Carriers Help Customers Cut Cord
Posted: 01/2000
Carriers Help Customers Cut Cord
By Shelly Tyler
Service providers are looking to differentiate their services, reduce churn,
increase average revenue per user and attract new, high-value customers. One way
carriers can achieve all these goals is to offer their business customers
wireless office services. Wireless office customers are "golden
customers" because they demand and require anytime/anywhere communication.
For this reason, the wireless office concept is gaining momentum and many
manufacturers and service providers are developing ways to bring it to market.
In-building wireless systems allow workers to utilize portable phones within
a building or campus and still receive all the functionality of a corporate PBX,
key/hybrid phone system or Centrex. In-building wireless, which allows workers
to move freely throughout their work environment receiving and placing calls, is
especially attractive to the education, health care, retail and manufacturing
sectors that have highly mobile employees; however, all business segments will
want in-building mobility in the future.
Such in-building wireless systems have been around for a few years, but until
this year, their appeal was limited for several reasons. The systems were
expensive and faced hand-off problems between base stations, and there wasn’t a
digital in- and out-of-building solution. The introduction of new digital
systems, however, that have improved reliability and voice quality, coupled with
the support of top wireless carriers including AT&T Wireless Services Inc. (www.att.com)
and BellSouth Cellular Corp. (www.bellsouth.com)
will increase the popularity of these services in the next few years.
All of the licensed wireless office systems operate at either 800mHz or PCS
1.9gHz, and are produced by one of three manufacturers: AG Communication Systems
(AGCS), a subsidiary of Lucent Technologies Inc. (www.lucent.com); Ericsson
Digital Wireless Office Services, a division of Ericsson Inc. (www.ericsson.com);
and Hughes Network Systems (www.hns.com). All
of these systems currently use time-division multiple access (TDMA); however,
AGCS also produces an advanced mobile phone service (AMPS) product.
AGCS marked its first shipments of its ROAMEO TDMA wireless office telephone
system in the second quarter of 1999. Ericsson also started shipping its
wireless telephone system in October and Hughes Network Systems expected to
start shipping its AIReach Office product in the first quarter of 2000.
How It Works
AGCS’, Ericsson’s and Hughes Network Systems’ digital TDMA wireless office
telephone systems all work essentially the same way. The system consists of a
controller that connects to an existing PBX, key system or Centrex as an
adjunct. The controller administers PBX line termination, call processing and
maintenance. Base stations are placed throughout the building to transfer calls
from the wired phone system to employees’ mobile phones. Sometimes companies
also install antennas to extend coverage over a large area.
When employees are in the office, all incoming calls are routed automatically
to the office telephone system. Both the employee’s desk phone and the cell
phone ring. Users can enjoy all the standard features of wired desksets on their
cell phones including call transfer, call forward, conference calling, call
waiting and three-way calling, to name a few.
When users are outside the office, the wireless office telephone
automatically redirects incoming office calls to the outside wireless (macro)
network if the user’s handset is active in it. Businesses can choose which
employees they want to have macro access. If a business does not want a
particular employee to use his or her handset outside the workplace, it can
restrict the employee’s handset to work only inside the building or campus.
Employees can set up their own accounts with wireless carriers to be billed
separately for their personal macro network usage–an added feature for
employees since they do not have to pay a monthly service fee.
Businesses buy the controller and base stations from the manufacturers–AGCS,
Ericsson or Hughes Network Systems–and the handsets from their wireless
carriers. Generally, wireless carriers charge businesses $5 to $15 a month per
user for unlimited in-building wireless use. Businesses then can set up service
plans for each employee that best meet their off-campus wireless needs based on
their job function.
Wireless Licensed Handset Shipment Forecast
Wireless Centrex
Nortel Networks (www.nortelnetworks.com)
is in the final stages of testing a future opportunity for many wired carriers
to reap the benefits of wireless office solutions. Nortel Networks’ DMS-100
Integrated Wireless Centrex integrates Nortel’s DSM-100/200 wireline and its
DMS-Mobile Telephone Exchange (MTX) wireless switching system into a single
platform.
Nortel’s Network’s DMS-100 Integrated Centrex Solution provides businesses
with a wide range of features including the corporate VPN calling plan, and
basic Centrex features such as calling line ID, three-way calling, and call
forwarding. The DMS-100 Integrated Centrex Solution enables employees to move
around their building or campus and also leave the building and enter the public
wireless network.
Nortel’s Integrated Wireless Centrex is highly flexible and accommodates a
number of scenarios. Wired carriers that do not own licensed spectrum can either
choose to offer either the wireless Centrex as an in-building/on-campus solution
only, or they can upgrade their DMS-100/200 or add a DMS-100 and work with a
wireless service provider to offer out-of-building wireless coverage. Wired-line
carriers that do own 800mHz or 1900mHz spectrum can upgrade their existing
DMS-100/200 switching system to provide in-building/out-of-building wireless
Centrex service.
Centrex operators can provide in-building/out-of-building wireless services
by working with wireless carriers, who should be willing to work with Centrex
providers because they want access to wireless office customers. Highly mobile
business customers are the most valued customers for wireless service providers
because they use thousands of airtime minutes a month and use value-added
services that mean large profits to wireless carriers.
Since cell-site controllers and wireless networking interface equipment are
located at the CO, the customer’s equipment needs are reduced. The DMS-100
Wireless solution supports code-DMA (CDMA), TDMA, and AMPS technologies at both
800mHz and 1900mHz. This product was expected to be generally available by
December 1999.
Other Developments
Nortel Networks is currently introducing its PicoNode in Europe. This product
will be available in the United States in early 2000. This wireless office
telephone system is similar to the systems mentioned above developed by AGCS,
Ericsson and Hughes. However, instead of using TDMA, this system relies on
global systems for mobile communication (GSM) for the radio. This system can be
deployed either as a standalone unit or as an adjunct to a PBX. In October,
Nortel Networks announced that BT Cellnet, United Kingdom, would begin offering
this product to its customers. Nortel Networks’ PicoNode is a unique product
that incorporates a GSM switch, base station controller and base transceiver
station in one package. This product enables calls to be switched locally
instead of transmitted to remote mobile switching centers.
Ericsson also is developing a wireless office solution for GSM carriers in
both the United States and Europe. In the United States, Powertel (www.pcs.org)
and Pacific Bell Wireless (www.pbwireless.com)
are testing their GSM on the Net solution, which combines GSM wireless
communications with Internet protocol technology, and the University of
California, Berkeley (www.berkeley.edu),
is testing open interface applications to use with the system. GSM on the Net
essentially creates a mini, private GSM network by integrating GSM wireless
communications into a LAN/intranet environment to offer voice, datacom and
video. The GSM voice traffic is transported as IP packets. Users will be able to
use PC phones, multimedia terminals or fixed IP phones. This service, which is
expected to be available in the first quarter, will give carriers new integrated
computer and telephony services they can customize to businesses and vertical
market applications.
Wireless office, in-building wireless and wireless Centrex will become an
integral part of the success and failure of cellular carriers in the next few
years. Offering wireless office services currently gives carriers an opportunity
to differentiate themselves to achieve a competitive advantage, but in the
future, the lack of a wireless office solution will make carriers vulnerable to
losing key customers and profitability.
Shelly Tyler is an analyst at The Phillips Group-InfoTech (www.phillips-infotech.com),
a worldwide consulting firm specializing in strategic solutions for corporate
clients in the telecommunications and information technologies industries. She
can be reached at +1 973 884 0100.