Business Users the First to Benefit from the Promise of Cellular Radio.
Have you ever noticed how yesterday's fiction has a way of becoming today's reality? For example, 50 years ago the old Buck Rogers comic strip was science fiction. But today in the United States, we have a full-fledged space program and recently completed our ninth Space Shuttle mission.
Like space ships, mobile and portable telecommunications were once only fiction. Television secret agent Maxwell Smart communicated with his boss at headquarters by way of a portable telephone hidden in the heel of his shoe. And we all remember Dick Tracy's wristwatch radio/telephone. Today, however, thanks to the tremendous advances in mobile telephone technology, you do not have to be a television spy, a cartoon detective or even a VIP to own a mobile phone. Mobile communications are now within the grasp of ordinary people. Even the most conservative industry estimates lead one to believe that, someday soon, the mobile phone will be as familiar a part of your car as an AM radio, and will also be a commonplace--and perhaps necessary --addition to every business person's briefcase.
Long Evolutionary Road
This startling advance did not come about overnight. In a more primitive form, mobile telephone service--the grandfather of today's cellular radio systems --has been available for quite a long time, but only to a limited number of customers at an extremely high cost. In one use, AT&T provided mobile communications to New York City police cars in 1924. But the first mobile system designed for commercial use was a "manual' system developed by AT&T Bell Laboratories and put into service in 1946.
This system was a push-to-talk operation and had a very limited number of channels available for use. It depended solely on operators for completing calls from one mobile station to another. In order to place a call, a user first had to push a button on the handset (the manual system had no dial) to send a signal to the operator, and the operator would then place the call using central office telephone equipment. Finally, the customer would be connected to the party--but even after all that the quality of the call left a lot to be desired.
In 1964, mobile communications were refined with the introduction of Improved Mobile Telephone Service (IMTS), which eliminated the need for operator intervention in mobile calls. IMTS--today's conventional mobile service--instituted multi-channel trucking, which provided automatic channel selection for each call and became the standard for mobile telephone service. The system's channels were operated from a single master antenna which ensured coverage for up to 20 to 25 miles from the transmission site. However, because of the high power of the transmitter, frequencies used in one city could not be used in a neighboring city some 50 to 100 miles away. Although the signal was weak beyond 25 miles, it was still strong enough to interfere with other mobile communications on the same frequency. This limited the number of channels available, making it difficult to complete a call because too many people were vying for very few channels.
Throughout the years, demand for mobile communications continued to be quite strong, despite its two most serious drawbacks--a lack of sufficient spectrum and high cost due to the limited number of subscribers. Telephone companies kept long lists of people who were waiting for mobile service--even though it was often at lest 10 times as expensive as regular home service. But because of the limited number of channels made available to land mobile service by the FCC, it was impossible to accommodate all the customers who wanted to obtain mobile telephone service.
Eventually it became obvious that an efficient, large-scale system was needed to satisfy customer demand and improve existing service. Recognizing its obligation to make better use of the available radio spectrum, the FCC in 1974 decided to allocate 40 MHz for use by land mobile services. The FCC invited interested parties in the industry to submit proposals for plans to use effectively the additional spectrum. In response, AT&T Bell Laboratories submitted a report proposing the concept of cellular radio as a solution to the problems of mobile communications.
Unfortunately, regulatory problems delayed the implementation of the system for many years. But the original proposal was the basis for the high-capacity mobile telephone system, designed by AT&T Bell laboratories and manufactured by AT&T Technologies, which underwent a highly successful four-year trial in Chicago beginning in 1978. In October of last year, AT&T's Autoplex Cellular Telecommunication System--the first domestic commercial cellular system-- was introduced into service in Chicago by Ameritech Mobile Communications (see story, page 60).
The FCC identified 30 major metropolitan areas for the marketing of cellular services; Chicago was the first of these, as noted above.
Within the next two years, cellular communications are expected to be available in these 30 major metropolitan markets, plus an additional 60 smaller markets in the near future.
Today's cellular telecommunications systems represent the merging of sophisticated electronic switching technology and computer-controlled radio technology. Cellular radio gets its name from the geographic "cells' into which a service area is divided. Each cell contains its own low-powered radio transmitters and receivers. Cellular systems are able to handle calls simultaneously without the calls interfering with each other by reusing the frequencies of cells that are far enough apart.
Cellular radio's ability to reuse frequencies and to split cells to accommodate growth in demand eliminates all the problems of early mobile systems. The cellular systems of today use the radio spectrum efficiently, are able to grow gradually to supply service in response to geographic patterns of demand, and use stored-program controlled switching to increase call-handling capabilities. These features make the quality of the new mobile service is high as that for basic residence or business service, and represent an exciting new communications alternative, especially for business.
Industry predictions on the future demand for cellular radio range from extremely enthusiastic to cautiously optimistic. By 1990, the number of cellular radio users is projected anywhere from 1.0 to 2.5 million, with those users expected to generate annual revenues ranging from $1.5 to $4 billion. If Chicago is to be seen as any kind of indicator for the potential market for cellular, these estimates may not be far off the mark. Since Ameritech first cut over AT&T's Autoplex system, Ameritech has been signing on more than 500 new subscribers per week.
Extremely Promising Future
To get an idea of the conceivable market for cellular radio telecommunications, just look around some day when you and your car are stuck in traffic. There are some 160,000,000 vehicles in this country of every shape, size and model imaginable. That's a staggering number in itself, but when added to the extremely promising market for portables (phones that users will be able to carry with them), the cellular radio market looks exceptionally bright with promise.
Cellular radio should be particularly attractive to business as a communications alternative or addition. If, as they say, time is money, then in a business world increasingly pressed for time, cellular radio will help salvage time that was previously wasted. Cellular systems will allow people to handle a variety of business-related phone calls while in transit, and therefore significantly increase productivity.
Today, cellular radio is expensive when compared to the cost of regular phone service. Because of the expense involved, most of the initial cellular subscribers will be businesses. The cost of obtaining cellular services involves three elements: the cost of renting or buying the cellular telephone itself, a service charge for access to the system and, of course, a charge for telephone calls using the system. Today the monthly cost for typical cellular service is estimated at between $150 and $300. Competition, technological advances and an increased number of subscribers should combine to drive down that cost substantially, perhaps to as low as $50 or $75 per month by the end of the decade.
Despite its cost, cellular radio represents a real bargain to businesses in terms of the economic gains that could be made due to increased flexibility and responsiveness. Business persons working in fields such as medicine, journalism, construction, sales, public safety, law and service industries are finding that the ability to have instant access to employees, customers and records while in transit can lead to significantly increased revenues.
For example, most sales persons normally spend a great deal of time traveling throughout their sales territories to visit current or potential customers. Unfortunately, much of a sales person's valuable time is wasted driving in a car. With cellular systems, sales people can use their time on the road more constructively by calling the home office to report on the status of customer accounts, reciting correspondence to automatic dictation machines or talking to customers.
As the person responsible for field support and manufacturing planning for my company's Autoplex cellular telecommunications systems, I had a cellular telephone installed in my car about two years ago. Since then, I have found that I make far more efficient use of the two hours I spend each day commuting between my home in the northern suburbs of Chicago and my office in Lisle, Illinois. On my way to work in the morning, I frequently contact my colleagues in the East whose work day begins a bit earlier than mine. And in the evenings on my way home from the office I can talk to my co-workers on the West Coast.
Cellular radio is truly a revolution in telecommunications. In a sense, it's as exciting and important to business as the invention of the automobile, airplane or even the telephone itself. And it may have just as dramatic and impact on our lives as the exciting innovations that preceded it.
In terms of potential, cellular radio is still in its infancy. The development of an inexpensive, lightweight portable phone and other technological advancements will be a key to the future growth of the cellular market.
Someday, the briefcase phone will revolutionize communications in cities where people use cars infrequently. And many suggest that in rural areas, cellular service may eventually replace the traditional wire-line service because it will be less expensive, more efficient and offer state-of-the-art features.
General Motors has announced that it is offering an AT&T telephone for use with cellular communications service in its 1984 Buick Riviera Coupe cars. And, undoubtedly, other car makers will soon follow suit. Car rental companies are also offering mobile phone service to their Chicago customers. As cellular service is expanded to other cities, automobile manufacturers, car rental agencies and others will certainly begin offering cellular communications to their customers.
Future developments in cellular equipment will provide users with a full range of data transmission capabilities. These advances will give subscribers instant access to such information as inventory levels, service records or a patient's medical history. For cellular radio systems, I think the best is yet to come. The cellular systems of tomorrow will offer complete freedom from wires and a full range of telecommunications services that users will be able to take advantage of--anytime and anywhere.
Photo: The western suburb of Carol Stream is one of the Autoplex antenna sites for the first US commercial cellular service offered by Ameritech Mobile Communications in the Chicago area.
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|Date:||Feb 1, 1984|
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