HUMORIST FRAN LEBOWITZ facetiously advises teens to “remember that as a teenager, you are at the last stage in your life when you will be happy to hear that the phone is for you.” Regardless, many adults feel that it is necessary to be constantly within reach. Whether by pager, mobile phone or the Internet, the latest telecommunications technology ensures such availability as it approaches a saturation point, and “only a phone call away” takes on an ominous tone.
PCS: Always in Touch
ONE OF THE LATEST BUZZWORDS (acronyms, actually) is PCS, Personal Communication Services. PCS is the next generation of mobile phone service. Essentially, PCS operates in the same way as cellular-it transmits radio signals to a nearby cell site that then passes the information along to the next cell site and the next via a vast phone network.
Unlike cellular’s antiquated analog, however. PCS transmits data digitally, which means it converts voice, data and images into a numeric code before sending them over radio frequencies.
With such technology, PCS provides better reception, can handle more calls at a lower consumption of power, reduces interceptions of phone conversations, has greater battery power and prevents unauthorized use of assigned phone numbers.
Because PCS functions digitally, these new wireless phones can provide a plethora of operating options. Availability of features is dependent on the PCS company, the service package and the hardware provider. Most likely, any disparity in capabilities will eventually level off. and who does what first will not necessarily be who does what best. Currently, there are only two FCC licensees in the Dallas area; PrimeCo and Sprint.
PrimeCo, headquartered in Westlake. is the result of a 1994 merger between AirTouch, Bell Atlantic. NYNEX and U S West. Its customers can initially expect typical voice services; later they’ll be wowed by services like data and video transmissions. PrimeCo currently offers store-and-forward messaging for voice, fax and e-mail, and promises eventual Internet access as well as “’interactive video on demand and broad-band service that can provide an image of a newspaper in a matter of seconds.”
All of this from something that used to go “B-b-r-r-ring.”
Sprint PCS brags about its 33 MTAs (major trading areas) and its license to serve 190 million people (cost: $2.1 billion at the Federal Communications Commission’s auction), making it potentially the largest wireless communications company in the United States. PCS is still available to Sprint users in areas not covered by Sprint through agreements with other providers.
Sprint’s packages are “feature-rich.” including combinations of caller ID, voice mail and a single number for phone and pager access. Sprint PCS promises, as does PrimeCo PCS. the potential of conversing with a computer.
Although PrimeCo and Sprint PCS are the only two providers of [his new wireless service, other major companies are making bids to woo the wireless clientele.
AT&T is offering Digital PCS, but depending on whom you ask, it’s not exactly PCS. Whereas PrimeCo and Sprint PCS use CDMA (code division multiple access) technology, AT&T uses TDMA, which stands for something that, although more impressive than cellular, is somewhat less impressive than CDMA and has limited digital performance and lower voice quality. Because its coverage is not as inclusive as PrimeCo’s or Sprint’s, AT&T’s Digital PCS is forced to use multiple frequencies, multiple technologies and multiple operators. The lack of fluidity from one cell to the next can cause bro-ken-up conversations and lost phone calls.
GTE’s Tele-Go phone service offers PCS as part of its wireline service. Basically, the phone works like a cordless at home and like a cellular when away. The handset, which combines the portability of a cordless and the range of a cellular, features memory dialing, security lock and auto answering. Both normal local and cellular charges go on the same bill.
MCI is presenting MCI One. a solitary solution geared toward consumers and small businesses. MCI One intégrales long distance, paging, cellular, cyber and security with one bill from one company. The unifying system assigns the user the same number for all communications devices. When people call the “one” number. MCI One tries to reach the consumer at up to three different locations, including cellular and pager. If the consumer is unavailable, which the consumer can choose to be, the caller can leave a voice-mail message.
Traffic Jam on the Information Superhighway
LOVE IT. LOATHE IT. REMAIN DECIDEDLY indifferent.
Whatever your feelings about the new cyber-culture, you can’t deny one inevitability: The Internet is here to stay. The number of Internet users has reached more than 10 million, a number that defines the Internet as a standard means of communication not unlike the telephone. Large and small businesses, individuals, corporations and non-profit organizations around the globe utilize the Internet’s vast connective power in many ways, most notably by posting homepages on the World Wide Web.
But what do these web pages really do for a company? How can one of 60 million different web servers in a sea of electronic media set a company apart?
In actuality, many businesses use the Internet not to draw distinctions between themselves and others, but instead to conform, to put a modern face on their business and to show that they have a global presence, even if not in the traditional physical sense.
Justin Sewell, creative director at Onramp Technologies, alocal Internet service provider for businesses, agrees that many companies post homepages because they have bowed to competitive pressure, but adds that “not having a web page might cost them more in lost customers than the money spent on the web site.” Sewell points out that few businesses will realize a return on their investment in the short term but that in the long run the Internet is a cost-effective way of saving advertising dollars.
With web sites growing as pedestrian as the TV commercial has become, businesses are looking for ways to distinguish themselves from the myriad other cyber-hip companies. According to Murray Smith, president of Internet Media, a Dallas-based software and web development company, businesses can utilize the Internet more effectively if they provide one or all of the three things Internet users want: “cool stuff, useful stuff and free stuff.”
When a surfer arrives at web sites delivering one or all of the above and selects a software option, he or she is then presented with advertising from any number of companies. Internet advertising differs from the traditional kind, however, in that individuals choose to approach a specific web site and view a particular homepage. “The advertisements that they encounter along the way are tailored to their individual interests, therefore increasing the effectiveness of mass-market communications.” says Smith.
Locally-based GTE Directories is among the growing number of conventional ink-and-paper businesses to enter the online advertising fray. Its Superpages directory (
Tools like Superpages are making it easier to do business, both on a small and large scale. One of Superpages’ first users was an American expatriate in Indonesia who used the service to find his favorite brand of socks,
Interactive tools such as question-and-answer e-mail services or ways to order specific products and services over the Internet allow customers to take an active role in their relationship with a company. They feel they can communicate with a company directly and sometimes receive a response to a question or concern much more rapidly than they would through traditional mail or telephone calls.
Companies capitalize on the connective capabilities the Internet provides not just in communication with customers, but also within the corporate engine. Along with the globalization of many corporations comes a difficulty in keeping all employees abreast of the happenings that occur around the world. Companies therefore resort to an intranet. Employees access memos, calendars and important bulletins about the state of their company.
“TU Electric’s implementation of an intranet has provided remarkable economic and time savings since its introduction in May of this year,” explains Joan Hunter, public information specialist for TU. “Power service employees in the field can call up maps of power lines from their vehicles, thereby replacing the need to phone the home office for information.”
According to Hunter, TU executives find the intranet has improved daily work situations for them as well. Not only does it facilitate communication between all levels of management, but the dissemination of ideas has become easier with the use of Power Point and other vital applications that are stored on the intranet. TU is in the process of putting its accounting system on the intranet as well.
Intranet services can also allow individuals to not only connect with the producer of the product or service they desire, but also to join an Internet community that lets an oil-field worker in West Texas talk with a colleague in Saudi Arabia about equipment, job opportunities and their profession in general. Companies, in essence, provide the forum for linking people. They are the means by which global communities are formed, and in the end, both the host company and the Internet participants benefit from this concept. The company creates product loyalty, and the Internet user expands his or her horizons.
What Deregulation Means to Dallas-Fort Worth
MA BELL IS EXPECTING COMPANY.
The Telecommunications Act of 1996 calls for the deregulation of phone service in an attempt to foster competition and minimize the monopoly that Regional Bell Operating Companies has enjoyed in the realm of local phone coverage. In exchange for Bell’s permitted entrance into the affluent market of long-distance servicing. RBOC must provide Sprint. MCI, AT&T and cable companies cut-rate access to their local networks and an open market for local phone service.
The Federal Communications Commission was given the onerous task of ensuring that the divvying is fair. Individual states catch the brunt of it. though, by translating the federal statute into state provisions and law. In particular, each state’s Public Utilities Commission is responsible for determining exact rules, arbitrating arguments and setting specific prices.
Too much money is at stake, however, for all parties involved to merely accept what’s given to them. Bell South, for instance, is battling the FCC’s interpretation of the act, insisting that it is going to lose too much money and that it is actually being regulated more closely than before. The “outsiders’” like AT&T complain that the cost margin of local services is too small to make a profit. There exists the assumption and expectation that negotiations and litigations will be stalemated for some time before deregulation is fully implemented.
Things are heating up, especially in Texas, a key market in the telecommunications wars. AT&T and Southwestern Bell are like two lumbering heavyweights in a clinch with the anticipation of an eventual knockout punch. Southwestern Bell has quite a corner. First of all, it’s the incumbent with an inherent home-field advantage as proven in Rochester, N.Y. The small community, permitting local service competition in January 1995. provides a litmus test of what a world of deregulation might be like. Rochester Telephone, the local provider for more than seven decades, has so far staved off the advances of global giant AT&T. Pundits believe that consumers’ reluctance to change, the reliability of previous service and uncertainty of competitors help explain Rochester Telephone’s mere 3 percent loss of market share.
Southwestern Bell also has an impressive contingent of 86 lobbyists lighting the good fight in Austin. Backed by significant funds. Southwestern Bell has the wherewithal to go the distance.
One should, however, keep a bettor’s eye on AT&T. Its executives see Texas as one of the three most crucial and critical markets (with Florida and California) thai should be aggressively pursued. With nearly 40 negotiators and a severe bankroll. AT&T continues to trudge through the muddled obfuscations of the state’s bill and regulations.
AT&T envisions, in the best of all possible worlds, a consumer who calls local on AT&Tservices, dials long distance with AT&T, uses AT&T Wireless as a cellular phone, watches television via AT&T’s satellite service and surfs the web with AT&T’s Internet service. Each customer’s communications tally would be on one bill.
Their efforts could backfire. In Rochester, providing local phone service simply wasn’t profitable, Also. AT&T, while fighting for its own right to participate, will unavoidably open the floodgates for other notable competitors such as MCI and Sprint.
The benefits of deregulation for the consumer are readily apparent: A competitive market pressures companies to stay on the forefront of technology and to keep the price of services down. Of course, someone has to pay the many lobbyists who made it all possible.
Telecommunications Investment Guide
D Business ASKED LOCAL investment experts to oiler their picks and pans for investment in telecommunications firms with a local presence in Dallas-Fort Worth. This advice is opinion only and not that of their employers. Needless to say. it is not a solicitation for the sale or purchase of any security.
‧ BRIAN OLSON, VP/lnvestments, Smith Barney Preston Center<BR>‧ Ericsson. One of [he best large-cap
companies in the expected expansion of wireless cellular infrastructure.
Nokia. Gaining market share in cellular handsets and experiencing strong growth in wireless infrastructure. Recently reported much stronger than expected earnings for the third quarter.
Motorola. Well-positioned to benefit from the wireless infrastructure expansion, but must overcome the malaise in its semiconductor segmen
KAY SELF, Associate Vice-President of Investment at Prudential Securities, Inc.
PageNet. One of the fastest-growing providers in the paging industry and could increase its subscribers by 2.5 million this yea
Sprint. Has a unique position in the industry and has ventures with other companies that will be profitable.
MARK JOHNSON, Financial Advisor, Eagle Financial Planning
Texas Instruments. Has technology in place for the new phone systems that will appea
Alcatel. Its international phone systems will come into play as the market grows globall
GTE. Will show growth as market deregulation occur
Motorola. Will continue to market cell phone systems successfully.
DSC. After being beaten down, everything is in place for a good year.
STACEY OELSEN, Senior Vice-President of Institutional Sales at Smith Barney<BR>Innenvice. Voice recognition and institutional answering service. Its stock is off its high; well positioned for 1997.
GTE. Likely candidate to be bought out by AT&T. Well positioned in all areas of teleco
Southwestern Bell. Undervalued on the stock market. Has a hand in all areas of telecom, thereby diversifying risk, and has good dividend yiel
JOE ONDRIS, Senior Vice-President of Investments, Everen Securities
Brooks Fiber Properties. Brooks’ first to market approach, wholesale opportunity and less competitive markets warrant a premium to the group.
ICG Communications. Undervalued relative to its peer group, it trades at 40 percent discount to industry group. Has better strategies than its competitors.
‧ QUALCOMM. Its CDMA technology could revolutionize the way the cellular phone industry operates.
SOME FINAL WORDS OF ADVICE FROM OUR EXPERTS:
“Avoid the PCS service providers. Competition and heavy capita! spending tend to compress profit margins. Don’t try to guess who will strike gold…buy the company that sells the picks and shovels (those who make the enabling technology, not the service providers). ” -Brian Olson
“Stick with established companies that don’t have all their eggs in one basket and that aren’t waiting for one big contract like smaller, riskier companies might be. If new technologies [don’t succeed}, large and diverse companies may suffer but it won’t kill them. “
-Mark Johnson
“As the [télécommunications! market is opened to the competition, too many questions remain unanswered. My belief is that competition in the areas of long distance and local services is really going to shrink profit margins. “
-Joe Ondris
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