PCS Gets Ready to Connect Wireless Communication to Compete with Cellular

By Le Bien, Mark | Daily Herald (Arlington Heights, IL), May 16, 1996 | Go to article overview
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PCS Gets Ready to Connect Wireless Communication to Compete with Cellular

Le Bien, Mark, Daily Herald (Arlington Heights, IL)

Byline: Mark Le Bien Daily Herald Business Writer

Since the mid-1980s, cellular has been the only game in town for people who wanted wireless telephones.

But that's about to change, in the Chicago region and elsewhere, as a cellular-like technology called "personal communications services," or PCS, gets ready for launch.

The question is, will PCS get pounded by its older and still-growing sibling, cellular?

Three companies are betting they can take on cellular in the Chicago market: PrimeCo Personal Communications, AT&T Wireless Services, and DCR Communications. Those are the carriers who bid a total of roughly $1.2 billion for the federal licenses to provide local PCS.

Starting later this year or in 1997, they plan to offer all-digital service over PCS "smart" phones. The phones will allow wireless communications including talking, paging, and sending and receiving facsimiles. Users also will be able to send and receive data over laptop computers.

"We're targeting a higher quality of service," said Joe Woods, vice president and general manager at PrimeCo's regional headquarters in Itasca.

As for rates, the PCS companies aren't saying much at this point. But experts believe PCS will have to be price-competitive with cellular or many people will simply ignore the new service.

Another possibility, local observers say, is a price war between the PCS newcomers and the cellular providers.

Observers say PCS's major selling point is that it's a digital technology. That means it transmits radio signals in numbers rather than the original wave form.

Digital, the PCS carriers say, offers better sound quality, privacy and fraud protection. It's also better for transmitting computer data, they say.

Here in the Chicago region, the PCS companies' goal is to steal away current cellular customers or draw people who've never used wireless phones before. But it won't be easy.

They'll be up against Ameritech and Cellular One, the licensed cellular providers in the local market for more than 10 years. Together, the two companies already have about 1.2 million local subscribers.

They rule over a market that would be tough for any newcomer to crack. Metro Chicago currently has the cheapest rates and highest penetration rate of any cellular market in the country, according to research firm Herschel Schosteck and Associates.

"We feel we're well-positioned and we have a great brand name," said Evan Richards, a vice president at Ameritech's cellular division based in Hoffman Estates.

"Cellular has an immense lead" in the Chicago market and elsewhere, said Bennett Kobb, a wireless industry analyst and publisher of Spectrum Guide, a trade journal.

The service has been around for 13 years, is a known quantity and has more than 30 million subscribers in the country today, he said.

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PCS Gets Ready to Connect Wireless Communication to Compete with Cellular


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