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Industry News

The Commercial Market

July 1, 1998
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The Commercial Market

2.4 GHz Cordless Telephones to Debut in September

Panasonic has introduced a new generation of cordless telephones that operate in the new 2.4 GHz band allocated recently by the Federal Communications Commission (FCC) for personal communications. The telephones, which will be available in September, reportedly offer up to 20-times the range of the company's 43/49 MHz cordless telephones and up to eight-times the range of the 900 MHz models. The new telephones utilize hybrid frequency technology, transmitting at 2.4 GHz from the base unit and 900 MHz from the handset. Direct-sequence spread spectrum technology is also employed in transmissions along with separate transmit and receive antennas on the base units. Suggested retail prices for the telephones range from $200 for a basic unit to $300 for a model equipped with a speakerphone and answering system.

Study Finds US Analog Cellular Reception Quality Superior to Digital PCS

A recent survey conducted by Herschel Shosteck Associates Ltd., "The Perceived Quality of Cellular/PCS Reception" (Vol. 7, No. 4), indicates that the average quality of US analog 800 MHz cellular service is considered superior to 1900 MHz personal communications service (PCS). An earlier survey conducted in the Washington/Baltimore area six months after the launch of the APC Sprint PCS system revealed that the average reception quality of two competitive cellular systems rated better than the PCS system. The advantage was attributed to the maturity of the cellular systems and their denser coverage.

Herschel Shosteck Associates has been conducting surveys each quarter since 1987 to measure the perceived reception quality of cellular and, more recently, PCS systems in 10 major US markets and the remaining markets combined. Survey interviews are conducted with carriers, resellers and agent dealers who use multiple systems as opposed to consumers who use single systems. On a scale of 1 to 5 with 1 representing very good and 5 representing very poor, the average perceived reception quality for 800 MHz cellular and 1900 MHz PCS systems for the entire US consistently favored cellular systems for each of the quarters beginning in December 1996 through September 1997. The best PCS rating during that period was 2.68 for the quarter ending March 1997; the worst was 3.10 for the June 1997 quarter. Cellular's best rating was 2.23 in the December 1996 quarter; its worst showing was 2.42 in the June 1997 quarter.

While PCS systems tend to be rated very good or good in their core coverage areas, ratings in their peripheral areas tend to be poor or very poor. Cellular systems rarely are rated very good due to their heavy traffic and consequent greater interference. However, the systems typically rate higher than PCS.

Another analysis of September 1997 data rates the various 1900 MHz digital technologies against 800 MHz analog/digital technology. Global System for Mobile communications fared worst in this comparison with a rating of 3.19. Code-division multiple access and time-division multiple access ranked almost even with ratings of 3.08 and 3.05, respectively. The 800 MHz services ranked best at 2.41. For additional information, contact Herschel Shosteck Associates at (301) 589-2259.

Australian Defence Force Leases Former US Navy Satellite Transponders

Under the terms of an agreement between Hughes Global Services Inc., PanAmSat Corp. and the Australian Defence Force, a communications satellite built by Hughes and used formerly by the US Navy is providing new communications services to the Australian Defence Force. (Since the US Department of Defense no longer required the satellite's capacity, the spacecraft was within days of being propelled into useless orbit.) The Leasat 5 satellite began its service to the royal Australian navy in May as part of a multimillion-dollar contract with Hughes Global Services and is positioned at a new orbital location at 156° east longitude. If all contract options are exercised, the satellite will provide UHF communications services to the Australian Defence Force for five years.

PanAmSat (which owns and operates Leasat 5) is providing the satellite capacity to Hughes Global Services and will monitor and control the spacecraft's attitude and orbital position as well as its communications payload. This communications payload comprises two large helical UHF antennas that provide receive and transmit functions in the 240 to 400 MHz UHF band. Twelve UHF repeaters provide the main communications capability.

Globalstar to Provide Service to Gulf States and Middle East

Globalstar has announced an agreement with Saudi Arabia-based holding company Al-Murjan for the distribution of Globalstar mobile satellite services throughout the Gulf States and the Middle East. Under the terms of the agreement, Al-Murjan will act as the sole distributor of Globalstar mobile satellite services in Kuwait, United Arab Emirates, Qatar, Oman, Yemen, Jordan, Syria and Bahrain. It will also own and operate a Globalstar ground station and obtain all regulatory approvals for interconnecting the Globalstar system with existing wireline and wireless infrastructure in those countries.

The International Telecommunications Union estimates that there are approximately 6.3 telephone lines per 100 people in the Middle East and approximately 1.2 million cellular users (a count that has been doubling every three years). The dual-mode (cellular and satellite) Globalstar system is particularly suited to extend cellular-type service in regions where it has not been cost effective or practical to build out terrestrial infrastructure. Globalstar also will offer affordable basic telephony in remote regions that have little or no telephone service.

Mexican Spectrum Auction Produces Big Winners

The auction of Mexican PCS and wireless licenses, which began in November 1997 and concluded May 8 after 128 rounds of bidding, yielded over 8.5 B pesos ($1.1 B) and produced several big license winners. The SPC consortium won all nine A-band 30 MHz licenses for approximately $274.2 M and one 3.4 to 3.7 GHz license in each of nine regions for an additional $26.8 M. The consortium is headed by the owners of Mexican broadcaster TV Azteca and the Elektra retail store chain. QUALCOMM won B-band 30 MHz PCS licenses in regions 1, 2, 4, 6 and 9 at a cost of $251.5 M as well as additional 10 MHz PCS licenses in regions 3, 5, 7 and 8 for $20.7 M. Midicell was awarded two 3.4 to 3.7 GHz licenses in all nine regions for $45.3 M, a B-band PCS license in region 7 for $9.5 M and 10 MHz licenses in regions 2, 6 and 9 for $71.9 M. All of Midicell's license awards will cost approximately $127.3 M (including five fixed wireless licenses in the 400 MHz range for approximately $563 K). Telmex, the principal Mexican wireline carrier, and Telinor both were awarded two 3.4 to 3.7 GHz licenses in each of the nine regions for $50.7 M and $56 M, respectively. Telcel, Telmex's cellular affiliate, won 10 MHz licenses in all nine regions for $159 M, and Iusacell won 10 MHz PCS licenses in regions 1 and 4 for $61.7 M.

Overall, the Mexican PCS auction rules are similar to those used by the FCC in the US PCS auctions. However, several significant differences exist. The term of the Mexican license is 20 years as opposed to the US' 10-year term. In addition, the Mexican government will require a payment based on the value of the license at the end of the license period. The Mexican government did not provide any financing of the winning bid amounts, which were payable upon the conclusion of the auction. Each winning bid amount was also subject to a value-added tax.

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