From the Chicago Tribune

AT&T Wireless offers Web service

Chicago is one of target areas

By Jon Van Tribune staff writer

December 13, 2001

It's a big hit in other countries but a flop in the U.S.

While consumers in Japan and Europe have embraced wireless Internet
services, routinely sending e-mail messages from cell phone to cell
phone, their American counterparts have mostly ignored similar services
offered so far.

Now comes the U.S. cell phone industry's latest effort to sell U.S.
consumers on the potential of the wireless Web: An advanced data network
and new voice service from AT&T Wireless launches Thursday in Chicago
and Kansas City.

It won't be an easy sell. Cost is an issue. And many U.S. consumers have
proven impatient with technical limitations of the service, notably the
tiny, hard-to-read screens on wireless devices, and the relatively slow
speed of Internet wireless connections compared with home dial-up
service.

Indeed, one big reason for the popularity of wireless Web service
overseas is that many of its customers lack dial-up access.

"In America people buy wireless phones because they want to talk on the
fly," said Doug Lamont, a visiting professor of marketing at DePaul
University in Chicago who has written about international acceptance of
the wireless Web.

"The problem is that we've been committed to landlines for so long, we
have them all over the place, and people don't see the rationale for
going wireless to get data," he added.

The new service, which will initially be available only to business
customers, incorporates some substantial technical improvements.

Laptop plug-ins

Laptop computers connected to the new wireless network, for instance,
will be able to perform at the same levels as dial-up home service,
according to James Johnson, AT&T Wireless general manager for Illinois
and Indiana.

In addition, voice service on the new network will work from the same
global system for mobile communications, or GSM, that is standard in
most foreign countries, allowing AT&T customers to use their new phones
when traveling abroad.

Early next year, AT&T plans to start offering phones, wireless modems
and other gadgets using its new network to Chicago-area consumers.

The company will continue to support its existing network, which serves
about 18 million customers with a digital operating system known as
TDMA, by running the two systems simultaneously, said Johnson.

Executive customers targeted

Initially, target customers will include professionals who want to use
laptops to reach corporate Intranets, said Johnson.

If customers embrace the new network, one likely beneficiary is
Schaumburg's Motorola Corp., which is the leading vendor of handsets
that use the new system. Nokia of Finland is AT&T's top handset vendor
for its existing TDMA system.

AT&T isn't alone in migrating to GSM. Last month Cingular Wireless, a
joint venture between Bell South and SBC Communications, said it will
also build a GSM network that will eventually displace its nationwide
system.

Besides enabling customers to use their own phones when traveling
abroad, converting to GSM gives a carrier a better selection of
infrastructure vendors and lower costs, because so much of the world
uses GSM, said Clay Owen, a Cingular spokesman.

"It's a worldwide standard," he said.

Jeff Kohler, founder of Reason Inc., a wireless management company, said
that corporations are eager to give employees access to technology that
increases productivity.

"They should find some customers in the enterprise market," he said.
"But I doubt that this will do much to attract more consumers."

Indeed, demand may well be light. A survey conducted earlier this year
of 3,189 residents of the United States, Britain, Germany, Finland and
Japan found big differences in wireless Internet use.

The survey found that 72 percent of Japanese cell-phone owners were
using their devices to connect to the Internet, compared with just 6
percent in the United States. Overall, only 15 percent of consumers in
the countries surveyed who owned a cell phone or other portable device
were using it to connect to the Internet, according to consulting firm
Accenture.

As Ken Hyers, a wireless analyst with the Cahners In-Stat Group put it:
"You won't see soccer moms using this any time soon."

Speed still an issue

While the new networks are intended to deliver data significantly faster
than existing ones, they may disappoint, warned Andrew Cole, a
consultant with Adventis, a Boston-based consultancy. "Our clients in
Europe find that these networks aren't all that fast," said Cole.

And while AT&T's new offering will likely win new customers among
white-collar business users, Cole said, a competing product offered by
Nextel Communications has already locked up the blue-collar wireless
market that serves construction and other industries.


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