Pactel to Launch New Cellular Phone System : Technology: The mobile phone company will spend $250 million to develop a digital network in L.A and other markets.
Pactel Cellular is about to complicate matters for mobile phone users by announcing plans to launch a new technology.
The company, which competes neck-and-neck with McCaw Communications’ L.A. Cellular in the Los Angeles area, said Wednesday that it plans to spend $250 million over the next five years to build a digital cellular telephone network in Los Angeles, San Diego, Sacramento and Atlanta. The first commercial system, using Motorola equipment initially valued at $70 million, will be launched throughout Los Angeles early next year, the company said.
The system will compete with a rival, incompatible digital service introduced in November by L.A. Cellular in tony sections of the region, including Beverly Hills and Century City. L.A. Cellular plans to expand that network, but it has not yet disclosed a schedule.
In theory, digital portable phone service, which converts sound into the same kinds of electronic data bits used in computers, would improve on the current analog systems by increasing calling capacity and improving voice quality. Both Pactel and L.A. Cellular now provide analog systems.
For customers, the introduction of digital systems further muddies things in a market already brimming with confusing advertising and pricing plans.
As the new networks roll out, mobile callers will be forced to make choices. First they’ll have to decide whether to stick with their old analog phones or spring for the digital variety, which cost twice as much--between $600 and $1,000. And, if they make the leap to digital, they will have to draw straws between conflicting technologies. Some observers liken the choice to the old Beta-versus-VHS rift that plagued the videocassette recorder industry until VHS won out.
“The customer ultimately will have to decide,” said Susan Rosenberg, a spokeswoman for Pactel Cellular, based in Walnut Creek, east of San Francisco. “We believe (our digital technology) is better and worth the wait.”
Not everyone agrees. Years ago, when analog cellular systems were the only option, digital service held the promise of increased capacity and greater sound quality. Now, however, analog has improved so much that digital’s advantages are not as obvious, said Herschel Shosteck, a cellular analyst in Silver Spring, Md.
“What has happened over time is that the capacity of analog has expanded to the point that digital brings little advantage over the short term,” he said.
There is also the likelihood that the two digital technologies will interfere with each other initially, causing precisely the kinds of problems that digital is meant to solve.
“Everybody is so obsessed with rushing the technology to market that the interference issues (won’t) have been resolved,” Shosteck said. “Pushing it prematurely is like trying to make a major-league hero out of an 11-year-old sandlot player.”
Shosteck predicted that, based on past delays in bringing digital services on line, a realistic launch date for Pactel’s system is mid-1996.
