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Going Global - World Phones Coming At You
Going Global - World Phones Coming At You

You feel like an emasculated geek; you have to feel that low when you get off the plane in Hong Kong or London or Cape Town and suddenly, your wireless devices do not work. They just sit in your pockets, useless, and bigger than the loss of any cool, is that you are simply out of touch, unreachable. Big deals may be pending - clients may be screeching for attention - but none of this will come your way because the probability is enormous that, abroad, your wireless devices are so much inert plastic.

And that is definitely not the promise of wireless. Business travelers accordingly feel let down, betrayed even, when they travel abroad, and nowadays this message is hitting home. "There's a need for seamless telephony for global travelers that carriers recognize," says Andrew Cole, leader of the global wireless practice at consulting firm Adventis.

Increasingly, too, carriers are taking steps to satisfy this need: "Carriers now are seeking to meet the demand for world phones," says Cole.

How? Two years ago there were no easily available global roaming options for U.S. customers, but that changed in April 2000 when Nextel "was the first to come out with global roaming," says Gary Jankowski, a Nextel senior marketing manager. What Nextel offered was a one-phone, one-number solution that meant a Newark, New Jersey executive could get off the plane in Heathrow or Frankfurt and his cell phone would work, both for making outgoing calls and receiving incoming ones. The system wasn't perfect - coverage in foreign countries wasn't necessarily flawless - but it pretty much delivered worldwide voice roaming, and right there Nextel had launched a revolution.

The Nextel announcement in turn triggered an avalanche of competing offerings - VoiceStream, Cingular and AT&T all market some form of world phone service - but there are facts to know here and a first fact is that, wishes aside, we are nowhere near a world of seamless interconnectivity for wireless devices. What works conveniently and affordably in New York and London may not work in Santiago, Chile, almost certainly will not work in Tokyo, and definitely won't function at all in Argentinian Patagonia (although there are options there - stay tuned).

In most places, most of the time, however, global roaming for voice works well, and the fact is, there isn't much that's complicated in setting up such services. Three components are needed, says Blake Svensrud, CEO of WorldCell, a provider of global wireless services. Svensrud ticks off the building blocks:

  • Bilateral, intercarrier roaming agreements.
  • Data clearing between the visited and host network. This involves both validating that the visitor has a right to use the network and also providing the user's home carrier with data for use in billing.
  • Financial settlements (where visited networks are compensated for use of their facilities).

    None of that is new, all of it has been thoroughly demonstrated, and so - quite realistically - world travelers have a right to expect cell phone service in large parts of the world.

    A fourth necessity mentioned by many analysts is the need for reliable fraud prevention tools, and this is a hitch that sometimes blocks users from accessing the cell phone services they feel entitled to. As digital technologies have spread, worries about fraud have diminished but they have not vanished, and the upshot is that sometimes cellular network access will be denied legitimate visitors because the system has detected the possibility of fraud. This is an understandably huge aggravation to travelers but there are no predictions about when fraud will become so inconsequential that there will be no more denials of service. For now, the clear message is: "work with your carrier before you leave to ensure you get the service you expect," says Audrey Schaefer, director of corporate communications for Nextel.

    Even when a user does that, however, it doesn't mean world phone service has reached a reliable level of usability. Here's why: "The technology for providing a world phone for voice is adequate," says Cole, "but very inadequate for data. It is proving difficult to have data services roam with world travelers." Stay tuned for more on that because this may be the thorniest and ugliest issue in today's global wireless world.

    The Globe in Your Hands
    First, feast on the good news, and a bright spot is that handset makers are racing to give road warriors dependable wireless tools. "The market for world phones is definitely growing," says Florian Seiche, vice president and general manager of mobile phones at Siemens. Buyers will be traveling business professionals or "those who want the latest in technology, whether they travel extensively or not," says Seiche, who indicates that these are small but still significant target groups.

    Siemens isn't alone. Nokia, Motorola, and Ericsson are all steaming forward with world phone development programs. Nobody, frankly, seems to be recording substantial sales, but no handset maker is backing off world phone development, either. Still, one problem that plagues all world phones is that their existence may be unknown to possible buyers. Carrier support for high-end phones has been slender. Most carriers are preoccupied with driving up subscriber numbers, and the usual bait is a free or very low-cost plain-Jane phone. Pricier models are left to languish, frequently with little visibility, in retail shops. One upshot: all handset makers realize that to sell world phones, they themselves will have to carry a heavier marketing burden and so far, with overall sales proving sluggish in the recessionary economy, the big handset makers are hanging back from spending these dollars.

    Even so, at Siemens for instance, development of world phones remains aggressive, according to Seiche. The company offers several models (including the spiffy S40, supported by Cingular). Going forward, Seiche and Siemens are convinced this market can only get bigger and the reasoning is scrupulously bottomline oriented. "Carriers need new ways to generate revenues and global roaming will do that," says Seiche.

    This is all the more critical because no analyst thinks the carriers' current strategy of recruiting subscribers by dangling very low-cost plans will result in near-term profit improvements. Carriers need to be hunting for products and services to sell to high-end customers, and featured on any list of high-end products is global roaming. That is a big reason why optimism continues to reign in this niche.

    GSM Rules
    Another issue fueling the spread of global roaming: international cell phone carriers have aggressively penetrated the U.S. market. "Global alliances among carriers will make global roaming easier," says Seiche, who points to Deutsche Telekom's acquisition of VoiceStream in June 2001. "The future is getting brighter for global roaming," says Seiche.

    What is the present? Pretty good, if the user carries a GSM phone, says Priscilla Lu, CEO of Santa Clara, California-based interWAVE Communications, a developer of software and hardware for cellular networks. "GSM has a clear lead that will only widen," says Lu, who indicates that GSM bands claim 70% of global digital subscribers (and 65% of all cellular subscribers). "GSM is the closest to being a global standard," agrees Roger Quayle, CTO of IPWireless, a developer of broadband wireless data solutions.

    Globally, GSM is especially strong in Western Europe (where it claims about 365-million subscribers, according to GSM Association data); Asia Pacific (203-million subscribers); and Africa (28-million subscribers). Paradoxically, it is weakest in the U.S. (13-million subscribers in the U.S. and Canada), but that number may be vaulting upward as VoiceStream, Cingular, and AT&T all throw dollars at building out domestic GSM networks. Nobody predicts that GSM will soon surpass competing technologies in the U.S., but even for customers who use different networks, there's an easy solution: multiband phones that also feature GSM. "That's how we provide our users with global roaming," says Nextel's Jankowski, who explains that subscribers carry a phone equipped to operate both on the Nextel iDEN network and GSM networks. "For our subscribers that's the easiest solution," says Jankowski.

    Service Face-Offs
    Brief looks at four competing programs give quick insight into how these services work:

  • Nextel: Nextel's Worldwide Service lets subscribers (numbering around 100,000, according to Nextel's Schaefer, use one phone, one number in 80+ countries around the globe. Rates range from 20¢ per minute in much of Canada to $1.29 per minute in most of Mexico and western Europe, and rarely top $2.99 (India).

    "A call that might cost $6 from a London hotel would cost only $1.29 using our phone," says Schaefer.

    "We offer maximum convenience at a good price," says Jankowski, who indicates that the Nextel world phone (a Motorola i2000plus) operates on the 900MHz GSM band.

    A hitch for Nextel - one that all carriers face in one way or another - involves SMS messages. "You'll receive your messages when overseas, but you won't be able to reply or initiate new messages," says Jankowski. Note this, however: no carrier can offer better, for reasons revealed below.

  • VoiceStream: "With our ownership, global roaming is very important to VoiceStream," says communications director Kim Thompson, who indicates that from the get-go VoiceStream and its parent, Deutsche Telekom, have planned to offer subscribers competitively priced international calling. Simplifying matters: VoiceStream is a GSM network. Service is available in about 80 countries and per-minute rates vary from 99¢ (in 26 European countries) to $4.99 (Indonesia, Russia and a few other exotic locations). The only requirement for subscribers to access VoiceStream's global calling capabilities: they have to buy a designated world phone, either an Ericsson T28 or Motorola's P280. What about wireless data abroad? Thompson acknowledges it's not yet a reality and she also says "we do not yet have a time frame of when it might be available."

  • Cingular: "Global roaming is a critical service for a segment of our business customers," says Tim Hogan, vice president for business marketing with Cingular. Cingular's rates are stiffer than their competitors': $2.49 per minute for outgoing calls, $3.99 per minute for incoming, and prices are applied to all 67 countries where Cingular has roaming agreements. But, according to Hogan, the users who want world phone services tend not to be especially price-sensitive.

    The usual must-have is a world phone capable of operating on three GSM bands (1900MHz in the U.S., and 900 and 1800 MHz abroad). Cingular customers can choose between an Ericsson T28 or a Nokia 8890.

    With somewhat more optimism than other carriers, Cingular admits that wireless data abroad is a problem but, insists Hogan, "we are working on solving this with our international partners. For our customers, wireless data goes hand-in-hand with voice. We see reliable data roaming as a paramount need and we will offer it abroad." When? Hogan is less explicit about the time frame but, he promises, for Cingular this is a high priority. "We need to tweak our international roaming agreements to cover data and that is a process we are beginning."

  • AT&T: AT&T's WorldConnect is the only major carrier that imposes an extra monthly fee for users of their global roaming service ($7.99), and calls are charged at 99¢ per minute plus applicable international long distance charges (which vary from 35¢ per minute in western Europe to 95¢ in Africa). AT&T Wireless customers can use any of nine phones (handsets from Ericsson, Nokia, or Motorola) for international roaming.

    What about the others? Virtually all U.S. carriers offer some kind of global roaming - and analysts believe that going forward, offerings will get richer, costs will drop, and eventually callers will truly experience something near a seamless network where one phone will in fact work pretty much universally. By when? "I'd say within three years," says IPWireless's Quayle.

    Data Busters
    So, why is data proving to be the global sore spot? While the mechanics of voice roaming are well-understood - the industry has over a decade of experience administering voice roaming pacts and there's plentiful technology for validating users and billing for time - there is no history with data roaming. Case in point: How is data charged? By time (as with voice), or by byte? How are systems established to have data follow the user as he or she travels from country to country? How are visitors validated? Nobody knows the answers yet and the upshot is that, in most cases, data doesn't figure into current global roaming plans.

    This isn't strictly a U.S. issue, either. Rollouts of GPRS data networks in western Europe, for instance, have been hindered by substantial incompatibilities between networks and - although western European users are much more reliant on wireless data than U.S. users - data roaming there is proving to still be the stuff of fantasy. Systems simply aren't in place and while analysts speculate that markets could be huge - for example, Katrina Bond, an analyst with Analysys, has predicted 6-million GPRS subscribers in Europe by year-end 2002 - those same analysts aren't optimistic that the intercarrier kinks will be ironed out anytime soon. The result: global wireless data roaming simply is on hold, for now.

    Is it in fact possible to deliver global wireless data? A vivid proof comes from Inmarstat, a UK-based satellite communications company that offers a genuinely global service. "We cover 98% of the globe," says Stephen Rogers, the company's director of marketing communications. "The 2% we don't cover are the North and South Poles."

    Initially founded to serve an ocean-going clientele, Inmarstat - which offers both voice and data services - lately has begun selling into enterprise and it's been put into service everywhere from Afghanistan (where war correspondents use it to connect with home offices in the U.S. and UK) to North Sea oil rigs. Voice pricing is a competitive $2 per minute and data - which can be anything from digitized news footage to faxes to computer documents - is $7 per minute, says Rogers, who points out that while the data price may seem hefty, Inmarstat can actually connect (via its own satellite network) pretty much wherever world travelers go and, importantly, "our transmission rate is 64K, much faster than the 9.6 offered by cell phones, when they can connect," says Rogers. "We launched the world's first global, wireless packet data service and we still are unrivaled."

    One hitch with Inmarstat: users need a proprietary, pricey (about $2500, says Rogers), and bulky (about five pounds) unit that does multiple duty as a voice phone, fax, and data terminal. "This is a B2B product," concedes Rogers and, fact is, at that pricing, only well-heeled companies with a keen need to communicate everywhere will likely loom as significant Inmarstat targets.

    Mass Market Movers
    For most users, Inmarstat plainly is not a viable alternative, but just when the goal of worldwide wireless data seems elusive, Motorola is now entering the scene with its Accompli 009 phone pictured earlier (about $650), a tri-band GSM device that features a speakerphone. But this unit's core function is data. "It was designed as a data device; we added phone functionality later," says Motorola marketing manager Allan Spiro.

    "Tremendous buzz" surrounds this product, according to Spiro, who says Motorola found it for sale on eBay months before it hit the market. "People want it because it truly solves a need," says Spiro, and that need, of course, is for affordable data globally.

    Does the Accompli 009 deliver? Not exactly, at least not yet, Spiro admits. Users will have access to wireless e-mail, WAP browsing, and other data services, but global SMS, for instance, will remain on the not-yet list. When will all data services be available globally? Sooner than you might think, says Spiro. "We believe the networks will be built out soon. Demand is already there, and devices like the Accompli are getting into users' hands." Global wireless data, he adds, is a solvable problem - and "corporate customers definitely want it," he says.

    That's why he and Motorola are optimistic that - in the near-term - a full slate of wireless data services will become available to satisfy the demands of customers who are already lining up.

    Is Motorola right? Nobody knows just yet - but keep a close watch on how the Accompli 009 phone fares in the weeks after its debut, around the beginning of 2002. If demand matches Motorola's high expectations, this will be a big sign that, finally, corporate customers are indeed demanding global access to wireless data.

    And carriers likely won't be long in meeting that demand. "A large concern for us is meeting the demand of our business customers," says Cingular's Hogan - and you can bet that when enough business customers line up for wireless data services, the carriers will line up briskly to make some of their best customers happy.

    About Robert McGarvey
    Robert McGarvey has covered the Web since 1994 for magazines ranging from "Technology Review" to "Upside." He is the author of the best-selling book "How To DotCom" and a contributing writer to various SYS-CON publications, including Wireless Business & Technology and Web Services Journal. He can be reached at mcgarvey@sys-con.com.

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