Peter J. Howe

July 21, 2003

Jul. 21--Cingular Wireless, the second-largest cellular carrier in Greater Boston, is activating a region-wide network this week that will finally allow Cingular to offer advanced services, including digital camera phones, handsets that work in Europe, and much faster wireless data services.

Despite its leading position and its status as one of the first two cellular carriers in Boston in 1984, when it was called Cellular One, Cingular locally has lagged several months behind AT&T Wireless, Sprint PCS, T-Mobile, and Verizon Wireless in offering next-generation phones and services.

This week, Cingular will catch up by officially launching services over a new GSM (global system for mobile) network, which the company said will provide coverage everywhere Cingular now has service in New England. GSM, the dominant wireless protocol in Europe, is used by more than 70 percent of all wireless subscribers globally and supports a wide selection of phones that include cameras, MP3 music players, Internet access, full-color videogames, and other features.

Cingular is about halfway through a three-year project to add GSM service throughout its national service territory, including several rural markets like northern New Hampshire and Vermont where it is jointly building out GSM coverage with AT&T Wireless.

The new network should over time also sharply increase voice calling capacity for Cingular, reducing dropped calls and all-circuits-busy problems. Mark Bees, the New England general manager for Atlanta-based Cingular, said GSM channels can handle 2 1/2 times as many calls as current digital channels and eight times as many as analog.

Because of the huge potential efficiency gains, Cingular is offering big incentives to buy new GSM handsets, typically 50 percent more calling minutes than the same-priced plans using its older TDMA digital network. For example, a $40-a-month plan with 400 minutes on the old network will get 600 minutes on GSM, and a $20 plan with 200 minutes will get 300 minutes on GSM, Bees said.

Analysts said Cingular's move into GSM, even if long overdue, should improve its competitive footing. Outside of a unique "rollover" plan that lets subscribers carry forward unused calling minutes from month to month, Cingular has been hard-pressed to project a clear competitive advantage comparable to Verizon's focus on network reliability, T-Mobile's aggressive pricing, or Nextel Communications' walkie-talkie "DirectConnect" feature.

Adding GSM service "will definitely spruce up their handset line a little bit and give them parity with other carriers in services," said Christopher J. Foster, a wireless industry analyst with Technology Business Research in Hampton, N.H.

Foster said Cingular, which is a 60-40 joint venture of Baby Bell giants SBC Communications and Bell South, "has built a great brand name, but I don't think they've taken it to the tactical level, the next level where they can explain to customers what advantage they have. I think that's their biggest flaw."

Andrew Cole, senior vice president and wireless practice chief with Adventis, a Boston-based consulting firm, agreed that Cingular has suffered from "undifferentiated" services. Cole said it is probably the carrier most vulnerable to losing customers when a new federal policy takes effect Nov. 24 letting wireless subscribers keep their old phone number when switching carriers. New GSM handsets and services could help Cingular reduce net subscriber losses, Cole said.

Cole and Gartner wireless analyst Phil Redman said that, despite offering camera phones almost nine months later than Sprint PCS and AT&T first did in Boston, plenty of opportunity remains for Cingular.

"They're late to the party, but there's still a lot of party left" for wireless photo services, Redman said.

For voice calls, New England Cingular GSM subscribers will also get a no-roaming-charge local calling zone that covers areas from northern New Hampshire to South Carolina, although subscribers could still face 79-cents-a-minute roaming fees along the Eastern Seaboard in areas where Cingular has to use AT&T or T-Mobile networks. The old local zone extends only from southern New Hampshire to Rhode Island and Connecticut.

By late this year, Bees said, Cingular plans to roll out in the Boston market a higher-speed wireless data service called EDGE that can provide Net access at speeds of 70 to 200 kilobits per second, up to five times as fast as a dial-up landline modem and twice to three times as fast as current Cingular GSM data offerings.

Besides camera phones, another advanced model Cingular can now offer in Boston is a Nokia 3300 that includes a built-in MP3 player, FM radio, and a full-alphabet keyboard for writing messages.

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