The Future

There is one way of looking at the future of the cellular telephone and paging industries and that is to divide them into two general areas, the technical and the commerical. Of these two, the latter will probably get the most publicity and newspaper coverage because it is the easiest to understand. The enactment of the Telecommunications Bill early in 1996 untied some long-standing regulations that had separated the various suppliers of the different methods of communication. From the announcements that have been made by these suppliers, as indicated in the financial sections of the newspapers and in the trade journals, this “deregulation” appears to mean that there will be more corporate mergers and affiliations. These mergers and affiliations will be with organizations that up to now have been competing for the opportunity and the legal right to deliver wired and wireless services of all types, both commercial and entertainment, to businesses, industry, and to the home. These probable mergers will not only be between companies in the same field, but there has already been mention of the possible combination of TV cable companies with the old line, hard wired telephone companies. These new companies would then deliver all of the services, previously offered by both organizations, to the customer’s house on just one coaxial or fiber optic cable. However, the Telecommunications Bill said nothing about such technical matters as the possible nationwide standardization of the different digital modes that have been developed and are being considered by cellular carriers for the upgrading of their existing analog systems. It has been estimated that converting the existing analog cellular phone systems to some form of digital signal would give about a forty percent increase in the volume of traffic that could be handled.

The success of the first personal communications system up and operating in the Washington/Baltimore area, in late 1995, is being carefully watched by the industry. After four months of operation there were already 60,000 subscribers. By the year 2000 there is expected to be over 60 million cellular users. The cellular industry trade association estimates that the job market in the cellular industry, which now employs 300,000 people, will increase to nearly 1 million by then.

This predicted growth of cellular users and services will require the addition of many more cell sites to meet the expansion by the year 2000—it is estimated that 4,000 more sites are needed. This growth will put the pressure on designers and engineers, not only for smaller, lighter, and more efficient handsets, but also to come up with new and innovative antenna designs and especially cosmetic methods of disguising them. Real estate space is going to become more scarce and the public objections to antenna towers nearby becomes stronger. One possible solution to this problem is the use of more local and national government sites that will reduce or eliminate the lengthy and expensive zoning hearings. Leasing space on existing towers owned by the local police and fire departments has already been mentioned. The United States Postal Service (USPS) real estate manager has recently made space at some of the 35,000 post offices around the country available for lease. The USPS estimates that there will be antennas and transmitters on fifty percent of post offices, either on the buildings if suitable or, if necessary, on towers erected nearby. In addition, there is pressure being put on the United States Park Service to allow antenna towers to be erected in some of the national parks.

For the user there is talk of new equipment, such as a triple-mode handset and system as was discussed earlier. In the house this handset will act as a cordless telephone by connecting by wireless with a base unit that is connected to the conventional wired telephone service. When used outside of the house, the handset will automatically connect with the local cellular service. The success of a service like this will depend on the cost of the user’s equipment and whether or not the user is willing to pay for these enhanced services. A test of such a system, carried out by a cellular carrier in late 1993 and 1994, has not resulted in any further installations of this type of service by any carrier. All of the industry will be keeping an eye on the success or failure of the Personal Handyphone System in Japan, which was mentioned earlier. The cellular carriers then will have to determine whether or not it will pay to install all of the new and expensive infrastructure that would be necessary to operate this new equipment. At the moment, there is some difference of opinion among the experts as to whether the cellular/PCS systems, in any form, will ever replace the wired telephone.

The same sort of thinking exists for the expanded use of cellular communications in the business world, mainly the development of systems that will more closely link the work environment to the outside world. The use of small antenna heads or a leaky cable type of antenna, which were described earlier, throughout a building or office will provide what amounts to a wireless private board exchange (PBX). This means that anyone can be reached anywhere at any time and that they are not tied to a desk and the conventional telephone. But, again, it is hard to tell whether this technology will woo the business community away from the wired system that has been in the office for so long. You may be sure that the telephone companies that have been in business for so long will do all that they can to keep their customers. You can also be sure that if they see that the change is becoming inevitable they will join it in some manner.

The analog system, used by most cellular carriers at the present time, will probably be gradually abandoned because it uses up too much of the valuable wireless spectrum, which will eventually will become too crowded for efficient service. A switch to the digital technology will free up a lot of spectrum space. Competing companies have developed two noncompatible digital systems that are both being used by some of the cellular carriers on the conventional 800-MHz systems today in the United States. Only time will tell which one will finally be adopted countrywide, which will have to happen if there is to be the seamless coverage of which the industry boasts and needs. Not only will the carriers have to upgrade their equipment, but the consumer will have to purchase new handsets. The Federal Communications Commission has taken a hands-off policy in technical matters like this, leaving the industry and market forces to make the decisions.

In Europe the situation is even more confused because there is still a mix of the government-owned and controlled companies in some countries, and privatized carriers in others. Then there are some countries in which the telecommunications company is made up of a mix of private and government control. At the present time the European Union (EU), the political and economic alliance of European countries sometimes referred to as the Common Market, is attempting to develop standards for a third generation cellular system. This is a difficult problem considering the mix of systems in existence at the present time. The EU is aiming toward a multifunction, multiservice digital system. It is not clear yet what sort of regulatory climate will develop for the telecommunications industry in Europe. It may be that some sort of European FCC will have to be organized as a part of the EU in the years to come.

In the rest of the world, each country has developed its own rules and regulations and it is difficult to find any significant coordination or cooperation between the many countries in areas such as Southeast Asia or Africa. It is almost certain that decisions regarding telecommunications will be made based on the technology developed elsewhere in the world. As developing countries become more business oriented and realize the need for efficient communication methods if the country and the economy is to grow, there will be no lack of companies that will be willing to fill this need.

The future of telecommunications in the United States, like in other areas of the world, will also be consumer driven. The possibility of only one wire entering a household, other than the electrical connection, has already been mentioned. This one wire would carry the local and long distance telephone service as well as the cable TV, but there are a number of regulatory and technical problems to be solved. The local and long distance telephone companies have to answer to the FCC and their state regulatory commissions, while cable companies are responsible to some different FCC regulations and to local community governments.

Then there is the possible introduction of satellite cellular service. This technology is of great interest to those countries that need to cover large land masses, such as China and Russia and the United States. The global coverage of a telephone service excites the industry, which sees a large market for the equipment that will have to be developed and built. But there are those who say that there will be little if any market for a satellite cellular service. They say that the seamless service now available countrywide in the United States eliminates the need for such a service. The interest in satellite cellular service does not extend to Europe, however, where it is believed that the existing terrestrial networks, along with the ground-based cellular services, are sufficient.

At the time of writing, there are four satellite systems planned using a variety of satellites, ranging in number up to 600. These are scheduled to go into full commercial service any time from late 1998 to early 2000. One of the systems plans to use dual mode handsets that will contact the traditional terrestrial cellular system when coverage is available and then switch automatically to the satellite network when required. All of the systems plan to offer voice, data, fax, paging and messaging facilities, and one will offer a position location service. The obvious question, of course, is whether there is a sufficient market for such a large amount of capacity. It is too soon to even make a guess.

It is expected that there will be a parallel growth in what we have called the paging services. It appears that more versatile pagers, with greater capabilities and which will grow to look more and more like the personal digital assistants, will be introduced. There has been mention of future paging service offering location tracking, which will have a large number of closely-spaced transceivers covering the country. These could be the transceivers of the nationwide PCS systems. Then, anyone carrying some sort of wireless communication device, most likely like a cellular handset, who turned their unit on could be located by the signal that would travel to the nearest transceiver or cell site. The system would know where to send messages to anyone anywhere in the country. There are a great many hurdles to overcome before a system as sophisticated as this could established.

Cellular telephones and pagers are one field that is certain to grow over the coming years and one that it wise to keep an eye on. It will not only help you to make your business more efficient and profitable, but also make your personal life simpler and more easily managed.