Wireless Revolution

September 23, 1993

The next telecommunications revolution is just around the corner.

Today, the Federal Communications Commission adopts rules creating three to six new wireless networks in every city and town, expanding the cordless concept created a decade ago by cellular phones to millions of new customers now tethered to copper wires. The all-new digital technology, dubbed personal communications services, or PCS, could have far-reaching consequences, linking cordless phone users at prices half those of present cellular phones.

The new systems employ small, hand-held units similar to

cellular phones but with less powerful radio transmitters. To compensate for the shorter range of these units, wireless companies will install networks of many small antennas throughout their service areas to capture the signals and relay them through central switching computers that direct calls either to another PCS phone or link them with wire-based telephone systems.

A PCS system works on the same principle as digital encoding employed in computers. Each cell can handle six to eight times more calls than its cellular equivalent, allowing the cost to be spread over more customers and thus bringing prices down. The new system will be capable of sending data, faxes and perhaps even video.

Wireless phones also mean more competition for traditional phone companies, which now must look for new ways to keep costs down and learn to aggressively market their strengths to attract new customers. For example PCS systems, like cellular phones, are vulnerable to fading caused by terrain obstacles and are less secure from eavesdropping than land lines.

Initially, at least, the traditional phone companies probably will try to get PCS companies to use their lines for some portions of the telecommunications link; that will allow them to tap into a piece of the potentially lucrative new market.

In the U.S., PCS companies will aim first for business users in metropolitan markets, gradually expanding outward. Eventually wireless networks may replace much of the current wired phone network, especially in developing countries where wire-based systems are antiquated and unreliable. If the trend catches on, the whole world may some day come unwired even as millions of new callers are getting plugged in.

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