AT&T Wireless/DoCoMo Deal Bodes Well for U.S. Consumers

Behind all the financial hoopla surrounding this telecom announcement, there’s good news for everyday mobile phone users. The technology AT&T has promised to implement will give U.S. mobile phone owners the roaming capabilities that Europeans have enjoyed for years.

While the recent announcement that Japanese telecom giant NTT DoCoMo will acquire 16 percent of AT&T Wireless (AWE, info) attracted widespread attention, a less-noticed part of the same announcement may have greater impact on U.S. mobile phone users. Specifically, the U.S. cellular operator said it planned to add GSM (global system for mobile communications) technology to its nationwide network beginning in early 2001.

GSM is the product of a collaborative effort among European manufacturers, operators, and governments during the 1980s to develop a common digital cellular standard. Its mandated, continent-wide adoption brought several advantages, including manufacturing economies of scale and international roaming capabilities. As a result, GSM has become the most successful cellular technology in history, with nearly 400 million users around the world, including many in Asia.

The United States, by contrast, has suffered from the existence of several incompatible competing digital standards. AT&T Wireless and a couple of other operators use TDMA (time division multiple access). Others such as Verizon use the newer CDMA (code division multiple access) technology. Some U.S. carriers also use GSM.

AT&T’s reliance on TDMA meant its customers could not use their phones outside the United States. And unlike GSM and CDMA, TDMA offered no clear path to upgrade networks to so-called 3G, “third-generation,” technology, which will support high-speed (384Kb per second and up) services such as wireless full-motion video.

Under its newly announced strategy, however, AT&T Wireless in early 2001 will begin overlaying GSM technology, as well as a higher-speed (115Kbps) interim or “2.5G” data technology called GPRS (general packet radio service), on its nationwide network. That will give AT&T Wireless the infrastructure to eventually support W-CDMA (wideband CDMA), the same 3G technology that will be used throughout the GSM world, as well as in Japan by its new partner DoCoMo.

The plan finally puts the U.S. operator on track to offer customers the same global roaming and compatibility European users have enjoyed since the early 1990s. It’ll come with a cost, however. The Yankee Group notes that with the new additions, AT&T Wireless will be committed to supporting no fewer than six separate services, including the analog Advanced Mobile Phone System (AMPS) still used in some areas.

Posted by on December 7, 2000