Mobile Telephone Service—Technologies

The first generation of cellular services introduced in the 1980s was analog. These were later upgraded to digital. The most important advantage of digital cellular is its improvement in capacity. Second generation digital cellular used in existing digital networks supports three to ten times the capacity of analog cellular.

Advanced Mobile Phone Services (AMPS)

Advanced mobile phone service (AMPS) is the analog cellular telephone service provided in the United States. (All two-way wireless handsets are in reality radios with transmitters and receivers. Radios transmit energy into the air.) Cellular service increased capacity of mobile technology because it reuses frequencies in hexagonal-shaped cells, as depicted in Figure 9.1. With analog cellular service, each cell carries up to 57 conversations. If carriers need more capacity, they split cells into smaller sizes and reuse frequencies in the newly created cells. More cells equal more capacity.

The concept of cellular telephone service originated in 1947 at AT&T's Bell Laboratories (now part of Lucent Technology) with trials conducted in Chicago and Baltimore in late 1983. The FCC set aside radio spectrum for cellular service at 825 to 890 MHz and decided that each of the 306 Metropolitan Statistical Areas and 428 Rural Service Areas were to have two cellular service providers. The local wireline telephone company was assigned the B block of frequencies and a non-telephone company was assigned the A block. The FCC hoped to foster competition by having two providers in each area.

Other than the 30 largest metropolitan areas, cellular frequencies in the A block were given out by an FCC lottery to qualified vendors. Initially, cellular service was purchased for salespeople and business executives who justified the high cost of telephone calls by their ability to use their time more effectively. The cost of each call was roughly equivalent to the cost for an operator-assisted call. Telephone bills for corporate users such as salespeople were typically $200 per month. Although usage fees remained high, handset costs dropped. Telephones were often provided at no cost or at a minimal fee to attract new customers.

Digital-Advanced Mobile Phone Service—D-AMPS

Cellular providers such as Verizon Wireless and Cingular Wireless offer digital cellular service over the same frequencies as their analog cellular services. Depending on the digital technology, digital cellular has three to ten times more capacity than analog service. Cellular carriers set aside channels for digital service, which use either time division multiple access or code division multiple access. (A more detailed explanation of these access schemes is provided later.) Carriers designate a portion of their total channels to transport calls in digital format.

Initially, carriers added capacity by breaking cells up into smaller sizes. However, adding small cells has its problems. Smaller cells lead to more dropped calls and dead areas where calls cannot be made because of problems of overlapping into adjacent cells.

In addition to capacity, carriers hoped for extra revenue from enhanced features such as messaging on handsets. They also wanted to stay competitive with PCS service. D-AMPS supports the same features as PCS: caller ID, alphanumeric paging, voice mail notification, short messaging, a longer battery life and services such as call return.

Privacy also is improved on all forms of digital cellular service. Snoopers with scanners easily listen in on analog cellular signals. Eavesdropping on digital transmissions is more difficult because the digital bits are scrambled when they are multiplexed using time division multiple access (TDMA) and code division multiple access (CDMA) schemes. Sophisticated scanners can be used to listen in on calls carried on digital service; however, the scanners are more expensive and less readily available than analog scanners. Many vendors of digital scanners claim they only sell them to law enforcement agencies.

Digital signal processors in handsets decode the digital bits representing caller ID numbers and paging messages into alphanumeric characters displayed on handsets' liquid crystal displays. Digital signal processors (DSPs) are specialized, very high-speed computer chips. See Chapter 5 for an explanation of digital signal processors. The DSPs also code and decode the voice signals, converting them from analog to digital at the sending end and from digital to analog at the receiving end. Most digital cellular handsets are dual or tri-mode mode. Tri-mode cellular phones operate in for example, PCS, TDMA and analog cellular markets. When callers are in analog areas, they lose caller ID and other advanced features associated with digital cellular.

GSM Service

GSM is the digital cellular standard that was originally decided on by European governments and was first deployed in 1990. According to market research firm, Gartner Consulting, as of April 2001, 62% of cellular service was based on GSM. The reason for its popularity is its worldwide compatibility. GSM service offers the same functionality as PCS and D-AMPS networks. It operates in four ranges of frequencies listed in Table 9.1. It uses a time division multiple access scheme similar to that used in the United States by Cingular Wireless.

GSM phones have Subscriber Identity Module (SIM) cards that clip on them for storing user identity. Most GSM phones are either dual or triple bands and are capable of operating on various GSM frequencies. Alternatively, the SIM card can be used when people roam on different networks.

PCS—Personal Communications Services

Personal communications services (PCS) were conceived as a way to provide a low-cost, feature-rich wireless telephone service. Pricing was to be low enough for the service to be affordable to a wide segment of the population. The handsets incorporate two-way paging, short messaging service on the liquid crystal display and voice messaging. PCS services operate on a different portion of the airwaves (the 1.8 to 1.9 Gigahertz frequencies) than the earlier analog and digital cellular services (AMPS and D-AMPS). The major difference between D-AMPS and PCS is that because of the higher frequencies, PCS networks have a larger number of and smaller antennas. Because of the shorter wavelengths associated with these high frequencies, antennas need to be spaced closer together.

In 1993, the FCC announced plans to auction off portions of the 1.8 to 1.9 Gigahertz personal communications services spectrum. Six chunks of spectrum for PCS service were defined as A, B, C, D, E and F blocks. The A and B blocks were for the 50 MTAs (Major Trading Areas), which are regions that include multiple cities or states. C through F channels were in each of the 450 Basic Trading Areas (BTAs), which include only one metropolitan area. Blocks A, B and C have 30 MHz of spectrum and blocks C, D and E have 10 MHz each. The rules forbade incumbent cellular providers from bidding on frequencies within their own regions. They were not allowed to bid in areas where there was a 20% or more overlap with the PCS area in their existing cellular coverage.

The federal government's goals in promoting new use of the airways were to encourage competition and raise money for the U.S. Treasury. By dividing up the country into six groups of frequencies, each area could have six PCS competitors plus the two existing cellular providers. Competition from PCS services has driven prices down for all cellular service and encouraged growth in new wireless services. (See Table 9.2.)

Table 9.2. The Largest Cellular Providers in the United States

Cellular Provider	Number of Customers as of 2001[*]	Comments
Verizon Wireless	28 million customers	Vodafone, largest wireless company worldwide, owns 45%. Verizon Wireless was formed by the combination of Vodafone AirTouch, GTE and Bell Atlantic Wireless assets. It includes PrimeCo, which serves the Southeast and was owned by AirTouch and Verizon.
Cingular Wireless	20 million customers	A joint venture of BellSouth and SBC's (CellularOne) cellular assets.
AT&T Wireless	15 million customers	IPO completed July 2001. NTT DoCoMo, the largest wireless company in Japan, owns 16%. AT&T Wireless owns controlling interest in Rogers Wireless of Canada.
Sprint PCS	11 million customers	Service covers 50 states plus Puerto Rico and Virgin Islands.

^[*] Information on number of customers from company-provided information.

Specialized Mobile Frequencies for Voice—Nextel

Nextel was founded in 1987 and initially offered data communications over analog radio facilities. Nextel's newer wireless telephone service is carried over digital facilities in its 800 to 900 MHz spectrum. The service is used with Motorola telephones and is geared toward small and medium-sized businesses. In early 1999, Nextel upgraded its network to support browser-equipped Motorola telephones. It targets commercial, not residential, customers. Motorola Corporation and the McCaw family each own 20% of Nextel. (The McCaw cellular company was purchased by AT&T in 1993.)

Nextel phones have a liquid crystal display that can be used for text and numeric paging. Nextel coverage is in 185 of the top 200 markets and within reach of 77% of the U.S. These areas are largely metropolitan locations. Vast areas of sparsely populated sections of the country will not be covered. Nextel is accessible from major interstate highways. However, it will not have towers or service in remote locations with few businesses such as North Dakota and Montana.

In addition, Nextel offers Nextel Direct Connect. This service enables employees in the same company to have direct connections to each other by pushing a button on their telephone.

Because Nextel service does not work on the 1800 to 1900 megahertz frequencies, it did not have to participate in costly bidding for new frequencies. However, it has a limited amount of spectrum. Nextel offers the same features as PCS service such as short messaging text paging, email and voice mail. These phones use a technology, iDEN (integrated Digital Enhanced Network) developed by Motorola that breaks each 25 kilohertz channel into up to six time slots able to carry voice, paging traffic, data and dispatch messages. It compresses the voice small enough so that it can fit into one of the six time slots.

High-end Nextel phones have email capability embedded in them that works with Microsoft Outlook and Lotus as well as email provided by Internet service providers. The Nextel email server converts these email formats to that compatible with Nextel. Subscribers access their email by pressing the email button on their telephone and entering their password. A cookie in the phone sends the user name and email account information. The phone can be set up to receive all or some email messages. This functionality doesn't work when roaming. A cable is available to connect the phone to a laptop computer so that email can be stored on a computer.

Nextel offers a dual band, GSM and 900-megahertz TDMA Motorola telephone that operates in over 60 countries with which it has roaming agreements. Nextel sells service directly and through Nextel Partners, an affiliate who sells in small to medium-sized markets in 30 states within the United States. Its single mode phone operates in parts of Canada, Latin America and the Philippines where Nextel International operates networks in the same frequency and access methods as those in the United States. Nextel's lower frequency network requires fewer towers because lower frequency, longer wavelength signals travel farther without deteriorating than PCS signals at higher (1900 megahertz) frequencies.