Three new cellular phone firms to enter L.A. market next year.

L.A.'s cellular airwaves are about to heat up in a big way.

Three new wireless phone companies are preparing to enter the market in 1997, taking the number of wireless firms from two to five.

The two current cellular firms, L.A. Cellular Telephone Co. of Cerritos and AirTouch Communications of Irvine, have already launched a series of aggressively-priced subscription plans and ad campaigns to sign up new customers before the competition arrives.

But the three new providers on the horizon say they will offer better service and more options than cellular firms - and they are urging consumers to wait before signing up for the latest offerings from L.A. Cellular and AirTouch.

All three of the new wireless phone companies will use systems built with personal communications systems technology, known as PCS.

PCS looks and operates much like conventional cellular services. But while cellular services use a hybrid of digital and older analog technology to transmit calls, PCS services will be 100 percent digital, which will provide better sound quality and more service options, say PCS carriers.

But there will be a cost: PCS systems use different frequencies from cellular service, which require subscribers to purchase special phones that start at about $150 each. Existing cellular subscribers won't be able to use their old phones for the new service.

Of the three PCS players, Pacific Bell Mobile Services, a subsidiary of San Francisco-based Pacific Telesis Group, is the only one with any service up and running in Southern California. (Ironically, AirTouch was spun off from Pacific Telesis.)

PacBell launched its San Diego service in November and has PCS systems in San Diego and Orange counties. Its L.A. County system is 80 percent complete, but officials are keeping mum over when they plan to launch service.

PacBell spokeswoman Linda Bonniksen would only say that L.A. service will begin sometime next year.

Another PCS player in L.A. is expected to be Irvine-based Cox California PCS, a partnership led by Atlanta-based Cox Communications Inc.

Cox plans to launch its PCS service in at least one Southern California market shortly, although it has yet to announce which markets will come on-stream first and when service will begin in L.A., according to Cox spokeswoman Marty Zajic.

Cox's network will eventually cover Southern California from San Luis Obispo in the north to San Diego in the south, Zajic added.

The third new player is NextWave Telecom Inc. of San Diego, which started building its Southern California network later than PacBell and Cox and plans to launch its L.A. service by the fourth quarter of 1997, according to Jim Madsen, NextWave's senior vice president of business development.

If other parts of the country are any indication, the new PCS providers should enjoy some success after their initial L.A. roll-outs, according to Bill Menezes, deputy editor of Wireless Week, a Denver-based publication covering the wireless phone industry.

Phone Wars

Competition for cellular phone service will increase next year

Company                         Headquarters     L.A. Launch Date

AirTouch Communications         Irvine           June 1984
L.A. Cellular Telephone Co.     Cerritos         March 1987(*)
Pacific Bell Mobile Services    San Francisco    1997
Cox Communications PCS          Irvine           1997
NextWave Telecom Inc.           San Diego        fourth quarter
1997

* L.A. Cellular began service as a cellular reseller in 1984 but
did not launch service on its own system until 1987.

"(The PCS companies) typically come in with lower rates than cellular, plus they give additional services such as voice mail, call waiting and caller ID, all in the same package," he said.

Indeed, PacBell is currently offering perks such as call forwarding, call hold and conference calling free of charge to new San Diego PCS subscribers. PacBell also makes no charge for the first minute of all incoming calls, allowing subscribers to effectively screen calls and not pay for incoming calls they can take later.

Another feature being touted by PCS companies is their lack of long-term service contracts, which are relatively common among cellular providers.

Most PCS companies have said they will offer service on a month-to-month renewal basis, whereas both AirTouch and L.A. Cellular charge stiff penalties - usually in excess of $100 - for customers who cancel before the end of their one- or two-year contracts.

In response to the perks, greater service options and lower prices of PCS, cellular providers have typically lowered their rates or offered more perks in markets after the entry of new competition, said Menezes.

Already, cellular rates in L.A. County have dropped more than 30 percent over the last two years, with much of that coming over the past year, said AirTouch spokeswoman Melissa May.

"To some extent, our prices have been coming down for the last couple years since (telecommunications) deregulation began. But that process has also probably escalated with the threat of more competition," she said.

Like others in the cellular industry, May expressed her view that much of what PCS firms have to offer is little more than hype involving the repackaging of technologies and service options that already exist or will soon become available to cellular customers.

"The services they're going to be offering are what we're already offering or are going to offer soon," said May. "We see it as the big 'So what?'"