing industry attention on this question, where the goal is to establish a
standardized approach to exploiting packet-based network technologies, regardless of air
interfaces.

David Murashige, vice president for wireless networks at
Nortel Networks, made a similar point, noting that there are now seven different protocols
competing for support as the means of packetizing communications from the IP domain.

"We've got a long way to go before all of this sorts
itself out," he said.

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