Booming Cellular Industry Will Require Management Services and Software Support.
"Never before has there been a more fully integrated and complex business as cellular radiotelephony, which will let subscribers become truly mobile, allowing them to place calls, at will, anywhere in the country,' notes and enthusiastic Martin Cooper. And when it comes to cellular, Marty Cooper should know. Until recently, he was a vice president and director of research and development at Motorola, where he had established many new businesses for the firm, building current aggregate sales of more than $500 million. He's an inventor and noted authority in the mobile radio industry for over 25 years, and he led Motorola into the cellular radiotelephone business in 1969. His contributions include the creation and development of the first trunked mobile radio systems, the Page Boy II pagers and the Metro terminals that ushered in high-capacity common carrier paging.
Now he's chairman of Cellular Business Systems, a Chicago-based information management company for the emerging cellular radio industry.
Hugh Growth Expected
Cooper points out that car telephone and portable telephone service will be offered in over a dozen cities during 1984, with revenues growing to "over $2 billion in equipment and $6 billion to $8 billion by 1994. A million subscribers will use the service in 1984. They will purchase about $2 billion in equipment and will be serviced by systems which require about a $1.5 billion investment in fixed plant.'
According to Cooper, "The market need for car telephones and portable telephones has been exhaustively studied and tested at cost in excess of $100 million, in full-scale operations in two cities. Estimates have ranged from the figures discussed here to predictions several times higher by AT&T. The first commercial sales in the Chicago market are exceeding expectations.' (See separate story, page 60.)
Noting that the FCC allows cellular radiotelephone service to be offered by two competing common carriers--one a wireline common carrier such as a phone company, and the other an independent radio common carrier, Cooper explains that "while a strong radio common carrier industry already exists to provide paging and mobile telephone service, the size and growth of the opportunity and the large investment required have attracted a number of major companies who have the resources to effectively enter the cellular market. Companies like Western Union, MCI, Metromedia and Graphic Scanning have committed to the FCC to invest several hundred million dollars each to build the fixed plant in the top 90 US cities. Dozens of other companies have made similar commitments for fewer cities or as partners with the others.'
Agreements Speed OKs
Adding that the FCC must select and grant a license to each of the two operators in each city, Cooper points out that over a thousand applications were submitted in the top 90 cities, but agreements among applicants have already resolved the issue for about 40 licenses adn the FCC comparative hearings will soon result in further resolution.
Need Aggressive Plan
Then the lucky recipients of a license must build the city-wide infrastructure needed for cellular systems in large cities, then arrange for installation, maintenance and billing of the large number of subscribers. "Most importantly,' says Cooper, "they must develop and execute an aggressive marketing campaign to garner a reasonable share of the market; a headstart by one of the two licensees will be difficult to overcome by the other. Additionally, the operator and other directly involved entities must manage the business, provide inventory control and accounting services, and integrate the activities of a variety of organizations, each vital in serving the customer.'
No Comparable Business
Cooper adds, "No comparable business or infrastructure exists today either in function or magnitude. There is no experienced management, no base of support software and no computer service bureau dedicated to the cellular industry.
"Because of the complexity of the cellular entities and the geographic dispersion of the assets, the computer systems needed to market and manage are unique, complex and non-existent.'
Enter Cooper's Cellular Business Systems. Cooper feels that by allowing a firm such as his to provide a source of software, computer services and management services, it allows the carriers to focus their management talents on constructing and operating the cellular system, as well as on marketing, regulatory involvement and vital interconnection matters.
His firm, for example, is developing a number of software packages for integration into a coordinated system. It will license these packages to entities having their own computer operations and desiring to staff all their functions internally, although it will also perform computer services and will fully staff support service functions with its personnel.
Because a cellular user can receive service when traveling from city to city, Cooper also sees a great need to handle the transfer of billing information, known as "clearing,' between the subscriber's home city and the city in which he or she desires service. It also requires verification of credit or a credit card system.
Need Support Systems
Cooper concludes that "The increase in radio telephone usage will generate monumental amounts of information processing, requiring sophisticated support systems that are efficient and responsive to the vast needs of the cellular industry.'
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|Date:||Feb 1, 1984|
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