Digital cellular service : PCS & Low Earth-Orbiting Satellites

Digital cellular service
In the late 1990s, carriers began migrating their customers from analog service to digital cellular service. Digital cellular allows carriers to increase privacy, reduce cloning fraud, and increase capacity by 3 to 10 times. Digital cellular signals are multiplexed and scrambled, making it more difficult for eavesdroppers to listen in to a conversation. Digital service also includes more features such as caller ID, call waiting, repeat dialing, and call return. A carrier that upgrades from analog to digital technology can offer better service to more customers.

PCS
In the early 1990s, the FCC auctioned off six more bands of the airwaves to be used for personal communications service (PCS). The auction was controversial and the stakes were high. Many people complained that the government had no right to collect money by “selling” the airwaves. The bids at the auction were much higher than predicted and the government was surprised at how much money it raised. The auction of the A, B, and C blocks netted the U.S. Treasury $17.9 billion. In the Washington/Baltimore market alone, AT&T Wireless paid $211,771,000 just for the right to broadcast phone calls. Some of the entrepreneurs who got the bids eventually defaulted on the payments. Consequently, PCS service was not rolled out as quickly as planned.

PCS service uses digital technology and is rich with features. PCS also uses less complex pricing and billing schemes than traditional cellular service. Because of these advantages, wireless carriers and customers alike are making the shift from analog wireless services to PCS.

Low Earth-Orbiting Satellites
Low earth-orbiting satellites (LEOS) provide wireless telephone service for users across the globe. The handheld phone transmits and receives signals to and from geosynchronous satellites. Once enough satellites are launched into space, a caller should be able to make and receive calls anywhere across the globe. This revolutionary technology will allow people everywhere to make voice calls, transmit data, or connect to the Internet from anywhere. The concept is especially attractive in isolated places such as the Andes Mountains, where the telecommunications infrastructure is significantly underdeveloped.

LEOS technology has many glitches, however. During the recent war in Kosovo, telephone lines were severely damaged. News correspondents brought in satellite phones to call the outside world. In spite of the hefty $2,000 to $3,000 price tag, these phones rarely worked properly, especially when used indoors.

Probably the biggest problem facing rapid LEOS deployment is the high cost of building the network. In 1998, the Iridium Company, daughter company of Motorola, first offered global wireless telephone service. Iridium spent more than $5 billion building its 66-satellite constellation that would provide coverage throughout the world. But in its first 2 years, the company enrolled only 10,000 customers. A small customer base means small revenue, and in 2000, Iriduim filed for bankruptcy. What began as a dynamic cutting-edge high-tech company quickly died as the result of financial problems. Even its major supporter, Motorola, refused to bail the company out. Iridium is now back in business, but it mainly targets commercial users in remote parts of the world, such as off-shore locations.