New Cell Phone Travels Well
The first of a new breed of cellular phones designed to appeal to people who frequently travel abroad was unveiled this month in New York.
Until now, U.S. travelers had to rent or buy a cell phone to use overseas because wireless systems in other countries use a global system for mobile communications, or GSM, frequency that differs from the one used by GSM carriers in the U.S.
“Everyone wants to take their phone with them, because once you learn how to use it, you don’t want to change phones,” said David McCartney, vice president of marketing and sales for Bosch Telecom’s cellular business unit in Dallas. “This is the only phone that can roam in 110 countries.”
Bosch’s World 718 is the first handset to accommodate both GSM frequencies. Other companies are expected to come out with similar phones. But the initial market for the phone, which is expected to sell for about $299, is likely to be fairly small. Bosch hopes to sell about 200,000 phones in the U.S. this year, or about 10% of the more than 2 million GSM phones expected to be sold in America in 1998. Service fees will vary.
And the phone could face competition for the same users when satellite phones, such as the Iridium, hit the market starting this fall. But these phones are expected to cost much more.
“The issue is whether the demand is there for it,” said Phillip Redman, a program manager in the wireless group at the Boston-based market research firm Yankee Group. “These phones are going to cost more than your average GSM phone, and they’re not going to be used by the average user.”
Experts say GSM carriers in the U.S. will be able to use the phone to differentiate their service from other wireless competitors in the race to appeal to more customers.
Phone manufacturers have to contend with a mishmash of wireless standards in different nations when designing their handsets. In the United States, for example, in addition to GSM, there are several other systems, including CDMA (code division multiple access) and TDMA (time division multiple access). These digital systems compete with the analog wireless systems.
In Southern California, Sprint PCS and AirTouch Communications use CDMA technology, L.A. Cellular relies on TDMA, and Pacific Bell Mobile Services uses GSM. European countries built their wireless networks using GSM alone and don’t accommodate phones that operate on analog frequencies. GSM has more subscribers worldwide than any other wireless technology.
The GSM Alliance, a worldwide trade group for GSM providers, is working to cement roaming deals with wireless companies in numerous countries so consumers can use the Bosch phone. These agreements, which have been finalized in about 80 nations, are necessary so carriers can bill each other for calls made on their networks.
So far, Bosch has sold the phone to one U.S. carrier, Omnipoint, which will provide service throughout the northeastern U.S. Audiovox Communications will distribute the phone as Bosch signs on additional carriers.
PacBell is testing the phone but has not made a decision about whether or not it will buy it.
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Unlike its CDMA and TDMA competitors, the Bosch phone can’t switch between a digital and analog frequency in the U.S. This is a crucial issue, since most digital networks in the U.S. won’t be completed for several years, said Herschel Shosteck, president and CEO of Herschel Shosteck Associates, a cellular market research firm in Wheaton, Md.
“None of the PCS networks with CDMA, TDMA or GSM deliver the quality of the analog network,” Shosteck said. “It takes time to build up a network to a density that can give you uniformly high-quality service.”
Although CDMA networks don’t have the breadth that GSM does, CDMA proponents argue that their technology will power cellular networks in some of the world’s fastest-growing nations, including China, South Korea, Brazil and Mexico, as well as Japan.
GSM systems are up in most of Europe and in countries from Albania to Botswana to Chile, Hong Kong, Monaco and Turkey.
CDMA supporters are also hoping their technology will be used as a standard for other wireless services, such as the “wireless local loop” that would provide wireless local phone service and high-speed Internet access services for laptop computers.
Europeans have also proposed using a new technology similar to CDMA for the Continent’s next-generation cellular network, said Perry LaForge, executive director of the Costa Mesa-based CDMA Development Group. The International Telecommunications Union will review proposals for this new system this summer, LaForge said.
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MCI Complaint: The San Diego-based Utility Consumers’ Action Network has filed a complaint with the California Public Utilities Commission alleging that MCI overcharged hundreds of California consumers who use its local service.
The complaint alleges that MCI failed to notify about 17,000 customers of a rate increase for local calls. The carrier increased its rates for local calls from 4 cents a minute to 10 cents a minute during peak calling periods without informing consumers, said Charles Carbone, consumer advocate for UCAN.
UCAN’s complaint also says MCI switched several consumers to its long-distance service without their permission--or “slammed” them--and billed them for two minutes on calls of one minute or less.
MCI says it has reimbursed consumers who were overcharged for service. The company is also crediting consumers who were billed for rate increases without notification and has since notified its local customers of the increase, said Brad Burns, an MCI spokesman.
The company is still investigating several instances of slamming and has concluded that several cases didn’t occur, Burns said.
MCI is no longer selling local service in California.
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Times staff writer Jennifer Oldham can be reached via e-mail at jennifer.oldham@latimes.com.
