FRAMINGHAM (04/10/2000) - The fragmented U.S. wireless communications industry is in the midst of a large-scale, much-needed consolidation, according to analysts and corporate users, who say they hope the new national megacarriers can deliver improved and truly nationwide wireless voice and data services.
Last week, BellSouth Corp. in Atlanta and SBC Communications Inc. in San Antonio announced plans to combine their wireless operations, forming the country's second-largest wireless carrier. Customer service, nationwide roaming and flat-rate pricing for heavy users were key factors in the decision, according to company officials.
The development came a week after formal government approval of a joint venture between New York-based Bell Atlantic Corp. and London-based Vodafone AirTouch PLC, making it the largest wireless carrier in the U.S.
Keith Pagluch, a vice president at Sprint PCS Group in Kansas City, Missouri, said he views the consolidation in the industry as inevitable, given customer demands. Sprint PCS bills itself as the only true national wireless carrier.
"We have always subscribed to the idea that the best way to be in this business is to be a nationwide carrier," Pagluch said. "Customers want to go anywhere and use the network as if they were at home."
Improved Coverage to Come
Alan Reiter, an analyst at Wireless Internet & Mobile Computing in Chevy Chase, Maryland, said that although the integration of regional networks such as those controlled by BellSouth/SBC and Bell Atlantic/Vodafone does undoubtedly improve coverage, that doesn't happen overnight.
"These companies are going to have to spend a lot of time and effort integrating systems such as customer support and billing," Reiter said.
The wireless carriers also need economies of scale to bid on and then build next-generation wireless systems, the cost of which will amount to billions of dollars, Reiter said. He cited the fight for spectrum in the U.K., which pushed bids for next-generation bandwidth to $22.6 billion last week.
Douglas Caffrey Fields, vice president of telecommunications at United Parcel Service of America Inc. in Atlanta, welcomed the new wireless joint ventures.
The consolidation will result "in some large-mass carriers that have the capability to compete with one another, and generally I think that's good for the subscriber," he said.
Despite the promise of future "seamless" services touted by the architects of these joint ventures, some corporate users remain skeptical.
Kevin Loveless, president of Global Travel in Boise, Idaho, said that from his perspective, the go-anywhere wireless service won't be a reality until carriers in the U.S. adopt standards that are used by the rest of the world.
"Without standards, it seems to me, there is a potential I still have to deal with different services," Loveless said. "I want a world phone."